What was The Buzz in September?
Our monthly roundup of real estate industry news.
Here are a few of the stories that caught our attention in September. With proposals of some large-scale redevelopment across London, a ‘normalising’ housing market, and increasing uptake in flexible office space and hybrid working (with exception of Amazon), the general outlook seems positive in the commercial property sector.
Earls Court redevelopment moves forward with £10bn masterplan submission
The Earls Court Development Company (ECDC) has submitted a planning application for its £10bn+ masterplan to redevelop the former exhibition centre. If approved, the 40-acre, 7.5m sq ft masterplan would create 4,000 homes with 20-acres of new public open and green space, plus 2.5m sq ft of workspace and would be set to kick off by 2026 and continue into the year 2040 and beyond.
The detailed plans, which will see two new skyscrapers tower over Earls Court, were submitted this week after nearly a decade of delays due to resident and council disagreements, according to a report first seen in the Financial Times.
“There can’t be any greater example of a project that needs to get going than this one,” Rob Heasman, chief executive of ECDC, told the FT.
The push to move forward with its plans also comes as the new Labour government puts its ambitions to build 1.5m homes over the next five years at the forefront of its agenda.
Heasman told the FT that the current proposal of plans reflects detailed engagement with the local community, which previously expressed concerns over the lack of affordable housing. The concerns led to the scrapping of previous plans for the site under former owner Capcro. ECDC has said it aims for 35 per cent of its housing to be affordable under revised development plans.
Mayor claims pedestrianising Oxford Street will ‘re-establish it as world’s leading retail destination’
Traffic will be banned from London’s Oxford Street under plans announced by the mayor, Sadiq Khan, using new powers from Labour to push through long-thwarted pedestrianisation of the capital’s famous shopping strip.
Khan said urgent action was needed so that the mile-long street could “once again become the leading retail destination in the world.”
The deputy prime minister, Angela Rayner, is expected to sign off a proposed mayoral development area, giving greater powers to Khan as he revives the plans he first laid out in 2017.
The news was met with dismay by Westminster council, which blocked the previous plan amid businesses’ and residents’ concerns over rerouting buses, and whose own £90m “shovel-ready” regeneration plans for the street may now be superseded.
Politicians and retailers have for years sought to breathe new life into a street whose renown and cultural position on the most expensive side of the Monopoly board has long been at odds with a down-at-heel reality, even before the proliferation of shops selling American candy and dubious souvenirs.
Khan maintains that a pedestrianised street would enjoy increased footfall and spending, and generate increased tax revenue. He said: “Oxford Street was once the jewel in the crown of Britain’s retail sector but there’s no doubt that it has suffered hugely over the last decade. Urgent action is needed to give the nation’s most famous high street a new lease of life.
“I am excited to be working with the new government, and local retailers and businesses, on these plans that will help to restore this famous part of the capital to its former glory.”
As secretary of state for housing, communities and local government, Rayner can allow Khan to establish a mayoral development corporation with planning powers. Rayner said: “Oxford Street is a world-renowned shopping destination and we want it to stay that way.”
London leading the way as housing market ‘normalises’, Winkworth says
Take-up of flexible office space increased by 39% in H1 2024
Take-up of flexible workspace soared in H1 2024, according to the latest data from Savills and its specialist flexible office division Workthere.
In the first six months of the year, take-up of flex space reached 642,000 sq ft – 39% above the same period in H1 2023 and the highest H1 figure since 2019.
Savills and Workthere attribute the flex sector’s strong performance in part to soaring venture capitalist investment into UK start-ups. To the end of August, VC investment volumes into UK start-ups reached £362m – considerably up on the 10-year average
Entertainment software businesses – driven by AI growth – have accounted for £57m of VC investment activity so far in 2024, with business/productivity software (£53m) and biotechnology (£39m) ranking second and third, respectively.
Simon Preece, commercial research analyst at Savills, said: “VC investment is integral to those start-ups businesses looking to grow in terms of turnover, headcount and expansion. It is in these latter categories in particular where we often see a link to the flexible office market, as it is usually this space that provides a starting point for many start-ups, and indeed offers an environment for them to scale on flexible terms. It is therefore no surprise to see a surge in VC investment into start-ups correlate with a rise in flexible office take-ups from providers and operators cross the UK.”
They are two competing views on where desk-based employees work best.
Amazon is ordering its staff back to the office five days a week, just as the government is pushing for rights to flexible working – including working from home – to be strengthened. The tech giant says employees will be able to better “invent, collaborate, and be connected”. But just as the firm’s announcement became news, the UK government was linking flexibility to better performance and a more productive, loyal workforce.
Few are short of an opinion on how effective working from home is and for a government there are broader considerations such as how, for example, caring responsibilities are affected. But more than four years since the start of the pandemic, what does the evidence tell us about how we work best and is Amazon right to believe people being in the office full time will allow them to collaborate better?
Amazon’s fellow tech giant Microsoft studied its employees during the pandemic. It looked at the emails, calendars, instant messages and calls of 61,000 of its employees in the US during the first six months of 2020. The findings were published in Nature Human Behaviour., external
The study indicated that, during Covid, remote workers tended to collaborate more with networks of colleagues they already had, and that they built fewer “bridges” between different networks.
There was also a drop in communication that happened in real time – meetings that would have happened in real life weren’t necessarily happening online. Instead, more emails and instant messages were sent.
