In the movies, you ride into the west, not the east a trend that’s been matched by the way the City has expanded over the past 20 years. Areas such as Clerkenwell have become established upmarket residential locations, while Holborn has attracted occupiers such as Goldman Sachs and Sainsbury’s, with quoted rents at £35 per sq ft.
But go east from Liverpool Street to Whitechapel, for example, and office space lets at £25 per sq ft.
Two factors that could change this are the start of the Crossrail project and London winning the 2012 Olympic bid and the regeneration plans that go with them. Until then, however, the area between the City and Docklands could continue to be either overlooked by developers or see projects challenged by determined local opposition.
Spitalfields, for example, has become more attractive to developers since the redevelopment of Bishopsgate. But opposition from campaigners fearing that Spitalfields market will be damaged have blocked Hammerson’s Spitalfields Development Group and the Corporation of London plans. The battle over Sir Norman Foster’s 800,000 sq ft office and retail scheme called Bishop’s Square has been waged since 1997.
Ballymore’s redevelopment on the other side of the market has also come under fire from residents. Peter Rees, chief planning officer with the Corporation of London, says several heritage and social issues stand in the way of development.
Asked why the City has neglected the east, one agent replies: “Going east still has the connotation of heading into the East End not a desirable area.” The agent adds that psychologically, “people tend to go west for their social life, and it’s where a lot of people that work in the City commute from”.
Plans for developments at Smithfield have also faced local opposition. Rees exudes exasperation when the subject is mentioned, quipping that the saga “makes the Lord of the Rings look like a short story”. The latest twist came when the SAVE campaign published a report exposing decaying railway tunnels in the area, further fuelling local concerns.
Rees explains that some of the opposition to City fringe development has come from professionals who have moved into the area. “Gentrification has occurred in Spitalfields. A lot of the people that live there are architects, and are now very critical. You almost get the not-in-my-backyard attitude.”
A completely different situation has emerged around Brick Lane to that in Spitalfields and Smithfield. There are opportunities, but few of them have attracted developers. “It’s just not where people want to go,” says the agent. “It’s passed the boundary line for many people. Maybe if the market really picked up it could be an area that will be looked at.”
Developers also have a problem finding suitable sites in the East End. “From the City’s point of view, we are happy to expand east and north-east,” says the agent. “What’s critical is finding and assembling sites. And there are different political issues to be addressed.”
Officials at Tower Hamlets council, which oversees Spitalfields, Smithfield and Brick Lane, claim finding good sites is not a problem. A council spokesman says: “Around 40% of development in London is happening in the borough.” The bulk of this development is, however, away from the City fringes.
Mere West End snobbery cannot explain the lack of development east of the City. Two major stumbling blocks are opposition to change and the financial risk of developing on the fringes, particularly given the prevailing economic picture. “If you build on the fringe you are pioneering, and people don’t want to be pioneering, not yet anyway,” says the agent.
