From the banks of the Thames to Elephant & Castle, new retail and leisure spaces are emerging. Mark Simmons reports
New retail and leisure opportunities on the South Bank are a bit like London buses: there are none for ages, then several come at once.
Peter Courtney, director at Lunson Mitchenall, says: “These opportunities are very significant as provision of both retail and leisure is presently very poor. A tremendous amount of people are not being economically satisfied.”
Within the next few years, that situation will change dramatically, as a raft of commercial and residential developments bring retail and leisure space with them. One of those already emerging at the eastern end of the South Bank is Berkeley Homes’ One Tower Bridge, which will include up to 13 shops and leisure units totalling 34,000 sq ft. One of the three river-facing units has already been taken by Ivy Brasserie (8,000 sq ft).
Slightly further west, the area around London Bridge may be something of a building site now, but when Network Rail’s redevelopment of the mainline railway station is complete in 18 months, it will include 70,000 sq ft of new retail. Andrew Sell, senior asset management executive at REM, which manages the Shard, is looking forward to that time. “It will create a far better environment,” he says. “We are pleased as the space under the station concourse needs more retail.”
An even larger amount of commercial space is planned at Waterloo Station, where the former Eurostar terminal gained planning consent in May for 130,000 sq ft of shops and leisure space, which could complete by early 2019.
Neil Davies, partner at letting agent Farebrother, says: “This will be a shopping destination in its own right. Rental levels will be fairly high – adjacent retailing is achieving £100 per sq ft.”
However, some market commentators are sceptical about comparisons with the retail offer at St Pancras. Knight Frank partner Mike Wimble says: “I could envisage a Spitalfields type of offer there – small, boutiquey retailers.”
Nearby, work is due to start this month on Leake Street Arches, where 24,000 sq ft of leisure space should complete early next year. Farebrother’s Davies reports offers on all units, with rents around £45 per sq ft.
Already coming out of the ground near Waterloo is Hermes and CPPIB’s South Bank Central, where 36,000 sq ft of retail and leisure space, due to complete this September, will underpin 220,000 sq ft of offices above. Farebrother partner Jules Hind says that a gym, coffee shop and food outlet are already under offer to a mix of slightly different operators.
Almacantar plans a similar offer at Southbank Place, with as many as 10 retail and leisure units totalling 25,000 sq ft due to complete in 2018.
The development of new office space is likely to increase demand for eateries across the South Bank. “We will get restaurants going down there of a quality that just aren’t there at the moment,” predicts Michael Webb, director of JLL’s central London retail team. “I don’t think it will ever be a fine dining location, but it could easily attract Covent Garden-type top end operators like Flat Iron and Balthazar.”
Cultural identity at risk?
A potential retail boom on the South Bank is not being met with universal approval. Although most commentators welcome the floorspace, they believe the tenant mix should reflect its locale.
Nigel Lea, design director at architect Gensler, says: “With the Royal Festival Hall and the Hayward Gallery, the South Bank has a rich cultural capital, and it is crucial that high street chains don’t detract from the depth of its artistic identity. The retail must complement – and not overwhelm – the cultural offering.”
Retail push for Blackfriars Road
For decades Blackfriars Road has acted as a transport artery taking traffic to and from the river, rather than being a destination in its own right. Consequently it has attracted very little retail interest. “There are great long swathes of streetscape without anything of interest – the area is woefully provided for,” says Farebrother partner Jules Hind.
But that is all set to change. A local authority-led initiative aims to break Blackfriars Road out of its confines as a shopping wilderness. Last year, Southwark Council launched a retail opportunities strategy which identified potential for around 100,000 sq ft of new shops along the corridor. The objective, according to a council strategy paper, is: “To engage interesting retailers who can bring new ideas to Blackfriars Road and create a genuine mix of quality and distinctive retail. We are seeking to bring animation and life to the street at Blackfriars Road and encourage pedestrian movement between the river and the Elephant and Castle.”
This year, council programme manager Dan Taylor has organised walking tours of the area for developers, investors and other interested parties, and reports that the response has been overwhelmingly positive, particularly from the development community. The ground-floor shops are being created as an integral part of new commercial and residential buildings, including St George’s One Blackfriars, Derwent London’s Wedge House, Crest Nicholson’s 19 Valentine Place and Barratt’s North East Quadrant.
Although the council has no control over who will occupy the new units, Taylor is confident that well-known brands will be balanced by independent operators. He says: “The aim all along has been to create an interesting and varied mix – one which adds value to the local community as well as investors.”
New office workers fuel demand
The Shard led the way in creating a new generation of office space on the South Bank and other developments are following in its wake, including Southbank Place (the former Shell Centre) and South Bank Central.
The arrival of thousands of new office workers in the area over the next few years – effectively a captive audience – has certainly not been lost on those providing space for retail and leisure occupiers.
Stephen Bradley, asset manager at Hermes Investment Management, joint owner of South Bank Central with CPPIB, says: “Office occupiers are keen to attract the best talent to their businesses, which requires more than just high-quality office space. It requires appealing amenities that add to a location and businesses’ identity.”
Tomáš Jurdák, UK chief executive at developer HB Reavis, agrees. His company has purchased 61 Southwark Street for £44m, which it plans to refurbish to provide 77,000 sq ft of offices and he says the burgeoning local retail and leisure offer was crucial when deciding whether to go ahead with the deal. “The South Bank offers many great amenities along with a real sense of character, which is particularly attractive to media and creative businesses,” he says.
