EG LONDON DEVELOPMENTONDON


Estates Gazette Research found rents ranging around the mid-£20s per sq ft, with secondhand space exceeding the rents achieved by new space. “There is a dearth of supply and that


creates a general lack of activity, but there is a huge amount of demand for every building that comes up,” says James Couse of Edward Symmons. When it comes to getting financial


backing for schemes around Waterloo, developers have little rental evidence to offer. It is a Catch 22 situation: rents will not rise until developers have created an attractive office environment, but speculative schemes do not look viable unless rental levels improve. “Any sort of tower would need to get


rents that are probably not achievable in that location,” says Jeff Field of Jones Lang LaSalle. “For rents to rise, developers would have to collectively establish an office destination and make it a nice place for people to work.” There is a chance that the speculative


element of the Shell Centre will help to set a new rental level for the area, but the scheme offers only 275,000 sq ft of space, possibly insufficient to convince lenders that a precedent has been set. Developers Canary Wharf Group and


Qatari Diar have not yet committed themselves to building the speculative element alongside the main scheme.


WATERLOO DEVELOPMENT OPPORTUNITIES


Waterloo Station The station is due to be upgraded to reuse the international terminal and introduce longer platforms to reduce passenger congestion. Council planners are seeking a new street-level concourse with commercial development to help finance the improvements.


Hungerford car park Lambeth is seeking conversion of the car park to open green space to extend Jubilee Gardens but would support a development proposal of one third of the car park site. Any development should emulate the “campus-style pattern” of the South Bank.


Union Jack Club/Mercury House The three towers of the Union Jack Club above a low rise base date from 1976 and create a blank wall to Waterloo Road. To the south, low-rise buildings make poor use of the available space. The council is seeking a development to improve public realm incorporating offices and residential uses with potential for a “landmark” building fronting the station.


Source. Lambeth council 11 May 2013


Cornwall Road bus garage The council is seeking to relocate the bus garage. Planning guidelines suggest the site is suitable for residential use with retail and community uses at street level.


Lower Marsh The area contains a street market, shops and houses. It has potential for development of infill sites and some buildings, including the Waterloo Job Shop and library.


York House and Beckett House A 2008 planning permission allowed the demolition of York House and construction of a 13-storey tower of offices with retail on the ground floor. Renamed Westminster Place by then owners Delancey and Scottish Widows, the site has now been acquired by student accommodation provider Urbanest and others, who have planning permission for a 19-storey student accommodation block. However, Lambeth has also extended the time limit for the 2008 office-based consent until 2016.


SOUTHBANK RENTS


10 15 20 25 30 35 £ PER SQ FT


0 5


NEW SPACE SECOND HAND


2006 Source. EGi Research


“We haven’t taken a final decision, although we are thinking more and more of doing it. We think very highly of the location, so there is a strong case to be made,” says John Pagano, managing director of development at CWG. Pagano says the consent for the neighbouring Elizabeth House has added impetus to the Shell Centre development, but the decision on whether to build speculatively will not hinge on whether the Chelsfield/L&G scheme goes ahead.


“They may wait for us to start, but we


won’t wait for them,” he says. CWG/Qatari Diar have not fixed a rental


target. “We don’t know exactly what rents we would be looking for, but the appeal of the location should drive reasonable rental levels and it will be a state-of-the-art building. It will be at a substantial discount to core West End,” says Pagano. It may take a commitment to build the


speculative office block at the Shell Centre to convince the Elizabeth House Partnership to embark on their redevelopment – and to secure financing, although the Chelsfield/London & Regional jv declined to comment on how the scheme would be funded. Meanwhile, CWG/Qatari Diar have yet


to secure financial backing for the Shell Centre redevelopment. Pagano says the scheme will be financed with a combination of equity funding and senior debt and, while the partners have been in talks with the banks, finance is not yet secured. “The finance isn’t in place because we haven’t secured the planning consent,” says Pagano. “I am very confident that financing isn’t an issue.” CWG has no preconception about what


sort of tenants the building, which will have floorplates of 18,000 sq ft, will attract. Edward Symmons’ Couse says demand for Waterloo is coming from a wide range of occupiers and areas, with strong interest from businesses offering support services to the financial sector. However, it seems Pagano maybe


looking west rather than east: “The Shell Centre development is going to sit very well with the West End market and people are being driven out of the West End by cost.” Regardless of where they come from,


it looks like occupiers hold the key to unlocking Lambeth’s aspirations for Waterloo’s redevelopment.


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