FOCUS on the UK by RX REAL ESTATE SHOWS

March 2011

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Focus on the UK MIPIM Special Edition

A N

www.mipim.com

Power to the Provinces

Capital of capital

Regional cities reap rewards of past investment

Why London is still investors' city of choice

Inside, page 25

Inside, page 12

O F F I C I A L

M I P I M

WINNING WAYS â&#x2013; Games over: Legacy plans

reveal more than one route to Olympic success

â&#x2013; Expertise exported: Why UK

architects find favour abroad

P U B L I C A T I O N

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WHAT’S UP? WHAT’S DOWN? WHAT’S NEXT?

Investing in property? Make sure your next step takes you where you want to go. Visit stand R31.13 www.cbre.eu

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••• EDITORIAL

Dear Friends, Filippo Rean

It is a pleasure to pay tribute to the British property industry by welcoming the UK as the MIPIM 2011 Country Of Honour. This is in recognition of the contribution that British companies have made to the global real-estate market since MIPIM was launched in 1990. The UK has played a vital role in the creation of cross-border investment and the real-estate sector becoming truly international. This is a critical time in the global economic recovery and it is widely acknowledged that the commercial property sector remains a crucial factor in driving current economic momentum, as well as shaping the UK’s future economic success. It has been a tough few years, but the UK has succeeded in retaining its role and influence on the global stage, while London remains Europe’s largest financial centre, continuing to command record rents and commissioning some world-class real-estate projects. In terms of cross-regional investment activity, the UK has remained an attractive and competitive proposition from boom through to the recovery, and is currently leading the way in Europe. Over the years, the UK has also had a key role in shaping the regeneration movement, and has had a major architectural influence on some of the world’s most significant projects. It is therefore a pleasure to officially recognise UK property professionals for their contribution to the global real-estate market, where collectively they have played an important part. We encourage all UK participants attending MIPIM to exploit the additional attention that the Country Of Honour distinction will bring this year. We hope too that MIPIM 2011 will serve as Britain’s real-estate showcase to the world, and will help ensure that the UK remains highly visible, this year and beyond. Of course, the story does not end with the 2011 Country Of Honour accolade. The London Olympics represent a once-in-a-lifetime platform to showcase the best of Britain, while also providing a compelling global event that will be a guaranteed tonic for us all. We wish UK delegates — and indeed everyone who attends the event — a successful MIPIM and hope you find this special UK supplement an informative read.

Best regards Filippo Rean MIPIM & MIPIM Asia Director

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••• CONTENTS

NEWS

FEATURES

Development in the spotlight

Prime streets still paved with gold

Europe's tallest commercial building takes shape. Page 8

No city in the world does prime real estate like London — or charge more for it. But can the UK capital keep up the pace?

What have the British ever done for us?

They say the UK has a great future behind it in terms of its influence on world events. But there is one area where the Brits still lead the way — the setting of internationally recognised standards

Life after the Olympics

It’s not just the world’s top athletes that are aiming for gold at the 2012 London Olympics — the world’s top investors are also hoping to score from the UK capital’s Olympic legacy

Power to the provinces

A great deal of public money has been spent on the UK’s A-list cities in recent years, some of it wisely, some of it arguably not. We assess its impact on corporate relocation and inward investment

Focus on the UK MIPIM Special Edition

Rebuilding momentum

March 2011

Editorial Department Editor in Chief: Paul Strohm — Technical Editor in Chief: Herve Traisnel — Deputy Technical Editor in Chief: Frederic Beauseigneur — Graphic Designer: Carole Peres — Sub Editor: Joanna Stephens — Proof Reader: Debbie Lincoln — Contributors: Chris Bown, Steve Killick, Steve McCormack, Doug Morrison, Paul Norman, Graham Parker — Editorial Management: Boutique Editions

Printed on 100% recycled paper

www.mipim.com

Urban regeneration in the UK is undergoing a period of seismic change, with economic and political factors forcing developers and local authorities to reappraise their approach

Director of Publications: Paul Zilk

Production Department Content Director: Jean-Marc Andre — Publications Production and Development Manager: Martin Screpel — Publishing Product Manager: Chealsy Choquette — Publishing Coordinators: Emilie Lambert, Amrane Lamiri, David Le Chapelain, Bruno Piauger — Production Assistant: Veronica Pirim — Production Assistant, Cannes Office: Eric Laurent — Printer: Riccobono Imprimeurs, Le Muy (France).

A world of satisfied customers

UK architecture firms of all sizes are finding success on the international stage, working on flagship projects from Abu Dhabi to Amsterdam. We look at the influence of UK architects on the world’s built environment Regeneration potential. Page 29

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ADVERTISING FEATURE

Leeds INVESTMENT CAPITAL ,EEDS IS ONE OF THE 5+ AND %UROPE S LEADING LOCATIONS FOR BUSINESS AND CONTINUES TO BE TRANSFORMED BY MASSIVE LEVELS OF INVESTMENT 4RINITY ,EEDS THE a MILLION RETAIL AND LEISURE DEVELOPMENT IS THE lRST LARGE SCALE DEVELOPMENT OF ITS KIND TO GET UNDERWAY IN THE 5+ SINCE THE RECESSION ,OCATED IN THE CENTRE OF ,EEDS THE SCHEME IS DUE TO OPEN IN SPRING AND IS ALREADY TWO THIRDS PRE LET ,AND 3ECURITIES EXPECTS THE MILLION SQ FT SCHEME LOCATED IN THE CENTRE OF ,EEDS TO BE THE MOST PROlTABLE DEVELOPMENT IT UNDERTAKES IN THE CURRENT CYCLE -EANWHILE LEADING %UROPEAN RETAIL DEVELOPER (AMMERSON HAS SUBMITTED NEW PROPOSALS FOR ITS %ASTGATE 1UARTERS DEVELOPMENT 4HE TWO SCHEMES WILL TOGETHER TRANSFORM THE ,EEDS RETAIL OFFER PROPELLING THE CITY UP THE 5+ RETAIL RANKINGS AND PROVIDING A MAJOR BOOST FOR THE ,EEDS ECONOMY

4HE ,EEDS OFlCE MARKET IS IDEALLY POSITIONED TO ATTRACT COMPANIES RELOCATING CONSOLIDATING OR EXPANDING THEIR OPERATIONS IN THE .ORTH OF %NGLAND 4HE CITY S OFlCE MARKET HAS AGAIN BEEN NAMED NUMBER ONE IN %UROPE FOR VALUE FOR MONEY AND IS SET TO BENElT FROM MAJOR INVESTMENTS BY DEVELOPERS -%0# -UNROE + AND "RUNTWOOD #ITY CENTRE DEVELOPMENTS NEW TO THE MARKET INCLUDE 4HE -INT AND .O ,EEDS BOTH "2%%!- @%XCELLENT RATED DEVELOPMENTS TOGETHER WITH GRADE ! REFURBISHED OFlCE DEVELOPMENTS AT "ROAD 'ATE 4ORONTO 3QUARE AND 3OUTH 0ARADE 4HESE ARE LARGE mOOR PLATE DEVELOPMENTS IDEAL FOR CORPORATE OCCUPIERS AND REGIONAL HEADQUARTERS ,EEDS IS ALSO INVESTING HEAVILY IN ITS CULTURAL INFRASTRUCTURE TO ENHANCE THE QUALITY OF LIFE RESIDENTS ENJOY AND STIMULATE FURTHER INVESTMENT AND DEVELOPMENT IN THE CITY CENTRE

Leeds did you know?

4HE NEW ,EEDS !RENA SCHEDULED TO OPEN IN SPRING WILL ACT AS A CATALYST FOR THE REGENERATION OF THE CITY S NORTHERN QUARTER )T WILL ALSO OPEN UP DEVELOPMENT OPPORTUNITIES ON SITES IN THE SURROUNDING AREA AND ON THE SITE OF THE ARENA ITSELF WHERE THERE ARE TWO POTENTIAL SITES FOR HOTEL OR RELATED LEISURE USES

“

) FULLY EXPECT THE ,EEDS !RENA TO BE ONE OF THE TOP TEN VENUES IN THE WORLD WITHIN THREE YEARS OF OPENING 4HE ECONOMIC BENElTS OF THE ARENA WILL BE FELT RIGHT ACROSS THE CITY AND WILL MAKE THE CASE FOR INVESTING AND DOING BUSINESS IN ,EEDS EVEN MORE COMPELLING

”

John Sutherland, senior vice president, SMG (Europe)

4HE CAPACITY CONCERT AND ENTERTAINMENT VENUE WILL PROVIDE A SIGNIlCANT BOOST FOR THE CITY S NATIONAL AND INTERNATIONAL PROlLE AND BRING MAJOR BENElTS TO THE ECONOMY OF ,EEDS AND THE WIDER CITY REGION

s /VER THE LAST TEN YEARS a BILLION WORTH OF MAJOR PROPERTY DEVELOPMENTS HAVE BEEN COMPLETED IN ,EEDS 0ROJECTS WORTH A FURTHER a BILLION ARE CURRENTLY UNDER CONSTRUCTION AND IN THE DEVELOPMENT PIPELINE s 4HE #ENTRE FOR #ITIES HAS IDENTIlED ,EEDS AS ONE OF lVE 5+ CITIES BEST PLACED TO ENJOY A PRIVATE SECTOR LED RECOVERY IN s 4HE ,EEDS OFlCE MARKET HAS BEEN NAMED NUMBER ONE IN %UROPE FOR VALUE FOR MONEY IN THE %UROPEAN #ITIES -ONITOR PUBLISHED BY #USHMAN 7AKElELD s 3-' %UROPE THE OPERATOR OF THE ,EEDS !RENA IS THE LARGEST OPERATOR OF SPORTS AND ENTERTAINMENT VENUES IN %UROPE s ,EEDS -ETROPOLITAN 5NIVERSITY S "ROADCASTING 0LACE DESIGNED BY &IELDEN #LEGG "RADLEY 3TUDIOS HAS BEEN NAMED BEST TALL BUILDING IN THE WORLD BY THE #OUNCIL ON 4ALL "UILDINGS AND 5RBAN (ABITAT

WWW locateinleeds CO UK

UK supplement Leeds ad indd 1

“

7E HAVE SEEN A BUILDING OF MOMENTUM WITH THE LEVEL OF SECURED LETTINGS DEMONSTRATING THE CONlDENCE IN ,EEDS AS A DESTINATION AND IN THE 4RINITY ,EEDS PROJECT WHICH IS THE lRST MAJOR DEVELOPMENT SCHEME OUTSIDE ,ONDON TO GO LIVE AND WILL TAKE ,EEDS TO FOURTH IN THE 5+ RETAIL HIERARCHY

Francis Salway, chief executive, Land Securities

”

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••• NEWS

Cherry Orchard Road is ripe CROYDON’s Cherry Orchard Road scheme is among the projects being showcased on the London stand. The landmark mixed-use development will provide around 93,000 sq m of office, retail and residential space, and will regenerate a significant area of Croydon, including East Croydon rail station. Developer Menta has appointed MAKE architects and GL Hearn to work up the plans.

First street first REGENERATION of Manchester’s First Street area is one of the main focuses on the Manchester stand, according to the Manchester At MIPIM Partnership. Ask Developments, Manchester City Council and Morgan Stanley Real Estate have teamed up to create First Street, a 8-ha area of the city which will provide 279,000 sq m of offices, retailing and leisure. The 16,722 sq m Number One First Street is slated for development... first. Events on the stand are expected to be popular. Andrew Stokes, chief executive of Marketing Manchester, said: “Last year, our stand events were attended by more than 600 people and were later viewed on YouTube over 8,000 times.”

Birmingham cuts carbon BIRMINGHAM is promoting its expertise in delivering efficient, low-carbon buildings. Councillor Mike Whitby, leader of Birmingham City Council, said: “This week at a variety of events, we are showcasing Birmingham’s low-carbon plans to influential investors and senior decision-makers, where they will be able to meet some of our leading companies.” Willmott Dixon, Argent Group and Carillion are among the private-sector participants featured in Birmingham’s MIPIM events programme.

PPP opportunities ahead as UK moves back into black THE UK is open for business. That is the message that Alex King, cochair of the UK Country Of Honour steering committee, wants to get across during MIPIM this week. “It’s important to let people know that Britain is still active,” he said. “There are significant opportunities for development and investment, and I would expect these opportunities to begin to grow as the government reduces the deficit.” King added that the UK’s role as Olympic host in 2012 could only help as the country moves to the centre of the world stage. As the UK government gets to grips with the national debt, King said there would be new opportunities for investment in the country’s infrastructure. But these openings will necessarily be different to those seen under the previous government and he expected the emergence of new

Kent County Council’s Alex King

variations on the public-private partnership (PPP) arrangements that have gone before. King, who is a Kent County Council cabinet member and a director

of the private/public investment promotion agency Locate In Kent, said that MIPIM is the ideal forum to discuss these ideas and evolve innovative solutions.

Leeds lays groundwork for growth NEIL McLean, newly appointed chair of the Leeds City Region local enterprise partnership (LEP), is leading a delegation of business leaders at MIPIM to explain the

role that the Leeds City Region LEP intends to play in creating a better environment for business and investment. The Leeds City Region LEP was

Neil McLean, chair of the Leeds City Region local enterprise partnership

6 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

one of the first to receive government backing and has submitted a £100m bid to the UK government’s Regional Growth Fund. McLean said that MIPIM “provides an unrivalled opportunity to develop the relationships that are crucial to securing investment and growth for the city region”. Leeds City Region claims that it is the largest English city region outside London, with a £51bn economy that generates 5% of the UK’s GVA. It is home to a resident population of 3 million and over 100,000 businesses, and also boasts one of the largest groupings of research-intensive universities in Europe.

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www.glhearn.com/developmentenabled www .glhearn.com/developmentenabled

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••• NEWS

D E V E LO P M E N T I N T H E S P OT L I G H T

London shapes up to future THE CAPITAL’S CURRENT SPATE OF SPECTACULAR DEVELOPMENTS WILL

Land Securities chose Canary Wharf Group (CWG) to help build its 64,103 sq m “Walkie Talkie” tower — the tapered tower in the foreground. It sold the cleared site at 20 Fenchurch Street, EC3, and some neighbouring shops to a 50:50 partnership formed with Canary for £90.2m. The design of the swirling Kohn Pedersen Fox-designed Pinnacle is shown to the left of the Walkie Talkie.

UNDERLINE ITS STATUS AS A WORLD CITY. LIKE MANY OF ITS INTERNATIONAL RIVALS, LONDON IS AT LAST REACHING UPWARDS AND TALL BUILDINGS ARE THE FLAVOUR OF THE DECADE

The 46-storey Heron Tower at 110 Bishopsgate, will be 230m tall and provide 40,836 sq m of commercial office space. The building is being developed by Heron International and will be completed at the end of the first quarter of 2011.

Sellar Group’s Shard will be 310 metres tall on completion and Europe’s tallest commercial building. The Renzo Piano-designed tower will comprise 55,277 sq m of office space as well as restaurants and bars, a five star hotel and exclusive residences. Sellar Group is developing the building on behalf of London Bridge Quarter Ltd.

8 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

British Land teamed up in October 2010 with Oxford Properties Group — to build its 56,670 sq m “Cheesegrater” tower at 122 Leadenhall Street, EC3.

French bank BNP Paribas’ real-estate arm signed a deal in December with the partners behind the £2bn King’s Central Development, N1, to buy a site for a circa 27,870 sq m office development. The project will be the first development scheme for BNP PRE in London.

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••• NEWS

Manchester’s Spinningfields scheme, developed by Allied London, is transforming a former brownfield site into a vibrant new destination and community. The 427,450 sq m mixed-use development is already home to RBS, Baker Tilly, NatWest, HSBC, Grant Thornton and Deloittes, among others

D E V E LO P M E N T I N T H E S P OT L I G H T

Regional regenerators

Broadcasting Place, Leeds, won the Council on Tall Buildings and Urban Habitat’s Best Tall Building award in 2010, beating off stiff competition from the likes of Dubai's Burj Khalifa. The building, on Woodhouse Lane, was designed by Feilden Clegg Bradley Studios

Belfast’s Titanic Quarter is transforming the city’s 75ha Queen's Island site into a £7bn mix of retail, leisure, hotels, industrial space, educational facilities and a financial services campus of which the first phase is complete. Other completed projects include one of Europe's largest film studios

LARGE AND UNDERUSED BROWNFIELD SITES IN MANY CITIES IN THE UK ARE PROVIDING THE SCOPE TO RETHINK URBAN CENTRES. PICTURED BELOW IS A SAMPLE OF RECENT PROJECTS FROM AROUND THE COUNTRY

Birmingham’s iconic Bullring owned jointly by Hammerson, Henderson Global Investors and Future Fund, has proved a market leader and transformed Birmingham’s city centre. With an internal area of 124,300 sq m, it generates a footfall of almost 40 million a year and an annual rent roll of £16.4m

10 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

Nottingham’s Guildhall site is providing the location for energy company E.ON’s new headquarters, and developer Miller Birch is building a 9,755 sq m nine-storey building for the company with completion planned for early 2012

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Stand number

14.20

B Lisburn

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••• FEATURE

LO N D O N , CA P I TA L O F CA P I TA L

Prime streets of London still paved with gold

British Land’s 201 Bishopsgate and the Broadgate Tower

NO CITY IN THE WORLD DOES PRIME REAL ESTATE LIKE LONDON — OR CHARGE MORE FOR IT. BUT CAN THE UK CAPITAL KEEP UP THE PACE? PAUL NORMAN REPORTS

12 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

N THE face of it, central London’s office markets have spent the last year behaving as if there has been no economic downturn.

According to Cushman & Wakefield (C&W) research, across all sectors London retained its position in 2010 as the largest global property investment market for the second year running, with the turnover of its com-

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••• FEATURE

Prime London real estate is an

extremely rare commodity. This plays well against investor worries about bond and

”

equity markets

Robert Wolstenholme

Alderman Michael Bear, lord mayor of the City of London: “The City offers occupiers flexibility”

Capital & Counties’ Gary Yardley: “Central London is a great place to live and work, with wonderful cultural amenities”

Hines’ Jay Wyper: London ranks “very highly for quality, transparency and stable value for real-estate development and investment”

mercial real estate rising 16% on the previous year. The figures break down to £13.3bn invested or contracted in Greater London, while central London turned over £9.9bn of this. The driving force was the office sector with £8.5bn invested, although the retail sector’s outperformance was equally eyecatching. London’s rivals are trailing by some distance, with Tokyo and Paris back in second and third place with £10bn and £7bn of investment deals respectively. The reasons are not hard to pinpoint. London has traditionally been one of the first places investors look at when spending in Europe. Daniel Van Gelder is a co-founding partner at Exemplar Properties which, alongside Aviva and Kaupthing, is bringing forward one of the capital’s highest profile office-led developments — the three-acre Middlesex Hospital site, W1. Van Gelder says investors are attracted by assets that are both “instantly recognisable” and a “predictable but safe haven”. The global economic downturn has, Van Gelder maintains, underlined these strengths. “The government has intervened in the debt markets and supported the banks,” he says. “Also, the capital lies just outside the eurozone and so is distanced from the difficulties seen in Spain or Ireland, but is close enough to be attached to the strengths of Europe. And then, right at the bottom of the market, the UK had an extremely weak currency market and, suddenly, its best real estate began to look exceptionally good value.” Robert Wolstenholme, executive director at opportunity fund manager Resolution, agrees that uncertain eco-

14 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

nomic and political climates elsewhere have intensified core London’s appeal. “It is a lot more about wealth preservation than wealth creation,” he says. “Prime London real estate is an ex-

CREDIT: © Transport for London 2005

“

tremely rare commodity and this plays well against investor worries about bond and equity markets.” Alderman Michael Bear, lord mayor of the City of London, highlights the depth and dynamism of the capital’s employers, its strength in financial services and the variety of its real estate: “The City offers occupiers flexibility, whether they want 1,000 sq ft (92.90 sq m), 100,000 sq ft or even 1 million sq ft — we can provide it. This, coupled with the fact that London leads the world in insurance, sustainable finance, carbon trading, freight derivatives, public-private partnerships, foreign exchange and more, makes sure the capital remains

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••• FEATURE

“

There is no other

city that offers the variety of history and architectural design, as well the cosmopolitan

Resolution’s Robert Wolstenholme: “We want buildings that are open to a diverse occupier type”

Cushman & Wakefield’s Clive Bull: London has enjoyed prime rent rises of 23.4% since its low point in 2009 compared to 2.1% for global office markets and 1% in Europe

Stephen Greenhalgh, leader of Hammersmith & Fulham council: “The markets are moving west in London, but the state is moving east”

”

mix

Gary Yardley a first choice for domestic and overseas investors looking to be at the epicentre of this activity.” Jay Wyper, UK managing director of US developer Hines, says that, of the 100-plus markets that Hines covers in 17 countries, London ranks “very highly for quality, transparency and stable value for real-estate development and investment”. London’s office-occupier markets have also picked up more quickly than other global centres. C&W’s head of central London investment, Clive Bull, says that London has enjoyed prime rent rises of 23.4% since its low point in 2009. This compares with 2.1% for global office markets and just 1% in Europe, with much of Western Europe yet to see any growth. And in the short-term, this is expected to continue, thanks to a supply squeeze. These factors have notably prompted the leading UK REITs to press the button on central London office towers in expectation of strong demand and a lack of supply in 2013/14. The name of the game has been finding partners to share the risk — a drive that has proved hugely popular with global capital chasing trophy London offices. In October, both Land Securities and British Land (BL) announced 50:50 joint-venture commitments to iconic City towers. Resolution’s Wolstenholme says the joint-venture relationships in part reflect continued caution about an

16 / FO C U S O N T H E U K – M I P I M 2 0 1 1 S P E C I A L E D I T I O N

occupational market where take-up projections are based heavily on lease breaks turning into requirements. “The occupational market has not bounced back quite as well,” Wolstenholme adds. “The second half of 2010 brought more equilibrium, as landlords felt they could see signs of a supply shortage. Demand remains extremely patchy.” Investment wise, most experts are expecting attractive opportunities to continue to come forward as banks work through their loan books and profit-takers look to cash in. C&W is predicting volumes to rise to around £12bn for central London in 2011. Boosting confidence is the sheer depth and variety of cash-rich global players chasing stock. There has been a flurry of major deals in the office sector involving foreign investors aside from LandSec and BL’s tower joint ventures. The question as always remains how far this interest can stretch out from the core areas in Mayfair and the City. Stephen Greenhalgh, leader of Hammersmith & Fulham council, is promoting three vast opportunity areas in the west London borough as what he dubs the “new west Westminster”. Reflecting on the government’s Olympics-driven investment in infrastructure in Stratford, east London, Greenhalgh says: “The markets are moving west in London, but the state is moving east. We are one of the smallest boroughs, but we have three massive opportunity areas at Earls Court, White City and Old Oak Common, and these will become part of the fabric of London.” Gary Yardley, investment director at Capital & Counties (CapCo), the developer working up the 27.5ha Earls Court scheme, says it is inevitable that fringe areas will pick up some of the slack from investor demand in the capital. “We have done a lot of research into why London keeps succeeding,” he adds. “When you step back, there is no other city that offers the variety of history and architectural design, as well the cosmopolitan mix. Clearly, central London is a great place to live and work, with wonder-

ful cultural amenities. When you combine this with the limitations on supply because of restrictions to do with height and listed buildings, it is clear that going forward there is an overflow of demand that places like Covent Garden and Earls Court will be able to meet.” Richard Cable, head of major UK projects at Lend Lease, which is focused on bringing forward major office developments in east London at Stratford and Greenwich, adds that the government’s review of its London property assets could lead to fringe locations benefiting from significant public-sector relocations. There are clearly clouds on the horizon for the office investors and developers are hedging against the possibility of trouble.

“

London is the city

with the best and

most iconic buildings

”

in the world

Michael Bear Resolution’s Wolstenholme says there are particular concerns about what will happen to the economy and the financial-services sector. “The government is trying to regulate the banks and, at the same time, encourage them to lend more money,” he observes. “We are cautious generally about property that is too focused on one part of the economy and, in particular, financial services. We want buildings that are open to a diverse occupier type.” But there are few reasons, as CapCo’s Yardley points out, to think that London’s property markets will not continue to perform strongly over the next 12 months. As Alderman Bear puts it: “London is the city with the best and most iconic buildings in the world and this, coupled with second-to-none resources, ensures it really is the city of choice.”

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••• FEATURE

The Gherkin, 30 St Mary Axe (foreground) is now as synonymous with London as Tower Bridge. Construction has started on British Land’s wedgeshaped 122 Leadenhall Street, CGI shown behind, left

S TA N DA R D P R ACT I C E

What have the British ever done for us? THEY SAY THE UK HAS A GREAT FUTURE BEHIND IT IN TERMS OF ITS INFLUENCE ON WORLD EVENTS. BUT THERE IS ONE AREA WHERE THE BRITS STILL LEAD THE WAY, STEVE KILLICK DISCOVERS — THE SETTING OF INTERNATIONALLY RECOGNISED STANDARDS

“W

HAT have the Romans ever done for us?” asks Reg in Monty Python’s film, The Life Of Brian. Back comes the answer: “Aqueducts, sanitation, roads, medicine, education, wine, public baths, irrigation and keeping order.” A similar, cumulative answer might be the response when asked what has been the British legacy to the property world.

First off, there was the foundation of the Royal Institution of Chartered Surveyors (RICS) after a meeting of 49 surveyors in the Westminster Hotel in London in 1868, with John Clutton, of the eponymous agency, taking the chair. It was just the Institute of Surveyors back then and did not become ‘chartered’ until 1930 or ‘royal’ until 1946. RICS’ impact has been profound. It is now represented or has affiliates in

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146 countries and, with property an increasingly global business, it looks set to continue its expansion — especially throughout Europe, where it has some 8,500 members currently practising. “RICS influence in terms of valuation has been huge,” says Andrew Renshaw, international director and head of valuation at Jones Lang LaSalle (JLL). “The RICS Red Book is very much the bible of valuation standards in the UK and Europe.”

The Red Book sets out the framework within which valuers of both commercial and residential property, along with specialist assets such as rural property, plant, equipment and mineral assets, must work. “The basis of it is to inspire public confidence in the profession,” Renshaw says, adding: “The Red Book is especially important in emerging markets where standards may not necessarily be consistent. Its influence is

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••• FEATURE

growing enormously as markets become ever more global.” So will the Red Book help solve problems in emerging markets, many of which have a Wild West approach to business? “The standards will be set in those countries,” Renshaw says. “But what is most important is the transparency of transactions. The problems that have been seen in, say, Russia are largely to do with lack of transparency and this certainly needs to be addressed, as many property firms, ourselves included, have offices in Moscow. But at least the framework is in place.” The RICS Red Book: “Its influence is growing enormously as markets become ever more global.”

IPD co-founder Ian Cullen

As RICS strives to ensure consistent and best professional practice, one company that is doing its upmost to ensure transparency of transactions is Investment Property Databank (IPD). Set up in 1985 by Ian Cullen and Rupert Nabarro, IPD began to compile data from leading commercial investors, property by property, and before long had created the UK’s first reliable index of commercial-property returns. In the 1990s, IPD rolled out into other markets, starting with a property database in the Netherlands and, by the end of the decade, was well established in Europe and South Africa. Today, the company operates in over 20 countries including the US, Canada, Australia, New Zealand and Japan. Having picked up a Queen’s Award for Enterprise in 2005, IPD now employs over 300 professionals worldwide and, according to spokesman, James Wallace, aims “to supply the property investment industry with the same quality of data that is available to investors in equity and bond markets”. Guy Morrell, director of property research at HSBC Specialist Investments, says: “IPD has transformed how we manage property investment in the

“

The RICS Red Book is the bible of

valuation standards in the UK and Europe

”

Andrew Renshaw

UK, bringing real estate more in line with other asset classes. IPD data is used widely in our investment process, from developing strategies to evaluating historic performance.” But what of the buildings themselves? While IPD continues its expansion, measuring performance for fund managers, insurance and pension companies, and private investment companies around the world, far more these days is being done to ensure that new buildings — that must-have accoutrement for all market leaders — are not doing damage to our already fragile planet. The Building Research Establishment (BRE) was set up over 90 years ago as a government-funded laboratory, meeting for the first time in June 1920. In those days, it was working on the behaviour of reinforced-concrete floors and debating the British Standard for bricks — the UK’s first ever standard for construction materials. In the 1990s, BRE started to split away from the government and was completely privatised in 1997. It is now the BRE Trust, a registered charity, with a mission to support built-environment research for the public benefit. One of BRE’s most successful recent innovations was the launch of the BRE Environmental Assessment Method (BREEAM), which is now a widely used environmental assessment system for commercial buildings. BRE teamed up with IPD, Maastricht university and RICS in creating what was a groundbreaking study that put an economic and financial value on the sustainability of commercial property. BREEAM is now used all over the world, with more than 200,000 buildings certified and over a million more registered for certification. Specific versions of the method are available for different countries. “Investors are changing, with occupiers looking for more environmentally friendly buildings,” says Julie Hirigoyen, international director at JLL and head of sustainability services in England. “They are looking to drive down operational costs in a sustainable way.” But according to Hirigoyen, there is

Jones Lang LaSalle’s Julie Hirigoyen: “We are at a key point where the UK can provide real leadership in the uniformity of standards”

City of London Corporation’s Stuart Fraser: “In the face of challenging economic conditions the City has demonstrated resilience and remains a world leader in international finance”

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••• FEATURE

“

The UK can provide real leadership in

the uniformity of standards. We must

”

continue to forge ahead

Julie Hirigoyen still a long was to go, with France and Italy, for example, far less concerned about sustainability issues than Germany and the Scandinavian territories. “We are at a key point,” she says, “where the UK can provide real leadership in the uniformity of standards. The UK is the market leader in this field thanks to BREEAM and we must continue to forge ahead.”

the face of challenging economic conditions, the City has demonstrated resilience and remains a world leader in international finance.” The good news is that top firms and talent still want to locate in London, which Fraser points out “is home to an unparalleled agglomeration of skills and disciplines. The high-profile projects currently progressing across the Square Mile will add to our property offer and provide new architectural landmarks for the City skyline.” The acid test over the next few years will be whether other UK cities start showing the same sort of confidence that is demonstrated in the capital. History suggests that this is likely to happen — and that the process will throw up yet more innovations that will benefit the rest of the property world. Photo: Courtesy Peter White, BRE

And as for the new buildings themselves, Alderman Michael Bear, lord

mayor of the City of London, waxes lyrical: “London continues to set many standards and I believe our capital leads the way in setting the bar high in innovative architecture and design.” Despite what some conservationists might say about the London skyline, Bear believes that the architecture of the City of London “creates buildings that successfully negotiate the delicate balance of providing the facilities that today’s global businesses require within the City’s medieval street pattern”.

He adds: “In terms of our built environment, we are now comparable to New York and Chicago in the 1950s and 1960s... The Gherkin is now as synonymous with London as Tower Bridge. People are no longer talking about the skyscrapers in the US. With the completion of Lee Polisano’s Heron Tower and British Land’s Leadenhall Building starting on site, to name a few, the focus is now on the City of London.” Bear believes that the last quarter of a century has seen a renaissance in the quality of the City’s buildings. “I very much look forward to seeing the new generation of engineers, designers and project managers take the mantle and push the bar even higher,” he says. And despite the tough economic times, Stuart Fraser, policy chairman at the City of London Corporation, sounds cautiously optimistic when he says: “In

China’s Vice Premier Li with DrPeter Bonfield, chief executive BRE, on a visit to BRE Innovation Park

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••• FEATURE

T H E O LY M P I C L E GACY

Life after the Olympics IT’S NOT JUST THE WORLD’S TOP ATHLETES THAT ARE AIMING FOR GOLD AT THE 2012 LONDON OLYMPICS — THE WORLD’S TOP INVESTORS ARE ALSO HOPING TO SCORE FROM THE UK CAPITAL’S OLYMPIC LEGACY. DOUG MORRISON REPORTS

here is still more than a year to go to the 2012 Games, but the Olympic flame already burns brightly over east London, casting the area’s residential and commercial property markets in a healthy light as far as international investors are concerned. While controversial proposals to turn the Olympic Stadium over to Premiership football club West Ham United after the Games have hogged the UK headlines it is the fate of more prosaic legacy issues, such as housing supply, that has captured the imagination abroad. Overseas investors from as far afield as the Middle East, Asia and the US have ended up on the shortlist for the purchase and long-term management of the athletes’ village. The likes of Qatari Diar, LeFrak Organisation and Hutchison Whampoa are vying with such UK residential investment stalwarts as Dorrington, Grainger and Wellcome Trust. The village includes 1,439 apartments and development land for a further 2,500 new homes, making it the biggest residential sale of its kind in the UK. If the selling agency, the Olympic Delivery Authority (ODA), raises its targeted £500m for the assets, it will also represent a remarkable change of fortune for the project. It was only in May 2009 that a funding package from Lend Lease, the ODA’s original private-sector partner at the village, succumbed to the credit crunch. Since then, the ODA — or in other words, the UK taxpayer — has borne the construction risk. However, the village has emerged on track for

its initial, athlete-ready completion in autumn 2011, which coincides with the opening of Westfield’s adjacent shopping and leisure complex. Westfield is a seasoned player in UK retail but, nevertheless, the Australian developer takes the ‘early mover’ gold medal for embarking on a 176,500 sq m project when many others would have walked away. And all of a sudden the perception of the village shifted from a 2012 Games facility — costing £1.09bn to build — to an investment prospect of some promise, sitting next to what will be one of Europe’s largest shopping malls. The mall is already over 75% let. In addition, Westfield has reached agreement with Intercontinental Hotels Group to build a 188-room hotel and 162 serviced apartments, while it is pushing ahead with plans for a 267room Premier Inn and 12,077 sq m of speculative offices. The payback for Westfield came last year with the sale of a 50% stake in the complex to fund manager Henderson Global Investors for £750m. Another key endorsement of east London came last July when Inter Ikea, the investment arm of the Swedish furniture giant, acquired 5.2 ha of former industrial land at Sugar House Lane on the Olympic fringe. Plans include offices, warehouses and 1,500 homes. One of the many public-sector agencies claiming credit for Inter Ikea’s arrival in east London is the London Thames Gateway Development Corporation, which says it has attracted £1bn of inward investment since 2005. Property consultant CB Richard Ellis (CBRE), meanwhile, calculates that,

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since 2007, 33,445 sq m of offices, 6,503 sq m of shops and 2,700 homes have been developed across Stratford, Canary Wharf, Greenwich Peninsula and the Royal Docks. In that time too, however, the outer reaches of the so-called Thames Gateway region have been slow to recover from the recession. Most of the inward-investment effort is now directed at the area around the Olympic site in Stratford, rather than Essex and north Kent, or even the Royal Docks at the eastern end of London Docklands. Yet CBRE hails the Inter Ikea deal as a sign of the gathering Olympic momentum that is starting to shift the international focus from west to east London. Matt Black, head of CBRE’s east London team, says: “If you look at the infrastructure, the expenditure and the general improvement in east London over the last five years, which is being accelerated by the Olympics… it has certainly put an international spotlight on an area that was previously forgotten.” With Inter Ikea and the Westfield centre taking shape physically and

financially, it is small wonder that global investors have emerged for the athletes’ village. There is credence now to the claim from the Olympic agencies that the village lies at the heart of “a new city for east London”. Only time will tell. But at least with the winning bidder due to be named for the village this summer, the investment community

CBRE’s Matt Black:“The infrastructure, the expenditure and the general improvement in east London over the last five years...has certainly put an international spotlight on an area that was previously forgotten”

“

Business,

creativity and innovation will be

”

the themes

Baroness Ford

Baroness Ford, chair of the Olympic Park Legacy Company: “The park could provide between 8,000 and 10,000 jobs over the long term, in addition to 8,500 jobs in Westfield Stratford City shopping centre”

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••• FEATURE

Legacy issues such as housing supply have captured the imagination abroad

the amount of new housing potentially flooding the market. But Andrew Wiseman, chief executive of leading east London housebuilder Telford Homes, reckons the fears have been overdone. He points to “a massive shortfall of homes” for the foreseeable future, allied to “unrivalled transport connections” — which is why the likes of Telford have had little trouble finding overseas as well as UK buyers. “The Olympics have helped thrust east London into the spotlight over the last couple of years and the area is now the focus of international attention,” Wiseman says. “This has naturally created interest in potential investment opportunities, particularly from Asian investors, who have a long heritage of investing in London residential schemes.” Baroness Ford acknowledges the economic challenges ahead. But she says: “Our housing strategy has taken into consideration the number of high-

density developments already being planned for the local area, the current state of the housing market, the positive response by developers and, importantly, the desire of local people who will want to live, work and bring up families in the area.” If the Olympic Park Legacy Company has got its strategy right, then east London will be on the world invest-

ment map in its own right. A recent study by economic forecasting consultancy Oxford Economics says that, though future wealth generation cannot be taken for granted, a fully generated east London could contribute an additional £21bn a year to the capital’s economic wealth. With so much at stake, all eyes will be on the area way beyond 2012.

QUEEN ELIZABETH OLYMPIC PARK: THE NUMBERS The location: • Over four million people within a 45-minute drive time • 27.2 million annual footfall through Stratford Regional Station • Five major universities within five miles, with more than 83,000 students • 176,515 sq m of state-of-the art retail and leisure space • £17bn invested in transport improvements in the lead up to the Olympic Games • All of London’s major railway terminals within 35’ travel • Less than three hours journey time to Paris • 20 minutes to London City Airport and one hour to Heathrow

“

The Olympics have thrust east London

into the spotlight and the area is now the

”

focus of international attention

Andrew Wiseman

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The park: • Five world-class permanent sporting venues • 22 miles of new cycle paths and footpaths • Nine miles of new roads • New areas of open space within the whole park • Four miles of improved waterways

Source: Olympic Park Legacy Company

will learn if the ODA has got it right with its £500m price tag — roughly the anticipated amount of sales of the 1,439 flats after their conversion from athletes’ accommodation to conventional apartments in 2014. There is already the comfort of £270m from last year’s sale of 1,379 lower value flats in the village — earmarked for affordable housing — to a consortium called Triathlon Homes. The big unknown is the value of the development land, which is the long-term element of the sale. However, the bidders for the village can see that it is one part of a carefully planned mixed-use development strategy by the Olympic Park Legacy Company for the land in and around the recently named Queen Elizabeth Olympic Park. The ‘South Plaza’, for instance, will be an area of the park devoted to entertainment and residential. “We anticipate that the park could provide between 8,000 and 10,000 jobs over the long term, in addition to 8,500 jobs in Westfield Stratford City shopping centre when it opens in 2011,” says Baroness Ford, chair of the Olympic Park Legacy Company, which is now the main coordinating body for future investment. Ford says that “business, creativity and innovation will be the running themes” for the future use of such Olympic facilities as the Press Centre. From here to the City of London, there are plans to create a UK ‘Silicon Valley’. Ford adds: “There will also be opportunities linked to the Park’s venues and 101 ha of open spaces, as the area becomes a leading visitor destination.” All of this sounds good but, in a still fragile economy, nothing is guaranteed. Concerns are regularly aired over

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••• FEATURE

I M P R OV I N G C I T I E S

Power to the provinces A GREAT DEAL OF PUBLIC MONEY HAS BEEN SPENT ON THE UK’S A-LIST CITIES IN RECENT YEARS, SOME OF IT WISELY, SOME OF IT ARGUABLY NOT. CHRIS BOWN ASSESSES ITS IMPACT ON CORPORATE RELOCATION AND INWARD INVESTMENT

HILE the new British government is working hard to cut back public spending, there can be no doubt that the UK’s cities have benefited from a commitment to large-scale projects over the last decade. This policy transformed many, placing them in a strong position in terms of corporate relocation and inward investment. Aside from the local skills base, many occupiers put a high priority on good international air links. And in deciding not to allow further runway expansion at Heathrow airport, the new government has handed a huge opportunity to cities outside London. In response, regional city airports are pressing ahead with improvements, in an effort to position themselves as the solution to the ‘Heathrow problem'. Birmingham's airport has room to grow, and its ambitious plans include a runway extension. Moreover, £13m has been spent on terminal upgrades and the airport intends to double its current 10 million passengers a year. “The development will attract new carriers wanting to fly direct to the world's growing economies, such as China and India,” says airport CEO Paul Kehoe. Manchester airport is controlled by a consortium of local authorities and is the busiest outside the London region, offering direct flights to 220 destinations. Emirates now operates a daily

Trinity Leeds: Land Securities’ 100,000 sq m retail development

Airbus A380 flight out of Manchester to Dubai, while a fourth daily scheduled flight to New York is about to start. “We are lucky in that we have very strong civic leadership and there is a strong sense of partnership,” says Manchester airport’s managing director, Andrew Harrison. He adds that his airport works closely with airlines to deliver the international links that local businesses need. “It's a very symbiotic relationship,” he says.

At Leeds Bradford airport, private equity owners Bridgepoint have committed £28m to an expansion and upgrade of an airport that saw 11% passenger growth in the last year and now serves 76 destinations. Birmingham is also making much of its proximity to the capital, which is just an 80-minute journey away — or less when proposed rail improvements take place. Last year saw the launch of

the Big City Plan, a template for the next 20 years of development in the city, which gives developers and occupiers a steer on how 800 ha of urban space will be developed, along with Birmingham’s key infrastructure aspirations. Improvements are already taking place, with a £600m private-public project to transform Birmingham’s central New Street railway station under way. The last decade has seen the

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••• FEATURE

Bullring retail centre transformed, and developer Argent carry through its Brindleyplace mixed-use scheme. Having shrugged off the demise of vehicle manufacturing in its region, Birmingham is setting out its stall as destination for entrepreneurs, and boasts a high quality of life for those living and working in its vicinity. At the heart of the country’s motorway network, it is also a convenient location from which to reach UK consumers. Among new arrivals in Birmingham are Deutsche Bank, which has opened a support office in the city, and Microsoft’s Rare Games, which is opening a new facility in Fazeley Studios.

“

We are lucky in that we have very strong

civic leadership and there is a strong sense of partnership

”

Andrew Harrison

Manchester's recent transformation is an illustration of how to turn adversity into advantage. The 1996 IRA bomb blast that tore through the city centre was followed by a swift commitment to rebuild something bigger and better. Meanwhile, the city's successful bid to host the Commonwealth Games in 2002 was used as a catalyst

for the regeneration of an area east of the city centre. Manchester’s Metrolink tram system, which opened in 1992, has three lines linking the city’s suburbs to its centre. In 2009, a £1.5bn fund was established by local authorities to further expand the Metrolink, which currently carries 20 million passengers a year.

Wellington Place, Leeds epitomises the city’s appeal to major incoming employers

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The aim is to cut congestion substantially, with tram use displacing five million car journeys a year. The Spinningfields business district is the fruit of a public-private initiative by developer Allied London and Manchester City Council. A 8.9 ha site immediately to the west of the city centre, Spinningfields’ transformation over the last 10 years has delivered 427,354 sq m of commercial space. The district features trophy architecture, and major public buildings alongside international-standard office space. Among the A-list banking and professional-services occupiers that have been attracted to Spinningfields are RBS, HSBC and BNY Mellon.

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••• FEATURE

Revitalised - Birmingham's vibrant city centre

The UK's national broadcaster, the BBC, provided a further boost to Manchester’s economy with its decision in 2006 to move a substantial part of its operations to the city. Under pressure to become less focused on London, the BBC committed to MediaCityUK, a £650m development alongside Salford Docks, moving not just local staff but also major production departments from London. The first phases of the media hub are now opening up and drawing in other TV and broadcast businesses, creating a national centre of expertise. The strength of Leeds lies in its financial, legal and professional services, which comprise the largest cluster outside of London and help to generate a wealth that is evident in the style of the city's retail offer.

In summer 2010, developer Land Securities showed confidence in the city by starting work on its 100,000 sq m Trinity Leeds retail development. With retailers committed to almost half the 120 shops in the £350m scheme, work has begun towards a completion date of spring 2013. Leeds also boasts a value tag on its office stock, offering high specification space and room to grow . MEPC's 241,500-sq m Wellington Place epitomises the city’s appeal to major incoming employers. For investors, there are interesting development opportunities immediately south of the city centre, where the Carlsberg Tetley brewery is scheduled to close this year, releasing a 8.9 ha site, alongside other adjacent postindustrial sites, for development. Public investment includes a new

13,500-seat arena, which is scheduled to open in 2012 and will be operated by SMG Europe. And there are hopes that a new high-speed rail line could open in 2017, cutting travel time to London dramatically. Across the water in Northern Ireland, Belfast is distancing itself from the financial problems of its southern neighbours, pointing to a decade of investment as it puts its troubled history behind it. From the days when it was in the headlines for all the wrong reasons, Belfast now offers investors a young population of one of the most highly qualified workforces in Europe, in a dramatically improved environment. Leading Belfast’s into its post-industrial future is the Titanic Quarter, an ambitious development of 75 ha of

former shipyards. Europe's largest waterside regeneration, it is expected to create 25,000 jobs. The site is already home to 400 people, a new campus for Belfast Metropolitan College, a new Public Record Office and a hotel. A visitor attraction will tell the story of the former shipyard and its most famous output, RMS Titanic.

Offices in City Tower have a commanding view of the Manchester skyline

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Trinity Walk, Wakefield, where after a pause, work has recently recommenced

••• FEATURE

R E G E N E R AT I O N

Rebuilding momentum URBAN REGENERATION IN THE UK IS UNDERGOING A PERIOD OF SEISMIC CHANGE, WITH ECONOMIC AND POLITICAL FACTORS FORCING DEVELOPERS AND LOCAL AUTHORITIES TO REAPPRAISE THEIR APPROACH. GRAHAM PARKER REPORTS

he recent downturn has all but brought regeneration activity to a halt in the UK. The collapse in residential property values and in retailers' demand for new stores has undermined the twin pillars of most regeneration schemes, which tend to be dominated by residential and retail uses.

Work on a number of projects ground to a halt mid-way through construction and others that had not yet started on site have been postponed indefinitely. However some, such as Trinity Walk in Wakefield, West Yorkshire have been restarted. Mark Wesley, lead partner in Ernst & Young's real-estate advisory practice, puts it in context: “As recently as four or

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••• FEATURE

Edinburgh – where TIFs are being used to enable projects

five years ago, there was a big push by local authorities to drive regeneration in cities across the UK. Schemes tended to combine commercial uses with a big residential element, and it was the residential that made it work. Any scheme that hasn't started now needs reapprais-

ing. If the residential isn't viable then the whole scheme no longer stacks up.” Other financial factors are also combining to prevent regeneration projects resuming, according to Wesley. Banks have changed their lending terms with much more stringent loan-

Nathaniel Lichfield and Partners’ Jim Fennell: "This move from big government to big society should begin with lifting the burden from developers and empowering communities to do things their way”

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to-value ratios. At the same time, they are demanding a much higher level of pre-letting on the commercial elements before they will advance development funding. “For developers, it's a perfect storm,” Wesley says. To add to the uncertainly, just as the UK began to move out of recession in mid-2010, the country’s long-standing Labour government was replaced by a Conservative/Liberal coalition. The incoming administration promised a radical shake-up of the planning system to devolve decision-making power to local communities. And it moved almost immediately to abolish the regional development agencies that had previously played a key role in promoting regeneration in some of the UK's more deprived areas. The doubt surrounding the new government's intentions for urban regeneration only served as another brake on activity. Now, however, the situation is becoming clearer with the publication of the Localism Bill. Introducing the bill, Eric Pickles, secretary of state for communities and local government, said: "For far too long, local people have had too little say over a planning system that has imposed bureaucratic decisions by distant officials in Whitehall and the town hall. We need to change things so there is more people-planning and less politician-planning; so there is more direct democracy and less bureaucracy in the system.”

“

For developers, it's a perfect

”

storm

Mark Wesley But what will this mean in practice? Although it is presented as a move to promote development, will the Localism Bill actually provide new ammunition to those who want to prevent it? Independent planning consultancy DPP fears that this will be the case and warns that the Bill is likely to present big challenges for developers, retailers and local authorities, while failing to deliver the expectations of local communities. DPP partner Bob Robinson says: “There is a danger that those more articulate and better educated interests within communities — for example, incomers to rural communities who perhaps want the village to stay the same as it is — will carry more weight in planning decisions. The losers are likely to be those less well-educated and less articulate communities that currently struggle to have their voice heard. There is a danger that the Localism Bill’s ‘Big Society’ agenda will continue to favour those with a big voice.” The government puts a different spin on matters, however, pointing out that

regen-p25-26-27+D+F_Mise en page 1 02/03/11 12:00 Page26

“

There’s a danger that the Localism Bill’s

‘Big Society’ agenda will favour those with a big voice

developers will be given the green light to build "whatever, wherever and whenever" they want if communities fail to put growth at the centre of their local plans. MP for Henley John Howell, says councils that failed to plan for new development would be assumed to have a completely permissive planning system. "I think that is an extremely good incentive for councils," he adds. "When we have got waiting lists for housing and a community that doesn't want to build anything — that does not meet the sustainability test." Liz Peace, chief executive of the developers' lobby group the British Property Federation (BPF), welcomes the clarification. “The property industry’s greatest fear was that the localism agenda would lead to greater ‘nimbyism’,” she points out. And Jim Fennell, managing director of planning consultancy Nathaniel Lich-

”

Bob Robinson

field and Partners, urges developers to embrace the new process. "This move from big government to big society should begin with lifting the burden from developers and empowering communities to do things their way,” he says. He also suggests that developers should look "for councils and neighbourhoods that are open for business". Equally, the British Council of Shopping Centres (BCSC) has welcomed the new approach, which it hopes will help facilitate retail-led development and increase the engagement of business leaders in local decision-making processes. But the BCSC raises concerns about the ability of council planning and regeneration departments to cope with the pace of change brought about by these new powers. It points out that publicspending cuts could result in fewer planning officers, causing delays to planning applications and thereby stifling

DPP’s Bob Robinson: “There is a danger that those more articulate and better educated interests within communities will carry more weight in planning decisions”

the industry’s ability to provide privatesector growth across the country. BCSC executive director, Edward Cooke, says: “The focus on neighbourhood plans and local decision-making should in principle encourage communities to attract investment and development that is fit for purpose. However, we must acknowledge that it could also facilitate an increase in opposition to new development. Devolving greater powers to local authorities may also result in different rules and procedures around the country, creating inconsistency for the development process.” And Cooke points out that fiscal measures could have a large role to

play in promoting regeneration by allowing local councils to discount property taxes. The BCSC has also been a long-term proponent of a system called Tax Increment Financing (TIF), which it believes could kick-start a number of stalled retail-led development schemes. TIF allows local authorities to borrow against the future tax revenues that would be derived from new developments, in order to invest in the infrastructure necessary for the development to take place. The model has already been embraced by the devolved Scottish government, which is using it to enable schemes in Edinburgh and Glasgow to go ahead.

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••• FEATURE

UK ARCHITECTURE ON THE GLOBAL STAGE

A world of satisfied customers UK ARCHITECTURE FIRMS OF ALL SIZES ARE FINDING SUCCESS ON THE INTERNATIONAL STAGE, WORKING ON FLAGSHIP PROJECTS FROM ABU DHABI TO AMSTERDAM. STEVE MCCORMACK LOOKS AT THEIR INFLUENCE ON THE WORLD’S BUILT ENVIRONMENT

The Benoy-designed ION Orchard in Singapore – the firm moved into Asian markets about 10 years ago

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K ARCHITECTS are not just responsible for Britain’s changing landscape. Today, the UK — and particularly London — is seen as one of the world’s leading centres of architectural expertise and the location of choice for international clients seeking excellence in urban design and architecture. Big-name UK brands are well known for their work on high-profile international projects. But many architects, including specialist firms, are now looking beyond the domestic market to maintain and grow their business. Among the vanguard of UK architects to move seriously into the export arena is Foster + Partners, which has worked on a string of landmark projects, beginning with the Hongkong and Shanghai Bank headquarters in Hong Kong, completed in the mid1980s. Among the slew of overseas schemes that the practice has won over the following decades is Chek Lap Kok airport, again in Hong Kong, the Reichstag parliament building in Berlin and the Millau Viaduct in France. More recently, last year’s MIPIM saw the unveiling of Foster + Partners’ plans for Hermitage Plaza, a new community to the east of La Defense in Paris. According to the 2010 survey carried out by the UK professional publication, The Architects’ Journal, 14 of the top 100 firms surveyed have 100 or more architects working overseas. The largest markets are still Europe and the Middle East, which account for almost 60% of overseas business. However, UK practices are moving into other areas, from Africa, central and South America to Russia, Eastern Europe, India and China. UK architectural talent is in demand across the spectrum of developments, from urban regeneration, transport infrastructure, sporting venues, residential and office architecture to the design of landmark structures such as hospitals, museums and government buildings. UK firms are also renowned for their creativity and innovation, pioneering the development of sustainability in the design of low-car-

bon, energy-efficient buildings and other green technologies. So what are the factors that underpin this success? Chris Lanksbury, Chapman Taylor main board director in charge of international development, believes that overseas clients trust British architects. “There is a strong ‘brand’ acceptance around the world, which has grown with the number of successful projects undertaken over the years. Clients believe we will produce imaginative but practical solutions — concepts that can be built as well as looking good on paper. We have built a reputation for delivering good looking, well designed buildings, which is what clients want.”

“

Clients believe we will produce

imaginative but

”

practical solutions

Chris Lanksbury

Graham Cartledge CBE, chairman of architecture firm Benoy, agrees. “UK firms are known for providing solutions that satisfy clients’ needs, but in a commercially successful and practical way,” he says. “The UK is recognised for producing highly regarded, leading-edge design. This is true of the whole UK creative sector, not just architecture. The sheer weight of success from the UK creative industries is driving the UK economy forward.” Benoy moved into the emerging Asian markets about 10 years ago in anticipation of the changing shape of the global economy. The company now has offices in London, Newark, Hong Kong, Shanghai, Beijing, Singapore, Mumbai and Abu Dhabi. Some 80% of its business is conducted overseas, with China accounting for just over

50% of this figure. Recent developments include the Elements mall in Hong Kong, ION Orchard in Singapore, Shanghai IFC and Ferrari World Abu Dhabi. In January, a further four contracts in India were announced, representing fees of £1m for the company. But while Benoy is a UK firm in the traditional sense, the definition of a ‘British’ architect has more to do with the environment in which he or she works than where they were born, believes US-born Lee Polisano. One of the five former partners of Kohn Pederson Fox’s London office, Polisano founded PLP Architecture in 2009. According to Polisano, UK architects, particularly those based in London, have a distinct way of working — an approach that leads to designs that are different to those produced elsewhere. “Operating as a London-based practice for the past 20 years, we have developed a design ethos that is unique to us and the environment in which we live and work, and the issues we deal with on a day-to-day basis,” he says. Polisano observes that the creative sector in London is “a crowded environment”, offering rich opportunities for interaction and the exchange of information. “There is no doubt that London has the talent to deal with complex urban problems of any scale in any location,” he adds. “This particularly innovative approach is much sought after in global markets.” At least 50% of PLP’s business is currently overseas, including a Four Seasons hotel complex in Abu Dhabi, the new Deloitte headquarters in Amsterdam and a large urban-planning project for the Qatar Foundation. Mark Davison, head of design at the Yoo Design Studio, the London-based concept design, interiors and architecture company, also recognises the ‘London effect’. “London is where the energy is,” he says. “It’s where people want to be. There is a perception across the planet that we have a design pedigree that people want to buy into. Often the developer is looking for that something

Benoy’s Graham Cartledge: “UK firms are known for providing solutions that satisfy clients’ needs, but in a commercially successful and practical way”

Lord Foster: Foster + Partners was among the vanguard of UK architects to move seriously into the export arena

extra that will bring their project up a notch. They look to UK designers to help ensure the success of a development by providing a marketing difference at an early stage.” Since 1999, Yoo and its star designers — Philippe Starck, Marcel Wanders, Anouska Hempel, Jade Jagger and Kelly Hoppen — have been working with international developers on residential, hotel and commercial projects throughout the world. A whopping 98% of its business is overseas, including the recent Icon development on Miami South Beach.

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••• FEATURE

“

London has the

talent to deal with complex urban

problems of any scale,

”

in any location

Lee Polisano

Airgate office development in Dusseldorf, designed by Chapman Taylor

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Undoubtedly a key factor behind the success of UK architecture is the quality of training and the ability of British schools of architecture to attract the best talent from around the world. “Our training prepares us for working in overseas environments,” says Chapman Taylor’s Chris Lanksbury, speaking from the company’s Shanghai office. “It gives us flexibility, which is key to understanding local culture and needs, and means that we do not try to impose our own concepts on overseas clients. Our work must be contextual with local culture. We work with local architects to arrive at solutions that have an international flavour, but successfully respond to the local urban-design situation. This is important because many countries do not have our basic grounding in urban regeneration or commercial development. It’s not part of their culture.” Chapman Taylor began looking outside the UK in the early Nineties, having gained extensive experience of major UK urban-regeneration schemes in the Eighties. Fifty per cent of its work through the UK office now comes from overseas, although Chapman Taylor also operates as a global business with 15 offices across Europe, China, India and South America. The company has been involved in 70 projects in the past three years, including retail schemes Forum Istanbul and splau! in Barcelona, and the Airgate office development in Dusseldorf. As well as training in the UK, many architects from around the world choose to base themselves in the UK

Lee Polisano says that UK architects, particularly those based in London, have a distinct way of working — an approach that leads to designs that are different to those produced elsewhere

Chapman Taylor’s Chris Lanksbury: “There is a strong ‘brand’ acceptance around the world, which has grown with the number of successful projects undertaken over the years”

once they have completed their studies, giving Britain one of the most diverse communities of professional architects in the world. Lee Polisano notes that there are 2025 nationalities currently represented in PLP’s London office. “This reflects London’s status,” he says. “Young talented people want to come here to learn and to work, producing a talent pool that is different to that available anywhere else.”

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Benoy

Westfield W estfield London, UK

Benoy will be at MIPIM 2011 Stand L01.22.10

Benoy is an internationally acclaimed, award-winning firm of Architects, Masterplanners, Retail Auditors, Interior and Graphic Designers with a dedicated team of creatives and professionals

working from design studios in the UK UK,, the Middle East, India and Asia. Design integrity integrity,, international experience, local understanding and real personality combine to create the unique Benoy offer offer..

To To find out more about ab Benoy and our exciting project portfolio, join us on Stand L01.22.10 or to arrange a meeting, contact Amy Cartledge. amy.cartledge@benoy.com amy.cartledge@benoy.com We We look forward to seeing you soon.

Benoy www.benoy.com www .benoy.com