Building central London’s future
A manifesto calling on the government to deliver a long-term investment plan for central London has just been published by the City and Westminster Property Associations. We invited property industry experts to breakfast at Cut, 45 Park Lane, to discuss why the proposals are needed.
Kate White reports
Daniel Van Gelder: Westminster and the City alone produce 28 per cent of London’s GDP. The greatest risk to that contribution, and to central London’s £100 billion real estate industry, is uncertainty. London needs a certain political future in Europe, rather than dilly-dallying round the edges. And we want a long-term infrastructure plan to provide a framework for continued investment by Westminster Property Association members.
We want the environment to be healthy for residents, workers and visitors. We need better energy and internet provision. We want better buildings and spaces. We want businesses to be able to recruit the world’s best employees, and we need greater financial autonomy for the capital to spend more of the money it creates.
We want Westminster to be able to keep the money it creates. We don’t mind if some of it gets spent in Scotland, or even north of Watford. But we want to be able to keep and control more of it. We want the importance of central London on politicans’ minds. Or, we may just start campaigning for the new city state of London.
Growth is a word that means very different things to different people, and it’s a word that the city council has started to bandy about more recently, perhaps without explaining to people what we mean by it.
One thing we’re not looking to chase is what we call value growth. If the growth we seek is continued added price per square foot, we will drive out the small businesses; we will effectively turn London into a pseudo-bank; and we’ll lose the diversity and the character that defines Mayfair and the West End.
Daniel Van Gelder:
Should Westminster grow, should we get bigger, and if we do, how do we do it? If the mayor has set a target of more than 40,000 new homes a year in London, and if Westminster is required to build some of these homes, should we be providing less four-bedroom flats and more one-bedroom flats? Would that be welcome and would it be wanted by the market?
Shirley Humphrey: I’ve found there is a demand from single business-people and couples who are working in central London, wanting to live in central London too. There’s certainly a shortage of one-bedroom flats. We just recently took on a development that’s coming up in Knightsbridge, which will be converted into 11 studio and one-bedroom apartments. The demand for that is huge, because it’s a price point that is more realistic for people to get into the central London market.
Daniel Astaire: I totally agree that looking towards smaller units will redress the price differential in the city; it will create the space so that people who need to be here can actually be here; and I think it would have a very positive, beneficial effect.
Will Bax: The Mayfair Neighbourhood Forum has recently consulted Mayfair residents and workers on the draft of our neighbourhood plan, and of course housing was an issue. Some parts of the community felt there wasn’t sufficient low-cost housing in Mayfair; and others felt that Mayfair wasn’t an appropriate place for low-cost housing.
I think they are debates that will continue to rage. A constant theme was the housing stock that is not lived in is unacceptable. So the delivery of large-scale lateral apartments that get lived in 20 per cent of the year is making very little contribution.
But read the Ramidus report, a study of the prime and super-prime residential property market in central london. One finding showed that owners properties worth £5 million-plus contribute £2.3 billion a year to economy.
Interestingly that report was published pretty much the same week as the consultation. But there remains this perception that if people don’t live in apartments, they don’t make a contribution to the community.
Robert Davis: But there’s also another argument which says that if you own a property, you can do what you like with it. Why should someone tell you what to do with your own property? I’m not saying I agree with that, I’m saying it’s an argument.
Look at the Brits – when we had the money in the 60s and 70s, what did we do? We got on a plane, we went to France and Greece and bought our villas and we used them two or three times a year. It’s free flow of money.
Mayfair is an instantly recognisable quarter, distinctive in its character and composition. And with regards to the built environment, it is that individuality that drives our approach to Mayfair. The area represents one of the most concentrated art markets in the world; with as many as 100 retail galleries located in Mayfair alone.
The landscape of 21st century Westminster represents a challenge to the city council. It demands of us a broader approach, considering the wider implications of granting planning permissions, as well as the implications that our public realm heritage, transport and spacial strategies will have on this area we’re trying to grow.
This approach is one we’ve termed place-making. Place-making represents a holistic approach to our communities, encouraging proper consideration of all that is present within them. It’s my goal to promote this comprehensive view of an area, taking into account the people who live there, and the legacies already in place in neighbourhoods.
Daniel Van Gelder:
One of the wonderful things that some of the people around this table have done – like Stuart at Cadogan, for example – is taking streets and turning them into something exceptional for the long-term benefit of London. I know Shaftesbury are trying to do the exact same thing with Carnaby Street and the streets running off it.
Will Bax: There is an emergence of other places of real significance and interest, commercial significance, which is putting in motion a steady exodus of commercial occupiers from this part of the city. Understanding that trend and how you can build the quality of product, and the quality of space that identifies the new commercial markets, is really important – and public realm has to be at the centre.
It strikes me that there is this extraordinary opportunity for Westminster today, with the likes of Grosvenor and the Crown and the other estates – and with developers who have really woken up to this idea of place-making – to revisit an approach to partnerships investing in Mayfair as a place.
Office to residential
Daniel Van Gelder:
I know something that’s worrying the larger landowners is the conversion from office to residential, where suddenly you can get a retail street interrupted by a residential block. Berwick Street [in Soho] is a good example, where we’re now seeing more residential being built, breaking up what could otherwise be a great extension to Carnaby Street.
Will Bax: The erosion of commercial space is a very interesting issue for landowners. You have to go back to the question of the place you want Mayfair to be as a world destination. That success will only be preserved if we protect its commercial significance.
The more large, lateral residential schemes we build, which erode the vitality of Mayfair as a place, put that pre-eminence at risk. It strikes me that this whole conversation to some degree is about resilience, and how we look at Mayfair as a place that is continually relevant to the world, not just to London.
Where Will says erosion, I would say reversion. Because let’s not forget, Mayfair was a totally residential area a century ago. In the next ten years, Crossrail will give people the opportunity to get into the centre quicker.
For Mayfair alone, the amount of residential addresses is going to increase by over ten per cent, which could increase the population count by 25 per cent. So it’s a big game-changer, and I think it will bring vitality to the area.
The reversion to residential, all the way up and down Crossrail, is actually reviving all these areas where previously, no one would have thought of living. And now they’re saying, this is great, this is vibrant – all the shops are here. So I think it’s a positive.
Daniel Van Gelder:
Nicholas Austin [from Jackson-Stops and Staff] was saying earlier how flat sales are doing very well in Mayfair, but house sales are slower. The explanation was that people are looking for big lateral spaces as opposed to lots of stairs. And actually, the same is true with offices as well.
Small businesses in particular don’t necessarily want to be in small offices above shops. They want big, social spaces with all the latest technology, where they can share with other people, collaborate with other people, and grow and shrink in the same space.
That’s why you’re seeing the rise of serviced offices in London, and it’s not just the Reguses of the world, but the invasion of the American serviced office providers. WeWork is now taking over Sea Containers House for example. Everything now is about the big lateral space. In residential terms, do we think that will continue or is it just a fad?
What I’ve found is that, certainly with our international clients, they want the large lateral properties, especially with the services and the lock-up and go luxury facilities. If they are looking for a house then they want it with a lift. They love a glorious staircase, but the vast majority of them don’t want to use it. So it’s a very particular, niche market we deal with, which has very specific requirements.
As Daniel mentioned earlier, people do want to have big, open plan offices, and the challenge is to get good offices in the right places. We’ve always been burdened, both residentially and commercially, by a height issue. We all listen to the electorate, and people don’t want the extra storeys. We’re restricted by the historic parts of London.
Robert Davis: We are addressing that. We certainly believe now, that to achieve the growth we need in Westminster, we need to look at how we can maximise and increase floor space. We don’t want to build Shards all over Westminster, but an extra floor or two floors here and there is possibly reasonable.
The contrary argument I get from my design and conservation office is that you take say, a beautiful butterfly roof, which could actually take another storey or two. But because it’s an original 18th century roof, albeit one that nobody can see, it’s absolute sacrilege that I should give it another floor, because you’re losing the heritage and history of Westminster.
So there’s a balance there. In some senses, yes we do need growth. But if you redevelop every property that’s an important original building, there will be nothing left of the original history of Westminster. So it’s getting that balance right and saying, sometimes you can lose a butterfly roof that’s 300 years old; and other times saying, maybe it’s worth the preservation.
A global city
From an international outlook, the greatest threat to the property industry at the moment is indecision. The government keeps on changing the rules regarding taxation, but we need to be a stable environment where people know that if they’re going to invest in London, they’ll be on a level playing field.
From my perspective, UK-based buyers make up just under 50 per cent of all buyers, which I think is very admirable. From an overseas point of view, about 25 per cent of our trade in Mayfair is with the Indian community.
I see overseas buyers as a great accolade for Mayfair. You have people from all over the world who are very intelligent and they want to invest in London as one of the global locations of the world.
They’re not coming here just for the residential, they’re coming because of the amazing offices and retail, and the cultural facilities. To have all this investment coming into central London from across the globe, I think is very encouraging.
Daniel Van Gelder, co-founder of Exemplar Properties. Daniel is also chairman at City and Westminster Property Associations, which have 400 members comprising major owners, developers, investors and advisors on central London real estate.
Jace Tyrell, executive director at City and Westminster Property Associations.
Councillor Robert Davis, deputy leader of Westminster City Council and cabinet member for the built environment.
Councillor Daniel Astaire, Westminster City Council cabinet member for housing, regeneration, business and economic development.
David Shaw, owner of David Shaw chartered surveyors and head of the £2.4 billion Regent Street Portfolio at The Crown Estate. David is also non-executive director of The Pollen Estate Trustee Company Limited.
Stuart Corbyn, chairman of Qatari Diar Delancey Athletes Village Operations and Get Living London – a residential owner and rental management company. Corbyn was previously chief executive of the Cadogan Estate for 23 years.
Will Bax, director of the London Estate portolio at Grosvenor, and chairman of the Mayfair Neighbourhood Forum.
Peter Wetherell, founder and chief executive of Wetherell estate agent.
Georgina Bartlett, head of lettings at Savills Mayfair.
Susan Cohen, head of sales and lettings at Pastor Real Estate.
head of sales for Mayfair and St James’s at Jackson-Stops and Staff.
Shirley Humphrey, sales and marketing director at Harrods Estates.
Christophe Hilty, hotel manager at 45 Park Lane, a Dorchester Collection hotel.
Selma Day, editor of Mayfair Times.
Sam Bradshaw, advertising manager at Mayfair Times.
Kate White, property reporter at Mayfair Times.
*The breakfast menu at Wolfgang Puck’s CUT at 45 Park Lane, which offers contemporarary interpretations of classic breakfast dishes from England and the US, is available from Monday to Friday: 7am-10.45am and on Saturday and Sunday: 8am-10.45am.