As London rebounds from the pandemic, construction is poised to take off. Matt Barker of CSB continues to explores the future of London and the factors driving the next boom.
By Matt Barker *
There are significant pressures that look set to drive residential construction in the years ahead while retail and leisure projects also figure prominently in landmark schemes across the capital.
The residential imperative
Back in 2016, London’s population was booming with forecasters predicting the capital would be a megacity with 11 million people by 2050, but has Covid dented that ambition?
Some studies suggest between 500,000 and 1 million foreign-born people left the UK during the pandemic. As a result, London’s population may have dipped by four per cent, but reliable figures are impossible to find, and those estimates could be wildly off. The population may not have fallen at all. https://www.bbc.co.uk/news/uk-56435100
Estate agent Knight Frank described 2020 as “dominated by the escape to the country trend”. But as with all trends, things can change. In any case, moving out of town is more appealing to families and older residents than younger people.
Once social distancing ends, the gravitational pull of the city will reassert itself, predicts historical geography expert Professor Humphrey Southall, who points to inner London’s resurgence driven by creative sectors that thrive on collaboration and attract young workers who enjoy London’s nightlife. He expects something similar to drive growth again.
At CSB, we have seen lifestyle residential become increasingly important in the mix of projects that we are involved in. That is mainly due to the popularity of high-rise build-to-rent developments designed for young city dwellers who have taken the decision to eschew scrimping to save for a house deposit and instead enjoy the facilities these schemes offer such as concierge services, cinemas and gyms.
We are also seeing new commercial developments shifting from being mainly or wholly office spaces to more mixed-use, usually with a significant B2R residential element. Either way, new deals coming on stream suggest private sector investment in London as a place to live is still there.
It follows that big trends in residential, in particular the march of development from west to east, will carry on even if momentum may have been interrupted.
The public sector is investing too.
The Mayor of London, Sadiq Khan, is financing a new generation of social housing for Londoners. The £4 billion Affordable Homes Programme together with existing plans is due to deliver 82,000 new homes.
Meanwhile, moves are afoot to rebalance the City. Fewer than 10,000 people live in the Square Mile whereas 542,000 normally work there, something the Corporation plans to address by building 1,500 new homes in the next ten years.
Retail and leisure highlights
Retail and leisure continue to feature prominently in major developments at Nine Elms and Canary Wharf as well as in the city’s cultural centres, the West End and South Bank.
- The Whitely, a £1 billion resi, retail and dining complex in Queensway W2 due to complete in 2023, includes a sensory hotel and spa, the first of its kind in Britain. It features on Buildington’s list of London’s top ten new developments along with:
- Chelsea Waterfront: Three new buildings set to complete, including the Metropolitan (193 apartments over a 100m shopping mall).
- 1 Broadgate EC2: Mixed use scheme including retail and offices. Enabling works and demolition underway. JLL has taken 134,000 sq. ft.
- One West Point, North Acton: 54-storey tower with 362 apartments completing December 2022.
A final factor in both future retail and residential development could be the widely reported demise of the high street.
The government has toned down controversial new permitted development rules that would allow commercial-to-resi conversions without planning. Nevertheless, with demand for traditional retail space waning and housing pressures growing, it seems likely we will see more of such schemes even if they still need planning consent.
At the very least, many retailers are going to require fitouts as they adapt to new lifestyle and destination definitions of what shopping looks like post-pandemic.
All of this suggests that construction work across London is poised to skyrocket compared with current levels. In the next article in this series, we will consider the consequences of a comparable rise in traditional construction traffic ferrying materials to and from sites?
* About the Author: Matt Barker is Managing Director of CSB Logistics, a leading logistics provider in construction, engineering and FM projects.