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Inside The £4B Transformation Of Waterloo

“When they originally built the Shell Centre they had to include a swimming pool, rifle range, cinema and squash courts to get people to come and work south of the river. I thinks it’s safe to say they don’t need to today.”

Almacantar Project Director Geoff Taylor is musing on how, for decades, Waterloo was an office backwater. Shell built the 27-storey building in 1962 and, along with neighbouring Elizabeth House — built around the same time but much uglier — it has been one of the few large office buildings in the area, in spite of Waterloo being London’s busiest train station.

Now, what Taylor calls “one of the few great remaining train station development opportunities” in London is starting to take shape, and Waterloo is set to become a true office location.

One and Two Southbank Place

Waterloo and the surrounding South Bank have undergone a cultural renaissance, with the refurbished Royal Festival Hall and British Film Institute cinema complex at the heart and food markets and new restaurants trailing in their wake.

And where culture goes, offices and residential development follow. At Elizabeth House, new owner HB Reavis last month started a public consultation on plans for a redevelopment that could comprise up to 1M SF of offices, retail and public space. On a 5.25-acre site around the Shell Centre, Canary Wharf Group and Qatari Diar formed a development joint venture with Shell to build Southbank Place.

The numbers for the Southbank Place scheme as a whole are huge: 1.5M SF of development with a total cost of £2.5B is taking place, including developing more than 800 apartments across five buildings. Almacantar bought the office element of the scheme in 2015, a development site that would go on to become two buildings totaling 572K SF. The four-way development agreement between Shell, Canary Wharf, Qatari Diar and Almacantar runs to 898 pages. It will take 20 cranes, 1.2 million hours of labour and more than 6,600 pieces of steel to build.

Two residential buildings at Southbank Place with the London Eye in the background, taken from the terrace at Shell's new One Southbank Place office (the glass building on the right).

The 272K SF One Southbank Place was already pre-leased to Shell as an extension to its Shell Centre HQ. The 300K SF Two Southbank Place was not leased at the time Almacantar bought it, but in 2017 WeWork pre-leased 280K SF for what will be its largest office anywhere in the world, for now.

One Southbank Place is set to complete and be handed over to Shell for fit-out by the end of August, and Two Southbank Place is scheduled to be delivered to WeWork by the end of November. Taylor gave Bisnow a tour of what will be one of the largest office schemes completing in London this year, and which will be the first phase of Waterloo’s office transformation.

One of the giant floorplates in WeWork's Two Southbank Place office, its largest office globally

Taylor said that when Almacantar bought the scheme, the vacant 300K SF, 17-storey second building represented a significant amount of leasing risk — the South Bank market has performed well since the downturn, but it was still a big chunk of space that needed to be leased.

“When we bought the scheme, we didn’t think we’d lease it to a single occupier, it was designed so that it could be leased in chunks,” he said. “But we also had a bank and a law firm in talks to take the whole of the space before we agreed the deal with WeWork. There was interest from a broad range of office occupiers.”

Floorplates in the building range up to 20K SF, giving WeWork plenty of opportunity for the large, open-plan coworking spaces it favours. Taylor said leasing the building to the company made it a different kind of proposition as a developer, removing the need to add suspended ceilings, so WeWork could create its stripped-back aesthetic.

The entrance lobby to Shell's office at One Southbank Place.

When it signed the lease WeWork said it wouldn’t be a standard office space, but would also include more technical offerings than usual, such as 3D printers, laser cutters and machinery needed to develop product prototypes.

All eight buildings in the Southbank Place development share one huge basement, so a quick underground walk leads to the lobby of Shell’s new office, where the brass used above the doors echoes the fittings of the adjacent Shell Centre.

“Shell were very much on their own here for a long time, people used to walk across the bridge to take a photo of the Houses of Parliament then walk back again,” Taylor said.

At Elizabeth House, HB Reavis bought the existing building from London & Regional and Chelsfield for £250M in 2017. The building had already been earmarked for redevelopment, with planning granted for a 945K SF scheme designed by David Chipperfield.

Elizabeth House

But HB Reavis has appointed AHMM to design an innovative new scheme, with a first public consultation having been undertaken, and further consultation due later this year feeding into a new planning application.

Initial sketches of the new £1.3B scheme show that as well as office space, the new building will also have a retail space provisionally called the “Big Hall” which the developer describes as “a bustling and ever changing retail space which serves to create additional permeability at ground level and complements the existing local retail offers”. There would also be new shops and restaurants on a pedestrianised street connecting the building to Waterloo station, plus two other new public spaces.

HB Reavis said the building would be of similar height to the previous designs, but would not include the luxury residential aspect planned by the previous developers.

“We do not believe that the inclusion of residential is right here — the apartments would inevitably be hugely expensive for people to purchase and do little to meet London’s housing needs.

HB Reavis' initial vision for Elizabeth House

“Given the location next door to the U.K.’s busiest train station, we believe it is right to focus on creating additional work space — which could support thousands of new jobs, generate much higher revenues for businesses in the local area and help to reverse the decline in commercial office floorspace in Waterloo in recent years,” HB Reavis said.

Shell isn’t going to be on its own in Waterloo for much longer.