If you thought the appetite for “landmark” office towers in the City of London had abated, you may want to get down to St Ethelburga’s church on Bishopsgate on Tuesday to see Brookfield Properties’ plans for a new 54-storey, 240 metre skyscraper in the city’s Eastern Cluster.
The proposed replacement for the existing 99 Bishopsgate building, which is open for online consultation too, would offer more than triple current amount of office space and become the fourth tallest tower in the City, joining a high-rise crop of already completed and consented projects: 1 Undershaft, which at 305 metres will rival the Shard, the 295 metre 22 Bishopsgate (pictured), featuring the capital’s highest free viewing platform; the recently-approved 55 Bishopsgate (284 metre), and more.
It’s all about reinventing the city office for the new post-pandemic, hybrid working, environmentally-conscious age – responding, the consultation website says, to the “needs and demands of the future city workforce, with a particular focus on wellness and sustainability”. Think vertical planting, high-level winter gardens and a new public cultural space.
Across the City at Shoe Lane, another new plan to replace a 1970s building ambitiously promises a convention-challenging workplace. The new-look office, according to developers Landsec, will “blur the line between task-based and social activities, with generous external spaces, soft landscaping accessible throughout the building and priority placed on active travel, including a significant focus on the experience of cyclists and runners”.
Not the end of the office then, despite those gloomy mid-pandemic predictions. In fact, more central London occupiers are looking to increase their space rather than reduce it, according to property agents Savills, though it’s not all good news for the capital’s financial and commercial centre, according to recent updates.
Just over half the new office schemes in the pipeline between now and 2027 have yet to start, beset by high construction and financing costs. These are set to result in “further delays and delivery challenges for schemes that are not yet underway”, according to the company.
Leasing activity, while rising, also remains below 2019 levels – and, most significantly, where offices are being let it’s the higher-end space that is being snapped up, accounting for 90 per cent of take-up, says Savills. Vacancy rates are up, at 8.5 per cent overall, more than double the rate at the end of 2019, and 80 per cent of that vacant space is the less desirable “second-hand” stock.
Time to have a serious look at office to residential conversion? Global property firm CBRE certainly thinks so. In a new report it estimates that office space currently standing empty in central London could be converted to provide some 28,000 homes.
Vacant office space should be considered in the wider context of a growing housing crisis across the capital, with the shortfall in new home supply set to rise to more than 150,000 homes for the period between 2012 and 2025, the report says.
Planning applications for new homes were at their lowest ever level in the first half of this year, and only five boroughs – Harrow, Brent, Hammersmith & Fulham, Tower Hamlets and Sutton, plus the City of London – have met or exceeded their London Plan housing targets over the past three years.
Meanwhile several factors are increasing the risk of unlettable office space – second-hand buildings falling short on changing workplace preferences, the new focus on high sustainability credentials and on proposed new energy efficiency standards. More than eight in 10 central London offices do not currently meet those standards, with the cost of upgrading potentially reaching £5 billion.
All this is making conversion more attractive, CBRE says, alongside growing concerns about embodied carbon as starkly demonstrated in Michael Gove’s rejection of M&S plans for its Oxford Street flagship. “The previous strategy of simply demolishing an old office to replace it with a new Grade A building is becoming largely redundant,” the report says.
“London needs more homes and there is undoubtedly a growing amount of office stock that will need to be repurposed. This is creating an ever-greater opportunity to convert these offices to residential use,” it concludes. “Ultimately, more homes could be delivered through converting offices…the potential risk of doing nothing is an increasing number of obsolete office buildings that serve no purpose and become a blight on local areas.”
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An idea whose time has come. All the more important for those inner London Boroughs whose plans to get property developers to cross-subsidise “affordable housing” are collapsing alongside the dreams of town planners and architects as overseas investors evaporate.
Office buildings have to keep reinventing themselves, because the nature of work changes faster than ways of Life. It always has been, always will be.
This chimes with one of the scenarios in the London Society’s recent “London of the Future” book. Kat Hanna envisages an increase in the City of London’s population from 8000 in 2022 to 20,000 in 2040.
Most of the 10,000 new homes are build-to-rent (BtR)- “the result of commercial developers diversifying into residential operations, or, in many instances, partnering with established BtR providers to do so”.
Important backcloth to the City’s flagship Destination City policy aimed at attracting visitors to support an economy hit by working from home. Will it also be a Liveable City?