From the point of view of east London and particularly aspirations for stellar demand for new offices and housing in and around the Olympic Park, Stewart Smith, executive director in the agent’s tenant advisory group, had the most to say.
Given that Lend Lease and London & Continental Railways alone are proposing 4m sq ft of offices around Stratford International, while Westfield has consent for a further 1m sq ft at the Stratford City shopping centre and the Olympic Park Legacy Company has 1m sq ft of broadcast and office space to fill, any snippets on potential new office occupiers in the capital are keenly sought just now.
Smith says the key current driver in the market for occupiers follows the “North American” model of intense cost cutting aided by “cloud technology”. This basically means that the increased sophistication of mobile computing means businesses are more and more not needing one PC for each member of staff and are chipping away at the one person per desk model as they reduce the amount of space they need to pay for and reduce their power consumption bills.
In this respect, perhaps unsurprisingly, accountants are leading the way, apparently now on average targeting lease agreements that house 1.4 people per desk. Not far behind are the financial services industries. CBRE expects little to no net growth in take-up of office space from these sectors for this reason.
Growth instead is expected from new entrants, particularly rapidly expanding Chinese and Asian companies looking for a base in the capital, and, perhaps surprisingly, media and technology companies, which are still keen for staff to work in a one person per desk environment because, CBRE suggests, this is what staff working for the likes of Google and Facebook demand.
Stratford, as a new office district away from the core, will no doubt already be keenly targeting both of these types of tenants. Its strongest hand, CBRE says, is likely to be its ability to offer the quality of space and the London talent pool the media and tech companies want alongside a cheaper rent. Smith points to decisions by the likes of Aegis, M&S, Rio Tinto and Astra Zeneca to move to large HQs in slightly fringe London locations as evidence of this developing trend among large corporates outside of the financial services arena.
There is one catch. Stratford is by no means the only emerging district targeting this space. King’s Cross, Waterloo, Battersea, Earl’s Court, Greenwich, White City, Paddington and more all have compelling cases for the defence.
The key over the coming years for the Stratford development community will be to leverage the undoubted political support it has had to push the area to the front of the queue.