Shortly before the full effects of COVID 19 were felt by households’ businesses around the UK, Merchant Land attended the launch of the ‘Good Growth for Central London’ report, authored by Arup on behalf of the London Property Alliance. The study set out the key risks and opportunities facing London’s Central Activities Zone and Northern Isle of Dogs (CAZ+).
The research found that Central London has the potential to deliver an extra 400,000 jobs, 43,000 homes and £100bn in economic growth by 2041 if civic, business leaders and government adopt the 10-point plan set out to achieve inclusive and sustainable growth. When the research was being put together and even presented in early March the severe impacts of the ongoing pandemic were still to unfold. As this article is being written in early April events are fast moving and commentary is still changing daily. Nevertheless, the substance and principles behind the study are now more important than they were a month ago as we feel elements of the study can be used as a foundation for taking the economy forward and rebuilding ‘business as usual’ not only in the CAZ+ but across London and wider UK area.
The impact of COVID 19 on the UK economy is yet to be fully understood with forecasts on the decline in GDP ranging from 2.6 to 4.5%. Assuming the current lockdown conditions remain in place until the end of May and then begin to gradually lift over summer, many analysts are hopeful of a relatively swift recovery in the first half of 2021 as uncertainties around the pandemic dissipate. Any growth would be welcomed in the current climate.
As an SME developer and landlord to a range of commercial and residential tenants we have an active and ongoing interest in the CAZ+ area. We have 100,000 sq. ft of new office and retail space in the planning pipeline and a portfolio of mixed-use buildings with a range of SME businesses as tenants. Many of our residential tenants either own or work for similar businesses within Central London or study at London’s fantastic (but now closed) universities and colleges.
The ‘Good Growth for Central London’ study set out a 10 point plan for growth – we are highlighting four of these points which we think the SME business community including businesses such as ourselves and the forums we participate in and are supported by (such as BIDS, business forums such as the LCCI) can engage with quickly to assist with the inevitable collective regrouping process that is going to be required post COVID 19. They are:
- Ensure that the case for good growth for the CAZ+ is understood in the context of the rest of the UK’s economy. Recent years have seen a growing gap between London and the rest of the country as there is a perception that it receives more than its fair share of public spending, and that central government’s ‘London- centric’ decisions tend to favour the capital (Centre for London, Think Tank Report 2019). The CAZ+ accommodates one third of London jobs and generates almost 10% of the UK’s output and large tax (fiscal) surpluses that are spent in providing vital public services elsewhere in the country. London plays an important role as a powerful international hub for investment. Prior to the emergence of COVID 19 it was widely recognised that the perception and indeed realities behind it were problematic. Going forward and now more than ever during the rebuilding process of the economy post COVID 19, it will be imperative that the relationship between London and the regions is considered carefully and that the message that good growth in London will lead to greater opportunities for growth in other areas of the country is projected. As an SME we can contribute to this by lobbying the industry bodies that represent us.
- Improve collaboration between a range of CAZ+ stakeholders, including the GLA, Boroughs, BIDs, the construction industry and neighbourhood forums, to respond quickly to emerging disruptive factors. We are seeing first-hand as part of the construction industry, as landowners within the Fitzrovia BID, as landowners in Westminster and City of London, as board members of the newly formed Aldgate BID, as committee members at the LCCI and members of the City Property Association. There has been a marked uptick in fast moving collaboration between various stakeholders to share market intelligence and in some cases even offering their premises to be used by key workers in response to the unprecedented ongoing crisis. Over the coming months, once the virus is contained and business start to resume operations, collaboration between CAZ+ stakeholders will be crucial to ensure that the footfall in these areas is safely re-introduced to help support local business who undoubtedly would have been affected financially and above all restore optimism and vibrancy. As an SME we are able to contribute actively to this by offering to contribute our properties, physical expertise and time to this collaboration.
- Regularly review how the CAZ+ area is performing against a set of Good Growth objectives and targets and highlight successes and opportunities for further improvement. Keeping track of progress is always important on any project as it ensures structure and clear objectives for everyone to follow. The set objectives in the report are still relevant given the current climate and can be converted into good growth recovery led objectives once we start to emerge from the crisis and can act as a barometer in regards to the level of recovery over the next 18 months. Similar objectives can be set within local districts in the CAZ+ for local BIDS and other stakeholders to effectively monitor local progress and need.
- Support policies that are aimed at providing a range of housing tenures to meet various needs and affordability criteria. Long before the ongoing crisis there has been a structural and fundamental problem both with the affordable housing supply and supply of private housing that was affordable in London. It has been widely recognised in recent years that this was leading to many ‘’key workers’’ and working families from a wide range of professional and sector backgrounds to leave London. As far back as 2017 the LCCI published its report ‘’Brown for Blue’’ which highlighted that 54% of front-line ‘blue light’ personnel live outside Greater London, often due to the capital’s high cost of living. In recent weeks the definition of key worker has come to include food workers, care workers, delivery workers, public hygiene workers, cleaners and may more. With typically lower paid roles the experience of COVID 19, should focus the country on the need to provide housing that is affordable for people that are essential to our social infrastructure. In addition to this the importance of quality of life within densely populated cities such as London will be in focus. Development viability is always an issue for SME developers and the impacts of COVID 19 on the construction supply chain are still unquantified. However, it is important that we lobby for polices to be set at a national and local government level to address these problems.
To conclude, writing this in early April 2020 we don’t know how and when the COVID-19 outbreak will end and therefore the scale of the negative economic impact. However we are confident that Central London will remain as one of the world’s most attractive and competitive business locations due to its remarkable pulling power for attracting international investment, high level of skilled workers and most importantly the density, scale and mix of business functions which leads to exceptional levels of productivity. In the mid-term efforts will need to be diverted to recovery as well as the achievable long-term growth that the authors of the Good Growth for Central London report envisaged. SME developers and landlords can play an active role in contributing to and lobbying for some of the actions set out in the 10-point plan both as standalone companies and through the organisations and stakeholder groups they participate in.
For more information on the ‘Good Growth for Central London’ report authored by Arup and to read it in full please visit, https://www.citypropertyassociation.com/insights/good-growth-for-central-london/
1. City Property Association. 2020. GOOD GROWTH FOR CENTRAL LONDON – City Property Association. [online] Available at: https://www.citypropertyassociation.com/insights/good-growth-for-central-london/ 2. Centreforlondon.org. 2019. London, UK: Strengthening Ties Between Capital and Country. [online] Available at: https://www.centreforlondon.org/publication/london-uk-capital-country/ 3. Londonchamber.co.uk. 2017. London Chamber of Commerce and Industry – Brown for Blue – Land to House London’s Emergency Workers. [online] Available at: https://www.londonchamber.co.uk/news/lcci-updates/brown-for-blue-land-to-house-london’s-emergency/