How East London Conquered The World
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East London has won.
There are other areas of London that are vibrant and have big, interesting projects springing up. But East London has created a virtuous circle that surpasses other neighborhoods: it is full of interesting people, companies, restaurants and cultural institutions, which in turn attracts more interesting people, companies and restaurants, and so on.
The property industry is tapping into this, creating new buildings, schemes and sometimes even whole new districts without, so far, killing the spirit that makes the area so dynamic. From the hipster heartlands of Shoreditch, further east to Stratford and Hackney Wick, and south to Canary Wharf and Docklands, East London is where much of London’s expansion and growth is occurring, a phenomenon which will be discussed at Bisnow's Future of East London event 12 June.
The appeal of places like Shoreditch is obvious — that organic mix of brilliant restaurants, cultural institutions like art galleries and music venues, and the tech and creative industry companies which have been the driving force of the London economy for the past five years, Crosstree Real Estate Partners principal Peter Robinson said.
But in order for the area to flourish and grow, particularly from the point of view of the property industry, there needs to be a confluence between the indigenous population and those wanting in.
“What’s the special sauce? People have been able to repurpose existing buildings in a thoughtful way to create flexible working space for the occupiers who are drawn to that network of cultural attractions,” Robinson said.
An example he points to is the Bower, a 400K SF office and mixed-use development near Old Street Crosstree undertook in a joint venture with Helical Bar. The appeal of redeveloping the building was partly the ability to adapt the existing period architecture, and partly its proximity to cultural attractions like the Victoria Miro art gallery.
The ethos behind buildings like the Bower is spreading beyond East London, and becoming a standard across London and beyond. The mix of uses that large former industrial buildings allowed, rather than just the industrial aesthetic of exposed brickwork, is becoming more common in newly created offices.
“Being mindful of how you programme the building has become key, you’re seeing a bit of a coming together of the hotelier and the developer,” he said. “A mix of uses, generous, considered public spaces, wellness facilities like gyms, yoga/breakout and outside space, design-led flexible office space, putting function over form and providing future optionality to the occupier is probably a greater consideration than exposed services or not.”
East London has clearly had big success in drawing in small and midsize tenants that previously might have favoured the former creative heartland of Soho; and bigger tenants who might have been located in the City or outer London business parks. Examples include Amazon, who took 600K SF at Principal Place on the border of Shoreditch and the City.
As a result of this spike in interest, rents in East London have performed strongly. Since the financial crisis, prime rents in Shoreditch and Islington have more than doubled, according to data from DeVono Cresa, from below £30/SF to more than £65/SF. Rents in Clerkenwell and Old Street have risen from below £40/SF to above £70/SF. Areas like the City and West End, by contrast, are at about the same levels or even below recession levels.
It is not just existing areas of East London benefitting — driven by the Olympic legacy programme, whole new commercial districts of East London like Stratford are being built and proving very successful for occupiers.
“Companies want to come to these areas because they want to align themselves with what they stand for,” Lendlease’s Project Director for the International Quarter London Lisa Gledhill said. “Companies are interested in attracting talent and they like what East London stands for — it is fresh and new and interesting. An area like Stratford and the Olympic Park stands for health and wellbeing and companies want to tap into that.”
The International Quarter and the former Olympic Park is a redevelopment on a massive scale, but it too benefits from proximity to existing cultural hotbeds, like Fish Island in Hackney, referenced by both Gledhill and Robinson as an area with lots of small creative companies that larger occupiers want to be close to.
The office portion of the International Quarter will total 4M SF, and occupiers including the Financial Conduct Authority, Transport for London, Cancer Research and the British Council have already occupied around 840K SF of that.
And success is breeding success in East London. The existing cultural and creative infrastructure is drawing new cultural institutions to the area, making it even more appealing for residents and companies looking to move there.
The Victoria & Albert art and design museum is one of these institutions. It is selling Blythe House, its archive facility in West London which houses more than 8km of corridors, and moving to the new Stratford Waterfront cultural quarter on the Olympic Park alongside University College London, the London College of Fashion and Sadlers Wells Theatre.
It will occupy around 65K SF at Stratford Waterfront and also take overflow space at Here East, the workspace facility created out of the former Olympic Broadcasting Centre.
Its reasons for moving to East London throw into sharp relief the area’s lasting appeal — an existing talent pool, proximity to other cultural institutions and room to expand.
“We’re an art and design museum, so we already have a deep existing network in that area, and a lot of our staff live in the area,” V&A Chief Operating Officer Tim Reeve said. “But there was a whole ecosystem which drew us. You have the range and breadth of partners we’ll be working with in Stratford, like Sadlers Wells and the London College of Fashion; plus places like the Stratford Theatre and the organisations already present in Hackney Wick; people like Plexal at Here East; and Mossbourne Community Academy and a whole range of other schools large and small.”
Reeve said that historically major museums and galleries had not had a presence in East London, due to the nature of London’s geography at the moment they were born. But London’s geography and infrastructure today are drawing these large institutions east.
“You have to remember that when Albertopolis was created, the area was just a field,” Reeve said, referring to the nickname given during the 19th century when the cluster of museums in South Kensington including the V&A, the Natural History Museum and the Royal Albert Hall was created, a process led by Prince Albert, husband of Queen Victoria.
“East London is a former industrial hub, so there is plenty of space available for large-scale projects,” he said. Mirroring Gledhill’s comment about being aligned with what an area stands for, he said this industrial past drew the V&A to the area. “When the Bethnal Green Museum (now the V&A Museum of Childhood) was created in the 19th century, it was with the idea of bringing culture to the industrial areas of East London. We’re a museum about design and making, so that industrial heritage has a big appeal for us.”
Stratford is not the only place where there is plenty of available post-industrial land — Docklands, and further east areas like Silvertown fit that bill perfectly too, and transport links like Crossrail will make them even more accessible. East London looks set fair to be the engine of London’s growth for some time yet.
Learn more at Bisnow's Future of East London event 12 June — Reeve, Gledhill and Robinson will be presenting. For a discount to the event use code EL30.