“Violent crime rises,” screams a headline on the Camden New Journal website. Next to it is a glorious full-colour advertisement proclaiming Economical King’s Cross offices — click here. The juxtaposition could not be more apt, for it is exactly the conflict that Camden’s property professionals are now trying to address.
To the south of the borough, Midtown has become an established part of the central London office market. To the south-east, the go-ahead for Argent’s £2bn King’s Cross Central regeneration project has encouraged further projects, such Parabola Land’s 1.5-acre King’s Place redevelopment.
So the centre of the borough, less than a mile from King’s Cross, should be in a prime spot for further development. But will the King’s Cross effect spread that far?
Camden’s residents are in no doubt. Ask them what the effect King’s Cross developments have had on the area and local property prices and the answer, summed up by one local agent, is: “Nothing, unless you count all the tramps and junkies who have moved here. And crime has gone through the roof.”
An overreaction perhaps, but Camden council does top the local authority table for the issue of anti-social behaviour orders, with 203 imposed since April 1999. The number dwarfs neighbouring Islington’s meagre 29.
The area’s reputation is reflected in office rents. Rents for new space around King’s Cross is £32.50 per sq ft. Stephen Peers, partner at Drivers Jonas, says they could rise to £35 per sq ft over the next 12 months, and break the £40 per sq ft mark by 2008.
By comparison, the increase in rents in Camden Town from the current £27 per sq ft will be distinctly less meteoric. “King’s Cross will affect the boundaries, but how far that spreads is questionable,” says Peers. “Along York Way, N1, you might see an effect, but Camden High Street is not going to feel the benefits. Camden might get to £30 per sq ft, but it won’t get to £35 per sq ft. It’s a jump that just won’t be made in the heart of the borough.”
Developers echo that sentiment. Land Securities looked at building in the area around six years ago as part of early discussions about the redevelopment of the King’s Cross site. It stepped away, however, saying it was a “long-haul” project.
Glynne Anthony, head of LandSec’s Landflex & London Occupier Services, explains: “The real challenge is the sheer scale of deterioration and poor-quality accommodation that exists in the first place. Even if you believed in the potential, it is a good 20 years off. We felt the best returns would not necessarily go to the initial developers, and there would be further opportunities to get involved in if we wanted to.”
Improvements also require occupiers to invest in the area. Shiny images of proposals and high levels of infrastructure funding have helped improve perceptions of King’s Cross. By contrast, Camden is a great place to have your palm read or hunt down a cult film, but a corporate image is distinctly lacking.
“King’s Cross is getting that blue-chip provision,” says Drivers Jonas’ Peers. “Carluccio’s and Starbucks might be boring and bog standard, but it’s what people want.”
To conjure up such images of Camden is a struggle. “For office workers, it’s not a classic working environment,” he adds. “For a sector of the population, Camden is a great place to go out, but when you’ve got staff who are say 55, it is not.”
For now, development in the centre of the borough seems some way off.
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Retail-led regeneration is all the rage, so could Camden cash in? Retailers seem to like the bustling area, and rarely vacate units. It is one of the reasons that Paul Faulkner at King Sturge remains unconvinced that the area will be overhauled. “It’s a completely different market,” he says. “People go for the experience and to see the niche retailers. I can’t see it changing.” The borough’s high residential quota could also make site assembly a headache. And shops on the high street earn solid returns for landlords, with zone A rents at £180-£190 per sq ft — substantially more than neighbouring Islington’s £85 per sq ft. Units that do make it onto the market are snapped up quickly, says Faulkner. He points to one of his clients, a major high-street chain, which has been looking for a unit on Camden High Street for more than three years. “Nobody wants to sell,” he says. “I’ve canvassed on more than one occasion and offered reasonably sized premiums, but I couldn’t tempt anyone.” |
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Market at a glance |
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Retail rents: average £160 per sq ft zone A. No rise on 2005’s level |
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Office rents: £27-27.50 per sq ft. They are forecast to reach £30 per sq ft over the next two years |
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Warehouse space up to 10,000 sq ft: £11 per sq ft |
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Source: Drivers Jonas |
