MAGAZINE: London’s Square Mile plans for 2026

London must be the most under-the-spotlight of any major European business hub. With Brexit looming, rivals are seizing on any indication that occupiers are looking to leave the city. Yet, the UK capital seems to be stubbornly holding its own.

Data from Cushman & Wakefield suggests the London office market rallied in 2018 despite such uncertainly, with occupiers taking up more than 12.1 million sq ft (112,400 m2), the highest level since before the UK referendum, 3% higher than 2017 and 18% higher than 2016. Of the top 5 occupier deals in 2018, three were in the Square Mile, the name given to that area of the City of London that hosts most of London’s financial community. It is also the area said to be most under threat.

Notwithstanding Brexit, the City of London Corporation which is the governing body of the financial centre of London, has to plan for the future. Under a Transport and Local Plan not driven by Brexit but by a long-term need for planning, the Corporation has invited comments for plans that are destined to shape the district and indeed alter its skyline. The final version of the plan will be published this spring but last month the Corporation gave a view of what the City of London would look like in 2026 if all the developments that currently have planning consent are completed.

The tallest of the new skyscrapers earmarked for a cluster to the east is 1 Undershaft that has consent for a 304.6-metre-high structure of 73 storeys, though it is still subject to what is known as a Section 106 approval – sometimes known as developer contributions. See the table for all the other proposed developments.
As well as new builds, the plan envisages changes such as speed limits of 15 miles per hour for vehicles and a 30% reduction on deliveries using consolidation centres outside the City. The idea is to get more people cycling, walking and spending time in the district including after hours with greater provision of leisure places to hang out. There is also to be Britain’s first large scale zero emission zone covering the eastern cluster.

Chris Hayward, chairman of the Planning and Transportation Committee at the City of London Corporation, explains the factors behind this plan that seems so incongruous with doomsayers. ‘What we are continuing to witness in the City is unprecedented growth in terms of demand for office space. When I took over as chairman of planning three years ago, we had some 450,000 commuters coming into the City a day, and now we are up to 513,000.’

Crossrail effect
This number, he says, is set to grow further when London’s new high frequency railway begins carrying people in the autumn this year. Tunnelling work for the £15 bn (€16.8 bn) Crossrail project – a dream that actually dates back to at least 1974 and arguably back to the 1880s - began in 2012 and is now complete. The new line will be called the Elizabeth Line after the sovereign. ‘Once Crossrail opens, it will add probably another 60,000 to 70,000 people a day,’ explains Hayward. ‘What we are finding is that notwithstanding the Brexit scenario, there is interest in the office development market in the City. A lot of it comes from overseas - particularly players from the Far East who see the City as a safe haven and long-term investment and frankly don’t seem to be too fazed by the Brexit scenario.’

New planning applications continue to pour into the Corporation’s offices. The picture is already changing in the centre as a more diverse occupier base such as media companies, technology and fintech firms recruit younger people from a range of backgrounds.

But it is this swell and youthful feel that is also putting pressure on the public realm and for public spaces to be engineered better. In response, the Local Plan is meant to identify zones for growth, which brings us back to an area destined for a cluster of tall buildings. The images seen here illustrate how London will look in 2026 because that is when the buildings currently under construction and those yet to be started should be completed. In essence, they show the City of London’s development pipeline. However, the plan incorporating all these ideas looks much further than 2026 – to 2036 in fact.

Heritage sites
Those that govern the Square Mile of London deem it best to try to strike a balance between preserving its heritage and allowing modern development. There are indeed 30 conservation areas in effect protecting certain parts from intrusion by buildings. View lines exist to protect views of historic buildings such as the dome of the Anglican cathedral designed by Christopher Wren and Nicholas Hawksmoor – St Paul’s. These sight lines of course restrict where tall buildings can go. This is why tall buildings up to 70 storeys high housing between 12,000 and 14,000 office workers are clustered together in an eastern area. But of course, that is not to say development cannot go ahead in other parts. The best example is perhaps the groundscraper that is Bloomberg’s new London HQ which has won multiple awards including being dubbed the world’s most sustainable building.

Developers can of course change their minds and time frames, and they also have five years from the point of gaining planning consent to beginning on site until the licence lapses, so the City of London cannot guarantee all the projects will come to fruition. In the meantime, new consents are being given all the time. The Local Plan provides for additional development potential in the eastern cluster.

Investment managers and property services firms have been suggesting a good play might be to deliver offices before that, in 2022 to be precise, because of a dearth of activity slated for that time. Mike Sales, head of real estate at Nuveen Real Estate, pinpointed such a strategy as being interesting during the JLL 2019 outlook seminar in London last month.
Hayward says such a scenario is not impossible. He is quite confident that as well as new builds there will be a significant number of refurbishments. Half of the City of London’s office space has been refurbished since 1990, he points out.

Strict criteria
When applications are received, however, plans must adhere to certain policies. A lot of applications being approved by the City of London Corporation contain ideas such as viewing galleries at the tops of buildings, or possess a cultural element, or agree to let deliveries be handled at consolidation centres.

Hayward says he has been part of delegations visiting New York, Paris and Stockholm. ‘One of the things that has encouraged me is that we are significantly ahead of New York and Paris. We look at Stockholm and Sweden as different because of the abundance of space, whereas we are constrained due to being a medieval city. For me, a city that exemplifies high-quality public realm and ease of accessibility for business people to get around would be Singapore. It is a very clean city because of the laws about cleanliness. But against all of that, I would say the City of London is still up there. We have a fantastic global talent pool and a mix of old and new with high quality public realm. I am not complacent, but I think we are doing the right things to ensure London stays at the top.’