Good morning. Thank you to New London Architecture for organising this seminar.
Let me spend a few minutes giving a snapshot of Grosvenor’s history and approach; my perspective on the future of the London estate; and some observations on the challenges we will all need to overcome to deliver change that is lasting and beneficial.
London’s greatest success factor is its ability to attract and retain talent, nationally and internationally. This will be especially true when we have left the EU.
The key to attracting that talent will be great places that are both dense and liveable.
Urban neighbourhoods with rich histories that offer a unique lifestyle, with homes to people of mixed incomes, backgrounds and life stages.
Commercial districts with a compelling mix of opportunities, jobs, the best public spaces and amenities offering a better quality of life.
It is profoundly challenging to create and manage such places in London, so we’ll need ever closer and more creative collaboration between government and the real estate industry.
But bold public sector leadership must be the starting point for success.
We need bold leadership – starting with the Mayor – with good place-based policy and placemaking leadership. That leadership should come with a compelling vision for growth and an honest depiction of the trade-offs inherent in delivering it.
Our perspective on that proposition comes with a long-term view, from a long history. The origins of the business lie in the land in London that came into the family in 1677.
Our London estate was originally made up of 500 acres of swamp, pasture and orchards to the west of the City, acquired through the marriage of Sir Thomas Grosvenor and Mary Davies, the 12 year old daughter and heiress of a scrivener in the City of London.
Today, this British, family-owned property business is international and diversified. Our business is now active in 60 cities in 12 countries around the world.
In the UK, our strategy is to tackle two big challenges. First, we want to help drive the success of the West End, London’s economic and cultural powerhouse.
The West End faces enormous pressures as a result of London’s growth, and fierce international competition. It requires new investment in its infrastructure to meet growing demand. We cannot take for granted its ability to host new jobs and better places.
So in response, we have developed a 20 year vision to transform our London estate and tackle the pressures facing the capital. With London's rapid growth, we want Mayfair and Belgravia to be more active, more open and more integrated – a more popular place, working harder for our city.
We think it’s vital the estate evolves to meet the changing needs of our society.
And second, we want to help overturn the housing shortage, which in London is acute and eroding our city’s ability to attract and retain talent. In all its complicated manifestations, that shortage calls for bold political leadership and in some cases policy change to overturn.
It’s widely acknowledged we need to double supply as a starting point.
So in response, we have a masterplan for a new neighbourhood in Bermondsey, inner London, hosting 1,350 rental and discounted rental homes – accessible to many on low and middle incomes.
We want to create and manage one of London’s great new neighbourhoods – mixed, fully integrated and physically connected with its district.
And elsewhere across the country, we have partnerships with local authorities and landowners to create new districts – with a total pipeline of around 5,000 homes. We are landlord, master-developer, builder, asset manager, public sector partner.
Turning to the London estate, let me touch on the approach Grosvenor took from the beginning. We pursued a model of land promotion.
The estate was laid out and we invested in expensive infrastructure and amenities to encourage house builders to take sites. We built squares and gardens; public realm that did not make money; streets of shops, mews houses, schools and affordable housing still evident today.
And we created a JV model using ground rents with a long lease to the builder, who undertook development so that there was a long term alignment in the maintenance of investment.
We have constantly regenerating this land to respond to demand, refreshing buildings and the public realm, appreciating that the best places have a mix of uses and redeveloping obsolete or low density buildings and areas to meet changing needs.
Today Mayfair & Belgravia have a global reputation. To survive, flourish and grow, they will have to keep evolving.
The context for that change is London’s unprecedented growth – its population is growing as fast as in any period since the early 1800s. London’s population is forecast to reach over 10 million by 2030, the equivalent of adding a town the size of Bath every year.
That growth is putting pressure on our communities, our infrastructure and our quality of life. Sitting at the heart of the capital, our London estate can’t be insulated from those pressures, nor should it be. It will have to respond by being more active, more open and more integrated – working harder for the capital.
The estate hosts around 50,000 workers and 8,000 residents which is a ratio of around 6:1. But we think it could do more.
So just by way of example, on levels of workplace occupation, the estate is arguably underperforming compared to neighbourhing districts in central London.
North Mayfair has the second lowest proportion of employment space in the West End and half the employment density of its neighbouring Regent Street district. As a proxy for the efficient and effective use of space, streetlife and productivity, we think this analysis is compelling.
Now we have, amongst other things, a substantial development pipeline for the next fifteen years (£640m in the next five years) which would, fully realised, host space for 2,500 new jobs which is combined with a public realm programme at over £40m in the next five years.
And while the estate generates a fifth of Westminster’s business rates, we estimate that our investment programme, if fully realised, would drive those rates up by 30 percent. But it could do more.
Our analysis suggests that if our London estate had just three quarters of Marylebone’s employment density, it would host around 10,000 more jobs than it does today.
So we have set a direction of travel with our 20 year vision. We are developing strategies that encompass better streets, greener places, new culture and greater integration,. both physically and digitally.
We are already amongst other things delivering a substantial digital upgrade on the estate; and have opened a public call for ideas for the remagining of Grosvenor Square.
We are shifting our retail and commercial tenance mix. In 2017 we signed 45 new retail and commercial tenants including food, fashion, gyms, lifestyle, and restaurant operators; all strong brands, the majority independent, each seeking in many cases their first physical presence in London.
But in its totality, there is very little in the vision we can deliver alone. We are discussing the best way to bring about that change and looking for partners and collaboration.
We see the potential for:
A greater mix of commercial uses including a leading-edge retail offer that has greater input from residents on amenity retail;
Greater residential and commercial occupation alongside development and the more efficient uses of spaces with flexible spaces and better supporting infrastructure;
Ground floors activated consistently (including side streets), for a more integrated retail environment;
More and better street-life, particularly in the daytime with more ground floor activity;
New and increased enterprise with flexible and shared work spaces;
Substantial cuts in traffic and a better pedestrian experience with bold public realm improvements coordinated with other landowners;
New operational management plans to reduce the impact of change and day-to-day activities; and
A better cultural offer and greater animation to support commercial activity and extend interest beyond the retail offer.
On all of these counts, as much as we want to invest, we also want to share our point of view on the changes we think are needed to tackle the challenges facing London and the West End.
We want to suggest a direction of travel, collaborate with others and be open to ideas and public opinion. We know that businesses are increasingly expected to tell their story in sharper, more compelling terms to explain their societal contribution.
So we’re ready to invest to create and manage the places that will drive London’s success in the West End.
For too many years it seems to me, the West End’s success has been undermined by a false trade-off.
A false trade-off between economic growth, the creation of new jobs and enterprises and a better experience for residents. Or between densification – and enhancing the unique character of the West End.
A different narrative is needed. There is a need for bold, placemaking leadership from all tiers of London government that comes with a compelling vision for growth and an honest discussion of the trade-offs.
I look forward to hearing the debate unfold today.