The Victoria, Grove Street, SE8, is a typical London boozer. Three huge storeys, with wedding-cake plasterwork on the façade, The Victoria was solid enough to withstand two world wars and the deadly redevelopments of the past 60 years. Internally and externally, it has seen it all.
Now it is about to see something quite new. The Victoria will soon enjoy a few happy years as a 4,000 sq ft super-funky business incubator before reverting – sometime around 2021 – to being a local Deptford pub.
The Victoria’s rise, fall and rise again
is symptomatic of the first wave of a mighty demographic and economic change about to embrace Deptford. Yet this may not be gentrification as we
have seen it before. Check the #deptfordnotdalston hashtag on Twitter to see how locals are anxious not to go the way of the East End. And their anxiety is shared by developers.
According to Lend Lease, which is behind the 11.5-acre Timberyard development that includes The Victoria, replicating the hipster-led regeneration seen in areas such as Shoreditch is as far from their mind as – well, facial hair. In their vision, the locals are not quaint people to be bought out or moved on, but the fuel for successful regeneration.
Lend Lease head of residential Richard Cook says: “This is not about dropping a residential development into an area, something alien. This is not a Shoreditch or a Nine Elms; this will be about relating to Deptford’s identity.
“The key for us is how it links to the local community, how the scheme joins with developments at Surrey Quays, and it is about building on the local community that is already there.”
The Victoria is a case in point, he says. “First it will be an incubator, to grow local businesses ready to move into bigger floorspace, then it will be converted back into a pub in, say, three to five years’ time.”
The £300m Timberyard scheme will see 1,132 homes and about 100,000 sq ft of commercial floorspace.
It may be a sign of the times – perhaps also a sign of grassroots reaction to Shoreditch-style bourgeois regeneration – that Workspace seems to see things in much the same way.
Workspace (via an arrangement with London & Quadrant) is behind plans for 150 homes and a 36,000 sq ft business centre called The Faircharm. It will do for SE8 what its 300,000 sq ft Bermondsey Biscuit Factory does in SE16, says director Angus Boag, and replaces 100,000 sq ft of light industrial floorspace.
“We expect a different type of occupier,” says Boag. “We have a community of artists next door and we have been talking to them during the design. The important thing is, this area already has a community of small businesses. We expect to see this fill up with tenants in 12 months – if we have done our pricing correctly.”
The workspace is due to open in 2017.
The Lend Lease and Workspace schemes are down-payments on potentially much larger commercial offerings.
According to Piers Nickalls, Savills’ director for Greater London offices, large residential-led developments such as Lend Lease’s and Hutchison Whampoa’s 40-acre plans for 3,500 homes at Convoys Wharf will soon spawn sizeable commercial floorspace. The area’s appeal will be reinforced by developments like British Land’s 46-acre Surrey Quays shopping centre redevelopment. Masterplanning is now in progress and British Land says a planning application is expected in 2017.
“Deptford just isn’t on office agents’ radars,” says Nickalls. “But the sheer scale of the resi-led developments suggests there will be an office market, one synonymous with Deptford’s creative industries, its young workforce, and co-working.”
A Deptford vibe will be created – or amplified. “We are looking at modern affordable floorspace in a location with good connections – although perhaps not good enough for a FTSE 100-type occupier,” he adds. “Probably we are talking businesses in fast-growing sectors with fewer than 10 employees.”
This all sounds very inspiring. But the problem for landlords and developers is how to price floorspace in a new market. The consensus is that rent cannot go much above £30 per sq ft – and will probably start much lower (see box above).
There is also the question of amenities for workers: time the office space badly and funky tech entrepreneurs will be skateboarding through construction sites and retail wastelands. Not alluring.
Vincent Cheung, partner at Union Street Partners, estimates a Deptford development pipeline of around 325,000 sq ft of offices, including 167,000 sq ft from Hutchinson Whampoa’s Convoys Wharf. Subtract the Convoys figure – despite signing a section 106 agreement earlier this year, there is no word yet on the construction timetable – and there is a modest 158,000 sq ft on the way.
“That’s about fair, given that deals today are sporadic, and the area has never had a volume of office space,” says Cheung. “But we have still some way to go on amenities for office occupiers. We are pushing it with investors and developers. The issue is now being noticed.”
U+I’s Deptford Market Yard is among the first into the area. Along with 132 new homes, there is 17,000 sq ft of mainly retail floorspace in 23 units, including a restaurant onto Deptford high street. It is 90% let, says project director Arlene van Bosch, at rents peaking at £20 per sq ft.
“We developed with the office market in mind,” she says. “We have the flexibility to make some units into office space, and we’re working with the council on shared workspace.”
Like other developers, U+I is adopting a not-copying-Shoreditch strategy. It insisted on taking letting inquiries only from people who read the hoardings at the site – a solid way to keep the input local. “All the tenants have local links and some history with the site,” says van Bosch. “Because Deptford has few chain stores, it is all locals and independents, and we want to keep that identity.”
At what price?
How do you price new Deptford offices? Today a rent of £23-24 per sq ft would be considered top whack – with most occupiers paying £15 per sq ft at most.
Savills’ Piers Nickalls says new developments will focus on making a big differential with Borough and SE1.
“Deptford has to compete with Waterloo and London Bridge, today both at £50-£60 per sq ft. Ideally, Deptford would be about half,” he says.
Workspace’s Angus Boag hopes they will quote mid-£20s per sq ft. “We will compare with Bermondsey, which is low £30s per sq ft – so we’re looking at a 15-20% discount,” he says.
Lend Lease’s Richard Cook says of its Victoria pub conversion (see main text): “We won’t be looking for commercial rents. It will be in the £20s to create the right mood.”
Keeping it local
Deptford’s existing creative businesses are watching the developments proposed and under way with a mixture of interest, excitement and pangs of nostalgia.
Nicholas Burwell, partner at Burwell Deakins Architects, whose studio is at Deptford Bridge, SE13, says: “Deptford High Street was – until recently – as undeveloped as Exmouth Market 25 years ago. Fantastic local restaurants and useful bits and pieces, but it did not feel trendy. Then, last year, we had a cycle café open and that, I fear, is the beginning of the displacement…
“This is the last place within shouting distance of central London where you can still find decent office space for £13-£14 per sq ft, the last bastion of cheap, slightly run-down space.”
Burwell says developers will have to adapt their game to suit Deptford’s property stock, but he doesn’t doubt that they will soon be on their way. “We have less of the big chunky Victorian warehouses than Shoreditch, so it’s not as obvious a play for developers, but wander off down the side streets and there are some forgotten chunks of industrial land ready for developments.”
