by Roy Sunderland
London’s Docklands has its many critics — those who often scoff and refer to it as the “location of last resort”. In some ways one can sympathise with these cynical views since the Isle of Dogs is a desolate plate in which to work and live, especially at this time of year, thanks to the congestion owing to its inadequate road access, made much worse by the mud thrown up by building contractor’s vehicles.
Its general image has not exactly been enhanced of late, what with the spate of sneering one-sided TV documentaries, fantastic revelations of mismanagement leading to wrangling between the Secretary of State and his Corporation’s chairman and the withdrawal of air services to Paris (now fortunately restored) calling into question the credibility of London City Airport.
And yet, there is no getting away from the LDDC’s achievements to date and all the news has by no means been bad!
In less than seven years an enormous area of desolate moonscape has been transformed into a hive of activity with almost 10m sq ft now under construction and at least the same amount again planned for phased development. It has inspired an entrepreneurial spirit of free enterprise and stands ready to create new homes and jobs for forthcoming generations on a vast scale that is the model for inner-city regeneration throughout Europe and in the United States. No mean boast!
But its enterprise zone attractions to date have largely been to tax-sheltering purchasers in the fields of media and communications and it has yet to demonstrate that it has come of age and achieved its frequently claimed role as an alternative location to the City for its institutions. The recent stock market crash has served as a sharp reminder to those involved in Docklands that their fortunes are inexorably tied up with its state of health and they can expect rental growth to slow appreciably in the next year or two.
In fact this might prove to be something of a blessing in disguise since it is Docklands’ low rent and rates costs to occupiers that are its greatest attraction in the absence of its ultimate environmental draw. Any erosion of those margins against the City’s accommodation costs should be avoided, and they are already dangerously narrow especially when taking into account the weighting allowance for London’s staff costs. At an already achieved rent level of £20 per sq ft with no rates payable until 1992, Docklands must look enticing to City organisations who, following the stock market debacle, are perhaps better placed to dictate to their staff precisely where their future operations will be located.
This may be a rather optimistic way of looking at the current scenario and of course much will depend on the way that City rents themselves hold up in the face of a fast-growing oversupply of space. For Docklands’ success to continue unabated it must exploit its current attractions to the full, one of the highest being its high levels of parking which can only partially compensate the City worker for the inadequacies of the DLR and riverbus services that do little to compare with the host of buses, taxis and underground stations enjoyed within the City boundaries.
So far the City slump has manifested itself mainly in the residential “futures” market, resulting in a hasty withdrawal by speculators leaving a suspicion that many highly geared City types will be forced to default, lose their deposits or complete and search desperately for tenants in order to service at least part of their outgoing.
Land prices are continuing to hold up well, especially along the Thames frontage, at levels of over £3m per acre, but the growing belief that bargains are soon to become available has resulted in many 11th hour renegotiations in agreed price and we expect this trend to continue into the second half of 1988.
The retail sector in Docklands also provides an interesting focus for the forthcoming year since, to date, the Isle of Dogs has relied on an overworked Asda and very little else to satisfy its needs. Exciting and long-awaited new schemes such as Tobacco Dock, Surrey Quays and South Quay Plaza Shopping will come on stream by the summer, which will be welcome news for more than those interested in merely their services and goods. Their performance will provide useful research evidence for retailers who, in some cases, have yet to be convinced of the true potential catchment and spending power of this traditionally low-income local population before venturing full tilt into the area.
Rosehaugh Stanhope’s plans for the Royal Albert Docks as a major 1.47m sq ft regional centre will undoubtedly give the likes of West Thurrock, Ilford and East Ham a real run for their money, especially now the new and vital M11 extension linking up with the A13 is in play — and, it is to be hoped, followed shortly by the East London River Crossing which will complete the picture. The currently proposed high-towered suspension bridge for ELRC needs and urgent redesign if the City Airport is to be viably exploited by a future extension of its runway permitting use by medium-haul jets — not to mention air-traffic-control cover!
The Royals — over 264 acres — will also provide enormous opportunities for leisure and business park development, a commodity already in great demand and short supply. We continue to receive numerous inquiries for data communication and computer centres from international concerns keen to follow Reuters into the area and to avail themselves of its “clean” fibre optic and satellite communications — facilities not readily achievable in Greater London.
The constant demand for versatile business units in new schemes such as at Cor Dor’s Meridian Gate and LET’s Glengall Bridge (shown above) are proving very successful. Potential owner-occupiers can purchase units of 600 sq ft to 10,000 sq ft at between £250 and £300 per sq ft with segregated adjacent parking, a waterside frontage, City specification finishes including full air-conditioning, wine bars, pubs, restaurants and shops around pedestrian piazzas. Gone are the days of tacky clap-board cladding — these schemes are in well-detailed brickwork with contemporary use of glass and facades of great character. However, pure office suites are the area’s staple diet and we detect an impending watershed this summer.
Inquiries from City support functions such as those in insurance, accountancy, banking and the law point to the first spate of non-fiscaled tenants of real scale choosing Docklands as a location.
Olympia & York are clearly experiencing an encouraging level of inquiry on Canary Wharf; we have prelet or sold almost all of our medium-sized (up to 40,000 sq ft) current stock and the first major buildings to offer evidence of this break-through will be ready for occupation by June at South Quay Plaza II and Harbour Exchange, each providing in excess of 140,000 sq ft of full international specification space.
There will be no going back. Docklands is here to stay and should be seen as a logical extension to the City rather than as a separate competing entity, providing a highly exciting waterside environment in which the unique opportunity to work, rest and play will overcome its short-term setbacks and will eventually confound its loudest critics.
