Meet The Man Landlords Are Calling To Make Their Office Schemes Innovative And Edgy
LONDON — Property is coming round to Charles Armstrong’s way of thinking. A very well-known property developer is waiting to meet him after our interview to talk about the possibility of working with the Trampery, his shared workspace social enterprise. Armstrong is increasingly a man in demand.
The Trampery was set up in 2009, a tiny coworking facility in Shoreditch, London, when the word hadn't even been coined yet, an early mover in what is now a multibillion-dollar global industry. But Armstrong and the company he founded are a bit different.
First, as a social enterprise, the Trampery deliberately targets people and companies that can’t afford to pay the highest rents, and any profits the business does make get ploughed back to ensure rents stay cheap and the communities built at its five facilities across London are provided with as much support as possible. Its facilities sometimes target sectors that, by Armstrong's own admission, “you would never look to if you were trying to maximise profit,” such as small fashion businesses.
Then there is the fact Armstrong was a big player in the move to recognise Shoreditch as an innovation cluster, and its rebranding as Tech City, the heart of London’s digital startup community. Today, every city, developer and office owner wants to brand its area or assets as an innovation cluster. Armstrong has a background in sociology and a data company that make him an authority on how to really create a community of people and companies that feed off being close to each other, rather than it just been a branding exercise.
Combined these two things mean the communities the Trampery creates are full of very cool, very innovative and very interesting people. And today, that is something the real estate world wants.
Robert Wolstenholme’s Trilogy Real Estate selected the Trampery to set up a shared workspace at its 500K SF Republic office scheme in East India Dock in East London. As well as 9K SF of coworking space, the Trampery runs the community and events programme that all the building’s tenants can utilise. The life it has given the building is one of the things that has attracted tenants like Vodafone to what is not a traditional office location.
Delancey has brought the Trampery in to manage 10K SF at its 1.2M SF Here East scheme, providing small, very low-cost units targeting artists and creative companies.
Next year its most ambitious project yet will open, Fish Island Village, 50K SF of commercial space across 11 buildings in Hackney Wick, combined with 580 affordable homes. The commercial space has a particular but not exclusive focus on the startup fashion and coding sectors.
“As we get to the next stage of the cycle, property companies are realising that they need to offer a different proposition,” Armstrong said. “In 2009 when we started the Trampery, people thought, it’s lovely, but it will only ever be for startups and companies willing to take space in offices you couldn't otherwise let. But we were always of the view that what was happening in the creative professions would become the norm.
“The property industry has been very slow to adapt, a lot of them are just cottoning on to what was state of the art 10 years ago. If you want people to be creative you can’t put them in places that make them feel bad.”
He said while developers might not like the idea of offering the lowest rents possible (studios start at £625 a month at Fish Island Village), it can be good for them to include such workspace in their schemes.
“A lot of the more innovative developers have become very adept at creating meanwhile uses while they build schemes that give space to entrepreneurs, as a way of activating space and encouraging place making. You provide low cost space to people that need it and they fill up the ground floors and bring a scheme to life. Most of these projects are short term, but they can be extended, and in the right circumstances provide commercial advantage for developers and also provide a stock of workspace that London needs if it is going to remain innovative and creative.”
Armstrong said that more commercial projects would never account for more than 10% of the Trampery’s activities, partly as a result of its genesis as a social enterprise and his background as a social entrepreneur. He was the last student at Cambridge to be mentored by Lord Young, a Labour Party advisor and the man who invented the term meritocracy (something he meant as a satirical term, that could never in reality be achieved).
“I believe in capitalism, competition and free markets, and their ability to solve social problems and advance economies,” Armstrong said. “I think entrepreneurship is an incredibly important force in society, and we need to look at how we support it in future, as jobs and solutions to our problems won’t come from large corporations.”
So how do you take that ethos and go about building a genuine innovation cluster or community of businesses and entrepreneurs? Start small and work with what you’ve got, Armstrong said.
“There is a sequence of steps that combine a kind of grassroots approach with a high-level strategy,” he said. “You need to do a lot of research about where hot spots for certain types of business already are, what is the sectoral makeup of a particular type of area, and what stage of their growth the companies in a particular area are at. You need to know what businesses you will be able to bring together in great detail. Then to foster that community you have to start with something small: There is no point building something of 100K SF and trying to fill it. When it comes to cluster formation, the ‘build it and they will come’ mentality has never worked. You need to work with what is there and build slowly.
“Once that first stage has got its own energy you can look to expand, and link it to a wider area.”
What made Shoreditch the ideal location for Tech City, for example, was not just the fact that tech startups were present: It was the intersection between tech and other sectors like fashion, art and design, which, while different, feed into and off of each other.
Those looking to create such communities, be it city planners or the owners of individual developments or buildings, need to think in terms of neighbourhoods, no bigger or smaller.
“Every city is now competing to entice businesses, but these things are never evenly distributed around a city,” he said. “The neighbourhood is the tectonic unit of how these things work. When we opened our first facility in Shoreditch it was never about these four walls, it was about Shoreditch, and the role we could play in amplifying what was already happening here.”
In terms of actually bringing people and businesses together, Armstrong’s ideas have an unlikely genesis, a long way from hip Shoreditch.
St Agnes is a tiny island that forms part of the Scilly Isles, a small archipelago about 25 miles off the most southwesterly point of the U.K. It has a population of about 70, and as part of his academic studies Armstrong researched the way information circulated among a small population.
“When a piece of information arrived on the island, the six people for whom it was relevant would hear it very quickly, everyone else more slowly. A complex kind of filtering happened and you could study how that worked. It gave me a good grounding for everything we’ve been doing at the Trampery.”
Of course, there is a built-in problem with what Armstrong and the Trampery do. If it is too successful and areas become innovation clusters, they attract larger businesses looking to tap into what has been created, and rents go up, pushing out the kind of firms the Trampery targets. Armstrong admits this has happened in Shoreditch: When he started, rents were around 50% below Central London averages — now they are just 10% below.
That led the Trampery to expand beyond its Shoreditch beginnings, to try and find locations where it could offer rents below the rest of Central London. The facilities at Republic, Here East and another in Tottenham all opened this year, and Fish Island Village opens early next year.
While these locations are quite physically dispersed, they all lie close to one of London’s secondaries rivers, the River Lea, and Armstrong argues that this provides a link that will allow them to become part of a wider cluster.
“The river provides a kind of psychogeography that connects these places, and there is a commonality among these communities,” he said. The company is looking at another three locations in areas that “you would not typically associate with an innovation cluster, but that we think have the right characteristics”.
The company is also looking to become involved with more mixed-use projects like Fish Island Village, where Peabody is developing the affordable housing, including a potential 50,000-unit new town, although Armstrong admits that such schemes are inevitably tough. A proportion of the housing at the scheme was supposed to have been earmarked for creative professionals, but recent changes by the Treasury to Housing Association funding rules mean this may not be possible. But, he argues, if such schemes can’t be made to work, then London will become so expensive for small businesses that strategies to create innovation clusters will be almost useless.
“That is going to be the next challenge for London,” he said. “Unless property prices drop then there is a risk that early stage entrepreneurs and creative professionals just won’t be able to function in this city. And that would be a very grave development.”