COMMENT: The historical connotations of London’s varied property markets have always been thoroughly hammered into our consciousness. Law firms’ rightful place is Mayfair, finance belongs in the City and, more recently, tech companies’ domain is Shoreditch.
Today, however, a combination of occupier activity, infrastructure development and opportunity-driven developers is starting to dissipate these historical perceptions. We are moving towards a London where it is the building and its surroundings that matter more than the postcode. It is now the prerogative of today’s landlords not only to embrace this change but to drive it forward.
A clear example of market evolution can be found in Canary Wharf. To date, Canary Wharf has been the focus of one sector only: finance. But more recent developments such as Wood Wharf are looking to turn the area into a 24/7 neighbourhood, including residential and more retail, while it will get a further injection of infrastructure with Crossrail.
As a result, the landlord sees an opportunity to encourage other sectors to consider Canary Wharf as an office location, notably tech. Shared office providers such as The Office Group are moving in, sowing the seeds of change.
The new prime
A raft of occupier moves across London is helping to pivot many other markets towards diversifying. Take the Premier League’s decision to move to Derwent’s Brunel Building in Paddington, W2, or Apple’s move to 22 Bishopsgate, EC2, while it waits for its new UK headquarters at Battersea Power Station to be completed. These aren’t moves that stick to historical norms.
Investors can now find opportunities not only in prime markets, but in sub-markets across London that may not have been previously considered prime. Often people think opportunity comes from being opportunistic, going up the risk curve. But it can simply take identifying an anomaly, a building in a location where returns are only being held back by historical perceptions.
Take Paddington, which has historically achieved lower rents than King’s Cross despite excellent connections and amenities. Now there is an opportunity to capitalise on improving infrastructure, to invest in a property that delivers the experience occupiers are seeking as historical connotations lose their significance.
Opportunity can come from identifying an anomaly, a building in a location where returns are only being held back by historical perceptions
To fully realise the opportunities that this market evolution offers, landlords need to alter their own perspectives. There is an opportunity for developers in a unified way to not only create great buildings, but to create amazing places. We need to be less insular, defended behind our own lines and focusing only on the nature and performance of our own buildings. Landlords need to look outside the front doors of their properties and collaborate cross-sector with other landlords, developers and tenants in the area to create 24/7 neighbourhoods that provide a unique experience.
Design is the decider
CC Land is in the process of establishing a partnership of landlords around The Leadenhall Building (pictured) in the City to lead to the creation of a business improvement district. Currently known as the “Eastern City Cluster”, the partnership will bring stakeholders together to create a 24/7 neighbourhood of retail and leisure surrounding the already established financial centre over the next two years before voting on whether to establish a BID.
By working together, landlords can create a destination that continues to attract global markets.
This approach can be replicated across London’s markets and submarkets to create places that are full of life no matter the time of day. Through landlords’ endeavours and a balancing out of markets in terms of historical perceptions, the quality of buildings and the occupier experience of a place will be elevated.
Financial companies will increasingly consider Soho, a media or tech company might look at Canary Wharf. The decider will be the incredible buildings that we can create.
Adam Goldin is head of UK, CC Land
