Welcome to the CPA Annual Lunch, in the splendid surroundings of the Guildhall. Aren’t we lucky.
A lot has changed during the first year of my tenure. This time last year the newest macro shock was the war in Ukraine. Since then, we have had the Turkish earthquake, the Trussonomics experiment, a new prime minister, a new chancellor and a new monarch. We also have the ongoing cost of living crisis. How do we make sense of these things and how do we respond?
These are some of the issues our guest speaker Tim Harford will be unpicking later. Tim is a Financial Times columnist, BBC broadcaster and widely known as the “Undercover Economist”.
Tim has just released his latest book ‘The Truth Detective’ aimed at helping children make sense of a world that doesn’t add up, which could come in handy for the agents in the audience.
Priorities and policy
But seriously, I know you all remember these very clearly but the CPA has 4 priorities: support the City’s economic and social recovery; promote vibrant public spaces and digital infrastructure; support net zero and ESG; encourage DE&I. These align well with the City’s aspirations.
It’s important we acknowledge the broader policy efforts of the City beyond the built environment; the vocal encouragement for further UK-EU cooperation on financial services being the best example that we wholeheartedly support.
If you haven’t heard of the City’s flagship policy of ‘Destination City’ then where have you been!?
It’s great to have a vision, and the City has a good one, but it is even better when it is backed up with strong advocacy, good policy and delivery. So, congrats to Chris Hayward and his team for that.
It is in all our interests to get more people to spend more time in the Square Mile. It is great to have big events, get more tourists and see more families on the weekend. But, let’s not forget some of the easy wins we could seize, the shoulder days of Monday or Friday, the choice of where to go for breakfast or an after work drink.
Progress
So how is progress? It’s good.
Bank Junction’s transformation is nearing completion. The Riverside path is opening up. St Paul’s Gyratory work is progressing at pace. Construction on the new Salisbury Square police and courts complex has commenced. Four new Business Improvement Districts have been established to help further drive local improvements. And of course we have Crossrail, already the country’s busiest rail network.
The City’s cultural renaissance is taking shape too. The Museum of London’s move to West Smithfield is well underway, it will be a national asset and should be treated and funded as one. The Barbican is to undergo a major refurbishment to make it fit for the future.
We have other new amenities in the City too, not least the new Pan Pacific hotel, which is their first in Europe. As the internet tells me these days ‘it is important that we do our own research’ so come and join us at Pan Pacific for the CPA dinner on 12th October.
If we are facing a structural rather than cyclical challenge to the office market that requires us to create more of the best quality space then we also need to acknowledge the role of uses like culture in any City ecosystem and embrace the way they improve diversity and resilience of places, perhaps in some of the office space that is left behind.
Future
Despite some macroeconomic uncertainty investors have continued to show faith in the City. Shravan Joshi’s Planning and Transportation Committee has consented over 4.6m sq ft in the City last year. In amongst those schemes there was a further £78m of s106 and CIL contributions. There has been some progress on getting it spent but we need to do more to help make Destination City a reality.
Sustainability
That reality must also be sustainable, and it is pleasing to see the both the City and CPA making progress here too. The City’s Carbon Options Guidance has been truly ground-breaking, setting a benchmark which other planning authorities are following. The CPA’s ‘Retrofit First, Not Retrofit Only’ research added nuance to what is often an emotive topic.
The CPA’s findings show that most of the industry has fully embraced a retrofit first approach. If you’re in this room, you are probably one of those that genuinely cares and wants to make a difference. I encourage you to take this policy and research outside the City and use them to help drive best practice elsewhere.
We need sufficient flexibility in national and local policy to recognise that every building is different. We know that to work as a retrofit it has to have ‘good bones’ and best in class product can be created. We can already see this in the development pipeline courtesy of Fletcher Priest at LaSalle’s 1 Exchange Square and Fletcher Priest at YardNine’s 100 Fetter Lane (check the sponsor!?). BL as ever is trying to do its bit with Piercy & Company at 1 Appold Street.
But embodied carbon is only part of the picture. We need to do more to address the ‘performance gap’ of buildings and drive down operational carbon emissions. The CPA has some good ideas so watch this space in 2023.
The market
If the new typology in the pipeline is a reason to be cheerful then who is going to fill it? We’ve seen evidence in the year that businesses are buying in to this good progress.
We are seeing net absorption – 64% of occupiers that moved expanded their footprint.
We are seeing the City attract new occupiers – 63 are moving here from other boroughs.
We are seeing product diversity to help SME’s – British Land is seeing good occupancy and retention at our Storey. Landsec has committed to expand Myo.
We are seeing some big deals:
- Clifford Chance to GPE’s 2AS.
- Linklater’s expansion at CORE’s 20 Ropemaker.
- Latham & Watkins expansion at Brookfield’s 1 Leadenhall.
- Taylor Wessing re-gear at LandSec’s New Street Square.
I’m not sure any of us say this often, but we love lawyers at the moment. And believe it or not there are more out there.
It feels like we have diagnosed the challenges, developed policy to respond to them, set our priorities, are making progress, seeing change and getting the right feedback from the market. Let’s hear from Tim and see if we still think the same.
I’d like to thank the Board for its support in the year, especially Deborah Saunt, of DSDHA as outgoing Vice Chair, and Ilna Patel, from Nuveen who is taking over as Vice Chair.
There’s a very special thank you to Lisa Webb, from Gerald Eve, who has recently stepped down from the Board after nearly two decades – half of which as Treasurer, proper dedication. I’m delighted that Karen Cook, of Spice Design, has agreed to take on the role.
Thanks also to the hard working CPA exec team for their efforts in delivering a strong programme of research, policy and engagement. Thank you to JLL for kindly sponsoring today’s lunch.
Finally a big thank you to you, our members, because without you we wouldn’t exist.
I ask you one more thing. Turn to your neighbour and talk about something that you feel positive or hopeful about.
I hope you enjoy your lunch.
