How Will London Look in the Future? Part 2
In part one of our The Future of London review, we looked at the discussions around the challenges the capital faces, how the urban space is designed and how to reduce food waste. In part two, the future of the high street, flexible working and challenges around housing all come under the spotlight.
The threats to London
On day two of the event, a panel that consisted of Chris Carter Keall from Oxford Properties; Vaqas Farooq of Shoosmiths; Tyler Goodwin of Seaforth Land; Andrew Hawkins from Cushman & Wakefield; and Adam Jaffe from Investec, talked about the threats to London in the future, as well as global investment trends, Brexit, and where are the next sources of capital.
The suggestion was that the UK economy is currently still very strong, in relative terms. However, this is primarily due to the current strength of the global economy. Therefore, any global event or crash would have a major impact on the UK’s economy, which highlights the current volatility, uncertainty, complexity and ambiguity that has surrounded London and the UK as a whole since the EU referendum back in June 2016.
Positivity post Brexit?
It was agreed that in the construction industry, this uncertainty has led to an additional element of risk that has encouraged some clients, developers and local authorities to postpone
decision-making until post Brexit.
Generally, there was a positive outlook on how our economy will look after the UK leaves the EU. But there is still a level of uncertainty and ambiguity, and this will remain over the coming months, and is likely to continue to impact the construction industry.
Vaqas Farooq, speculated that a Brexit deal is all but agreed and that there will be an ‘economic bounce’ in 2019 because of the latent demand built up in the run up to the UK leaving the European Union.
What will happen to the high street?
The prospect of ‘retail and leisure wonderlands’ was discussed by a panel of experts including Sam Cotton from Battersea Power Station; Joe Morris of Gowling WLG; Guy Nixon from Native; Darren Richards from British Land; and Kevin White from Montagu Evans.
The climate has been challenging for some retailers, and we’ve seen that at Henry Riley. The headlines often highlight this and, in some cases, have exacerbated the gravity of the problem.
But what they often fail to recognise is the positives of the current market condition.
There are still many retailers that are growing and prospering in the current climate. So there’s a very bright future for the sector. This may be achieved by looking at a retail space through a different lens, perhaps thinking about the positive impact of mixed use. This again emphasises the point that humans are social by nature and want spaces where they can interact and be a part of various activities. Shopping, it seems, will never be purely online.
Who will be the occupiers of the future? Where will London be in the global hierarchy of cities? How will we deal with the growing might of the serviced office market? Following a presentation by Natalie Lelliott of Colliers International, these questions and others were discussed by James Goldsmith from AXA IM; Mary Finnigan from WeWork; Shaun Simons of Colliers International; Martin Wallace from Brookfield Office Properties; and Roger Thornton of Maples Teesdale. The discussion was moderated by Sam McClary from EG.
There was the general thought that the future is about bringing people together to solve problems that we don’t know exist yet. A trend we are already seeing, and one which will be much more prevalent in the future, is this idea of a flexible working.
The rise of flexible working
The world is now so connected that (for the most part) we no longer need to be in the office 40 hours a week and we can work while on the move or at home. The panellists believe that we will see an increase in fully serviced offices, while traditionally let office buildings will essentially offer the same product to cater for the evolving working environment.
From the construction industry and Henry Riley’s perspective, it may mean that we see more developers and landlords not only carrying out shell, core and/or CAT A fit-out works, but also the CAT B fit-out too. This may mean that we see changes in the British Council for Offices expectations in how a CAT B fit-out is conducted and changes in the minimum expectations and requirements the work is required to satisfy. But at the same time, it needs to be adaptable for different types of businesses. It was agreed that we will always need head offices.
The housing problem
Do we need fresh alternatives to the modern residence? Taller buildings? Community-led housing? And are smart homes a reality for the many or the few?
In a discussion moderated by Sam McClary, John Connolly from Far East Consortium; Vanessa Hale of Strutt & Parker; Alex Lifschutz from Lifschutz Davidson Sandilands; and Lesley Roberts of Allsop, talked about how London’s housing stock would look in the future.
It was agreed that there was a lack of intermediate housing to cater for the average Londoner working and living in the area and this is likely to be further impacted by a growing ageing and affluent population. John Connolly argued that in order to produce housing which is affordable to the average Londoner, something will need to change. This could be through the government providing financial aid on the initial acquisition of sites. Alex Lifschutz made the point that where you tax one sector to aid another sector, you will always see polarity in house prices.
One interesting thought from this debate was, can we, and should we, let the housing occupier decide their own fit-out?
What was the main ‘take-away’ from the conference?
Perhaps one of the most refreshing and contemporary messages from the two-day event is that when it comes to London, it’s the people that should come first. They know what spaces they want to live, work and socialise in. This challenge is not a new one. Many major cities in the world do not allow its average citizens and workers the luxury of owning their own property and living a comfortable lifestyle.
But if London is to remain a global city, it’s a goal we need to work towards.
By Adam Gibbins, Associate of Henry Riley LLP