Aaron Higgins
Aaron is the Director of Boden Property, working with clients and candidates in Project Management, Development Management, Quantity Surveying and white collar site staff.
The end of 2021 saw new highs for city centre development.
In stark contrast from the mass exodus of the beginning of the pandemic, people seem to have fallen back in love with the city, with renting at a 3 year high and record numbers of purchases in London alone.
There are, of course, still challenges to be overcome over the next 12 months:
For the developer – planning regulations, development risk in the current economic market, and the growing implications of sustainable design
For the occupier – needing to make strategic decisions about the shape of their future workforce and workplace based on evolving demands
For the investor – in a highly competitive and nuanced market.
But the outlook for London is bright, driven by a number of factors including:
- The opening of the new Elizabeth Line
- Battersea Power Station Development
- The complete removal of restrictions in the city
the rise of walkable communities
Almost exactly a year ago, we wrote about the way Covid had accelerated certain trends in urban space development and our expectation for urban development over the coming year.
We predicted to see a rise in sustainable communities that embraced mixed use space, walkability and flexible living and working, giving Battersea Power Station and Kings Cross as examples of best practice in reimagining city centre spaces.
In the intervening time, we’ve seen similar projects in Southbank Place, White City, Southwark and Camden. All are examples of ‘walkable neighbourhoods generating huge commercial and social value. Between 60-80 thousand jobs have been created in Southwark and Camden since their development.
These flexible urban developments provide people with exciting and sustainable places to live work and socialise. And that’s what city dwellers are calling for – spaces that are dynamic, socially inclusive, and environmentally conscious.
Housing in London - The Numbers:
As people have rediscovered their love for the city post-covid, the demand for housing has rocketed. In fact developers need to build 52,000 homes in each year to meet London’s housing demand.
But in 2021, only 37k were built. There has been a 21% fall in permissions, 51% fall in start volumes and 17% fall in residential applications.
It’s a similar picture in corporate space. 14.5 million sq ft of new or refurbished office space is set to be delivered in the next 5 years, but with the long term average take-up of this office stock at around 5.2 million sq ft per year, there is a potential short fall of 6 million sq ft by 2025
So the question now is:
How can this stock be accelerated in a sustainable way, to meet the changing nature of demand in a post pandemic working world?
walkable communities
Well, these walkable communities may provide the answer. The most in demand places in the city aren’t segregated commercial or social districts, but instead provide that dynamic mix of living, working and leisure.
There is a growing importance of amenity, community, and walkability both for residential and office occupiers. The rise in demand for mixed use, mixed income, walkable places offer a solution to the need for more homes and more flexible office space. These mixed use spaces make better use of land and have a positive impact on capital values and long-term social value.
They have a positive environmental impact too, with people living, working and socialising all within walking distance, reducing dependence on cars for every day activities. Flexible space is more sustainable too, reducing voids and empty properties as space can be changed and flexed around need – whether it’s offices, commercial business space, co-working space or leisure and amenities.
How and where?
Battersea Power Station, Elephant Park and Canary Wharf are all examples of developments that evolved their vision beyond original planning to create mixed use walkable communities.
Earls Court, Euston Station, Southbank, Canada Water are all future developments that will become new hubs for London.
Mixed use is in demand because:
- Consumer demographics – we want to live and work in versatile locations
- Flexibility – on delivery, planning and timing
- Viability and planning – there is a drive for affordable housing
What does good look like?
Some examples of areas that are showing how mixed use is positively impacting both residential and corporate include Nine Elms, White City, Stratford.
The cohesive mix of lifestyle, living, education and workspace is enabling some of the world’s largest companies to attract and retain the best talent on the market whilst remaining connected to London. Demand has driven rental growth and created a ripple effect for buildings in the immediate vicinity.
New opportunities will come in areas that create a balanced, resilient and sustainable mix of real estate – watch this space for Peckham, Lewisham and Royal Docks, which we’re sure to be writing about in another year’s time!
