Planning and regeneration media coverage
Croydon Council media relations team
Source: Date: Media relations
The Sunday Times 27 September 2015 Tel: 020 8760 5644
Email: press@croydon.gov.uk
Source: Date: Media relations
The Sunday Times 27 September 2015 Tel: 020 8760 5644
Email: press@croydon.gov.uk
EG LONDON
Go west The capital’s original creative and media hub fights back Desirable space What employees want from their workplace Collecting the empties How rising rents have boosted the appeal of vacant possession
THE CAPITAL IN FOCUS 17.10.15
Has
Croydon’s time come? The borough’s struggle to beat the regen clock
IN ASSOCIATION WITH
AN
PUBLICATION
EG LONDON CROYDON
In the waiting room Croydon has been attempting to regenerate for the past 30 years, but things seem to keep going wrong. Has its time come at last? David Thame reports
J
ust when it was all going so well, Croydon takes another tumble. First, Les Bleus, the French rugby squad, arrived in Croydon for the World Cup and promptly described their base as “dull, sad and monotonous”. That made headlines in all the wrong places. Then it became clear that a longawaited office deal – the one that was going to revive the market – was not
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17 October 2015
going to happen. Or not happen yet. Metro Bank is not on the brink of signing for 150,000 sq ft at Croydon’s Ruskin Square. Some sources say the bank will consider the second phase at Ruskin Square – but it is all looking a bit tenuous and, when pressed, official sources do not provide much comfort. Ill fortune has dogged Croydon’s revival efforts for the past 30 years. Only this time it seems doubly unfair, because it coincided with a feeling that, at last,
things were going Croydon’s way and there was some genuinely good news. The same week that Les Bleus arrived, ministers approved the compulsory purchase order that unlocks Hammerson/Westfield’s 1.5m sq ft Whitgift retail redevelopment. Excellent rail links, speculative office development and top office rents – today about £24.50 per sq ft – at less than onethird of central London prices, give it a competitive offer. What’s not to like, say
the borough’s leaders, who boast of a £5.3bn investment programme. While everyone in Croydon agrees that the town’s time has come, to outsiders it has sometimes looked over-sold and under-developed. The town urgently needs to deliver, and nobody knows it better than Croydon council’s executive director of redevelopment, Jo Negrini. She confesses that Croydon must not drop the ball this time round. “We know we have a window of
17 October 2015
opportunity here that we are working in,” she says. “Every area has its time, but it is fleeting. When I arrived in this job last year, I said it has got to be third time lucky, because we have already missed two property cycles. “We have got speculative office development going, the retail offer being sorted, we have set up our own development company and pulled together an £80m revolving investment fund. In my time here, we have not made
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A 2m sq ft mixed-use scheme is planned for Ruskin Square, opposite East Croydon station
“We are absolutely convinced Croydon is an office location that can attract new occupiers from outside the area” any commitment to anything that we cannot fund.” This kind of leadership wins plaudits from property people. The wearyingly long list of plans and strategies is being replaced by targeted action in discrete areas of the town. “I don’t know how many masterplans we have got,” confesses Negrini, “but my focus is to make sure things happen.” Much hope is pinned on Stanhope’s and Schroder’s Ruskin Square office development – the third and most ambitious of a hat trick of recent Croydon office schemes (Abstract Land’s 100,000 sq ft Renaissance and Canmoor/CarVal Investors’ 182,000 sq ft Interchange completing the trio).
James Lass is fund manager at Schroder UK Real Estate fund which, with Stanhope, is behind the 2m sq ft mixed-use Ruskin Square scheme opposite East Croydon station. Around half the floorspace could be offices, with a 190,000 sq ft speculative first phase on site today. A planning application for the 190,000 sq ft second phase is before councillors. The second phase may or may not be speculative – Lass gives the impression that no decisions have been taken – and it might make an eventual home for Metro Bank (see panel below). “We pressed the button on the first phase because we are absolutely convinced Croydon is an office location that can attract new occupiers from
outside the area,” says Lass. There are no official quoting rents, but a headline figure distant from £35 per sq ft would amaze most observers. “London needs significantly more office space to accommodate growth, and Croydon is well placed,” he says, adding that it is “important” a solution has (at last) been found to the town’s ageing retail offer. The Westfield/Hammerson plan for a 1.5m sq ft Whitgift redevelopment now has momentum. The compulsory purchase order was waved through by ministers in mid-September. Even so, land assembly could still be slow and the developers offer only a cautious, sketchy timetable.
was of prelets and heads of agreement. At some point over the summer, the upbeat mood evaporated. Sources at Ruskin Square downplay the likelihood of an imminent deal. They give the impression that the tide is out, and they do not know when it is coming back. Savills, which has been advising, says a 200,000 sq ft requirement is still live, and it is focusing on new-builds in London fringe locations like Stratford and Croydon. Rumour – often a friend in these circumstances – says uncertainties over everything from the size of the requirement to the interior fit-out delayed a project that was, genuinely, close to agreement.
But redesigning a speculative building already under construction was unsatisfactory and expensive. The bank may come back to prelet a later phase at Ruskin Square for 2017-2019 occupation – or it may not. Metro Bank’s spokespeople pour cold water on the rumours, saying the bank has no plans to leave Holborn, WC1, and, as for adding new floorspace elsewhere, it has nothing to say. Stuart Austin, director at JLL, says: “Metro Bank remains a target. But whatever happens, Ruskin Square will not be a flash in the pan. Occupiers from central London will have to widen their search areas to include Croydon.”
METRO BANK A prelet to Metro Bank at Ruskin Square would have been exactly the boost Croydon’s renascent office market was waiting for. Since 2012, when Nestlé pulled its 130,000 sq ft requirement from Croydon to Crawley, the town has desperately needed a big win. It would be living, breathing, floorspaceoccupying proof that Croydon can lure cost-conscious occupiers from central London. Alas, it does not look like it is going to happen – at least not yet. This spring, the market was alive with rumours that Metro Bank had narrowed a shortlist of three London locations down to just one – Croydon. A 150,000-180,000 sq ft deal seemed imminent and the talk
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EG LONDON CROYDON
THE FIRST OF THE NEW? Jersey-based telecoms group JT Global could be the first small foretaste of an exodus from central London to Croydon. The business, formerly of Bishopsgate, EC2, has taken 4,000 sq ft at Canmoor/CarVal Investors’ 182,000 sq ft Interchange development. The rent is believed to be £22.50 per sq ft. Andrew Willcock, director at joint letting agent Savills, explains: “Croydon is proving popular with occupiers looking for an alternative location to central London. JT Global, for instance, moved from Tower 42 in the City to Interchange where the cost, including rents, rates and service charge of prime grade-A office space is up to 58% less. “There are also a number of occupiers at present looking to relocate from the West End, as the total occupancy costs and operational outgoings will be up to 78% lower in Croydon.” CarVal Investors and Canmoor bought the West Croydon block in 2013 and have since completed a refurbishment. Letting agents are DTRE, Knight Frank and Savills.
Dingwall Place
George Street Courtyard Hammerson development director Carolyn Kenny says: “The CPO is an important development milestone. However, there are other important work streams working concurrently, including the relocation strategy to keep the town trading, future leasing, as well as achieving detailed planning consent. At this stage, we anticipate drawing down the land in late 2016 with a full construction start in 2017, but this will be kept under review. “At this stage, the expected opening date is 2020.” Kenny, like her partners at Westfield, hopes the retail revolution they are fomenting will stimulate the office market. Stratford has already begun to mop up office requirements in the wake of its retail offer, and White City is now preparing itself for the same journey; could Croydon be next? “Croydon has an advantage because Stratford was never an office location before the Westfield retail development, but Croydon was, although its stock has
aged,” she says. “If the town has a superfunctional retail offer on its doorstep, that will influence locational decisions. “Croydon has been too modest. It’s been a struggle to read a positive story and the town has been a bit apologetic. Now sentiment has changed. I don’t think it’s been oversold – it has phenomenal potential to be a city centre in its own right.” The Westfield/Hammerson redevelopment of the Whitgift will deliver in 2020 – maybe. By then – if Croydon’s cheerleaders are right – the town should have seen inward migration of new businesses and the office market will be back on its feet. But a lot can happen in five years, and Croydon’s window of opportunity will not stay open for ever. The day that first big office relocation gets signed – maybe Metro Bank, maybe somebody else – the relief will flood through Croydon like rush-hour traffic on Wellesley Road. Until then, it is more promises and, yes, more waiting.
East Croydon station, is let to the Home Office until 2023 at a rent of around £12.50 per sq ft, and could be converted to apartments if the office market has not picked up by then. “We are seeing switched-on investors like Brockton come to Croydon, shrewd guys whose arrival tells a story in itself,” he says. “Perhaps the vision for Croydon as the Barcelona of the south London was a bit optimistic – I can’t see Wellesley Road fringed with palm trees – but deals like this bring the town into focus with investors.” Andrew Willcock, director at Savills, thinks the market is already moving quickly. “Over the past 10 years, average take-up in Croydon has been around
97,000 sq ft a year,” he says. “However, take-up alone in 2014 was double this at circa 194,000 sq ft, the highest take-up recorded since the last peak in 2006. So far in 2015, we’ve seen 180,000 sq ft and the market is expected to exceed 200,000 sq ft.” The market is tightening, making new floorspace all the more appealing. Croydon council estimates that around 2m sq ft has been removed from the office market for conversion into residential floorspace. Croydon specialist Sinclair Clark estimates total availability at a shade under 500,000 sq ft. Imminent arrivals on the market include two further refurbishments totalling 105,000 sq ft.
GUILDFORD ON WHEELS? Stratford Mk II, or Guildford on Wheels? Croydon’s office market could develop either way. Will it become a central London sub-market like Stratford, or a niche semi-suburban offer like Guildford? With central London getting seriously steamy, this is Croydon’s big chance to attract new occupiers. “Guildford on wheels with a rocket behind it,” suggests Alex Titheridge, national capital markets director at Colliers International. Brockton Capital’s successful £110m bid for the 441,800 sq ft Apollo House and Lunar House, acquired from Israeli pension fund Harel, seems like a sign of the times to Titheridge. The site, next to 20
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Source: Date: Media relations
London Evening Standard 16 September 2015
Tel: 020 8760 5644
Email: press@croydon.gov.uk
Es t at esGaz et t e 16Sept ember2015
Pr oper t yWeek 16Sept ember2015
Source: Date: Media relations
Planning Magazine 23 October 2015 Tel: 020 8760 5644
Email: press@croydon.gov.uk
Source: Date: Media relations
Planning Magazine 23 October 2015 Tel: 020 8760 5644
Email: press@croydon.gov.uk