Which sectors are driving demand in the capital?
Dan Bayley, head of central London, BNP Paribas Real Estate
The great thing about London is its diversity. We’ve seen a dramatic shift from the steady state of 35-40% financial services, 20% professional services, and then the rest.
It’s changed around completely. We know the banks are not in the marketplace, most of the lawyers are not looking for more space at the moment, but the accountants are busy.
More importantly, the TMT sector, which is a very broad church, is really active in London. It was active last year and it has started off this year accounting for nearly 25% of the take-up in the first quarter. We see demand all the way from small and medium-sized businesses to the big companies.
But we mustn’t forget that financial and business services will come back, and we’ve got to make sure that the framework that London sets out with policies, particularly in relation to taxation, are favourable to that growth when it does come back as TMT won’t be able to sustain its current growth over the long term.
Is it inevitable that London will dodge recession?
Faraz Baber, executive director for policy, London First
London continues to prosper in terms of creating and delivering development, in both the commercial and the residential markets. But that doesn’t mean we should be complacent. There is still a strong need to ensure that we invest in London.
But equally we should also be looking at softer policy issues, such as immigration, and trying to get those right. We’ve had a lot of problems getting people through UK Border Control, so a lot of work has to be done to make sure we fix that, to ensure that London retains its world city image.
We should also be looking to how we can attract global talent. That’s fundamental to ensure that occupiers in London feel that they can get the best talent to work for them. We are in difficult economic times but London has managed to buck the trend.
Julian Barwick, joint managing director, Development Securities
Complacency is always a risk. But there’s an enormous political will combined with the will of business generally to make sure that London continues to address the problems it has, and the opportunities that are available to it.
Development here in London at the moment is very challenging. But there are undoubtedly areas, pockets of growth, where development is working. Residential is an extraordinary success. Commercial development is much less easy to make sense of, and is very much a market for the professional today.
How does the National Planning Policy Framework fit in with the London Plan?
Simon Ricketts, UK head of real estate, SJ Berwin
London has a huge advantage with its London Plan, the only regional strategy that remains, and the London Plan and the various borough plans are largely compliant with the policies in the NPPF. Life continues as usual. The real thing we have to watch out for in London is how neighbourhood planning is going to play out, because I don’t think Greg Clarke and the government have really thought through how neighbourhood planning really works in London. That’s going to be the thing to watch.
We never have clarity with planning. Planning has to be flexible enough for individual circumstances. But what we do know is that London is largely immune from most of the effects of the NPPF. It’s a necessary piece of housekeeping that should have been done years ago, boiling down all of this policy guidance into one document.
This isn’t driven by the profession. What the profession, whether it’s the planning side or the legal side, really wants is a stable system, a system that we can explain to clients, and which allows us to give clients precise advice as to the way they should construct their schemes in order to have a smooth run through the process.
We have built up layers of complexity, through our various failed attempts at planning, to arrive at an appropriate system.
What are the most important lessons to be learned from the Olympics?
Baber
When we want to get things done, we can get them done. The mayor can work with the boroughs, the boroughs can work with the mayor, and the mayor can work with the development industry to make things happen in a timely fashion. And we mustn’t lose that traction as we proceed.
We’ve also learned a lot about how we can prepare businesses for the whole Olympic experience, including things like night-time deliveries, travel plans, and all of those experiences that we’ve taken on board while preparing for the actual event. They are key concepts for us to take forward.
