The Olympic Legacy’s White Elephant Is So Successful It Is Turning Away Tenants
It was supposed to be the most difficult building on the Olympic Park to readapt for commercial use. But Here East has proved the doubters wrong.
The 1.2M SF former Olympic press and broadcasting centre was a difficult prospect to repurpose: It had great digital connectivity, but cavernous open spaces that would be hard to refurbish and fill, and all in a part of London untested as an office location.
Today, the owners of the office scheme now called Here East are so confident about its prospects that they have taken back 145K SF from a data centre occupier in the building because they had found an occupier for a big chunk of that space and are confident they can fill the rest at a higher rent.
The success was achieved by a management team mashing up skills from far outside the property sector with those from one of the sector’s best known names. The team is taking a lot of the buzzwords of modern property — collaboration, tech, clustering and innovation centres — and genuinely putting them into practice.
“People thought this was going to be the white elephant, but we had a vision of what it could be from day one,” Chief Executive Gavin Poole said while roaming the corridors of Here East, showing off empty spaces that would make most property investors and developers turn white with fear.
How would you fancy trying to lease this as office space:
“We weren’t scared, we were excited about what it could be, because we weren’t real estate people, we came from a range of backgrounds,” Poole said. His background is as an RAF aerospace engineer and includes a spell as strategy director for policy think tank the Centre For Social Justice. The Here East management team includes others from the political sphere, the telecoms industry and a legal historian.
That is allied with the property expertise of Delancey, the fund manager run by Jamie Ritblat, which owns Here East and also the site’s innovation centre, Plexal.
Here East is home to 12 tenants across two main buildings, more if the myriad small tenants within the 68K SF Plexal space are taken into account. Those 12 tenants include Ford — whose facility is looking at the future of mobility, Loughborough University, broadcaster BT Sport, a robotics research facility run by UCL, online fashion retailer matchesfashion.com and dance studio Studio Wayne McGregor. As well as the two main buildings there is an events space that can hold up to 1,000 people.
The first vast room pictured above is 80K SF of the space vacated by data centre company Infinity, which now needs to be leased. The remaining 60K SF will be occupied by the Victoria & Albert Museum, which will use it to house its collection of items not on display at its main site in South Kensington. The museum has also committed to building a second facility on the former Olympic Park as part of a wider cultural quarter.
It would have been easier and safer to find another data centre operator to fill the space, and taking the space back drops the overall occupancy rate from close to 80% to around 66%. But Poole said it will pay off in the long term.
“We wouldn’t have taken the data centre space back if it hadn’t have been for the deal with the V&A,” Poole said. “They are a great occupier to have. If it wasn’t for them taking space here then their collection would have had to leave London, and they are the kind of organisation that people want to be near.”
That appeal is already translating to activity around the building.
“We have had a lot of interest in the space already,” Poole said. “What you have to remember is that there is a real shortage of studio space in London for people who need to create content, and this space is ideal for that. Local studios are full to bursting, because of the rise of streaming services and the fact that streaming companies are creating their own content.”
The second large space is 30K SF, and is similar to that occupied by matchesfashion.com, which produces all of its content at Here East, as does Ladbrokes Coral.
Poole said the mix of tenants is always going to be key to making the project a success, and most important of all is helping tenants collaborate. It was always envisioned that the scheme would be focused on the technology sector — its original name was iCity, later dropped for Here East — and so it has played out, with the original vision being strictly adhered to.
“We are not uber selective about our tenants, but if a large corporate came to us and said they wanted to bring their back office accounting function here we would probably decline,” Poole said.
“We always wanted it to be a mix of big global corporates and small startups looking to scale, and give all of them help in undertaking the difficult process of business transformation. We wanted to explore the possibilities of how they can collaborate and explore the intersections between each other. In that sense you have got Ford looking at the future of mobility alongside two universities looking at technology and robotics alongside several data companies.”
Poole said it is no coincidence that in Loughborough and UCL, Here East has two universities as tenants.
“Having education on-site was vital,” he said. “You have one university in UCL focusing on advanced robotics, and Loughborough have aligned their courses with the overall basis of the scheme, focusing on technology and innovation, including a new real estate course. They are high value uses, full of master's and Ph.D. students undertaking advanced research. It creates a great basis for collaboration and businesses wanting to come here.”
A key element of Here East designed to foster this collaboration is Plexal, the innovation centre owned by Delancey and managed by the Here East management team.
“We could have brought in a managed space operator, but we wanted to do it ourselves,” Poole said. It provides coworking space, flexible office space and also accelerator space, all again aimed at the technology and media sector.
Here East recently won a £30M contract from the U.K. government to run a scale-up programme for 72 cybersecurity companies, where beyond office space it provides back-office support through a partnership with Deloitte as well as connections to other similar programmes across the U.K. It provides similar back-office functions like help with contracts or legal services for other Plexal tenants in order to help them grow, and runs a more general U.K. scale-up programme also supported by the U.K. government.
“The cybersecurity programme is a great example, the companies involved have begun working with the auto and data companies we have here, and it is really additive and mutually beneficial. The innovation centre really supports what goes on outside it across the whole scheme,” Poole said.
The most recent example is the creation of the Trampery at the Gantry. The 10K SF gantry framework runs around the edge of one of the buildings which, during the Olympics, housed the machinery which blew cool air into the broadcast centre to cool the machinery used to beam the games around the world.
Now the Trampery, the coworking and social entrepreneurship company with three sites across London, has worked with Here East to create a series of 23 units on the gantry that will be leased to artists and creative companies on flexible leases at low rents. The individual design of each unit nods to the area’s industrial heritage, referencing Stratford’s notorious fridge mountain or local factories like that which made Trebor mints.
Here East’s architect Hawkins Brown worked on the modular design of the units alongside Architecture 00 and WikiHouse and reduced the time taken to create one of the units from three weeks to three days.
“They can be now rolled out in disaster zones to house displaced people,” Poole said. “It’s example of the kind of collaboration we want to foster here.”
Here East is far from an overnight success — it has been six and a half years in the making. And there is still some way to go — more than 300K SF still remains to be leased. But what could have been an Olympic white elephant has instead proved an exemplar of how to take difficult buildings and make them fit for the modern age.