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Architect and researcher at Hawkins\Brown, Michael Riebel describes a study that found how, compared with other commercial uses, creative workspace can be a vital ‘good neighbour’ that adds quantifiable value to residential schemes
L
ike most large cities with high property prices, London has seen a rapid loss of affordable workspace for artists and makers. These spaces, however, are an essential component of London’s DNA – it’s an intrinsic part of its urban culture that makes it an attractive place to live, forming a vital part of the city’s unique ecosystem. Without them, London would not be as successful among competing urban centres across the globe. The Creative Land Trust (CLT) is a charity trying to tackle this problem. The CLT commissioned Hawkins\Brown, dataloft and Ramidus to quantify the value added by creative workspace to new residential developments, translating the widely acknowledged ‘soft value’ of creative neighbourhoods into a ‘hard value’ that investors and developers can accept for use in evaluating development opportunities, encouraging them to re-examine the risk-return trade-off of creative workspace provision.
The study aimed to answer two questions
– firstly, is there a positive correlation between property prices and the presence of artist/creative workplaces? Secondly, could creative artist/creative workplace be a commercially viable use compared with residential units, and would it be an alternative to other non-residential uses such as light industrial or retail in developments?
The research team collected house price data in locations across London and the south east that are recognised as clusters of creative workspaces. These were analysed over different time frames to identify the level of outperformance in house price data relative to the wider market. It focused on
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case studies of creative clusters in London (Hackney Wick, Woolwich Dockyard and Tottenham) and the Thames Estuary (Margate, Southend, Basildon, Thurrock and Medway) and standalone schemes where creative workspace had been included in a residential development in London (Galleria in Peckham, Bow Arts in Royal Albert Docks, ASC Arthouse in Croydon and Second Floor Studios in Wembley). As house prices are the outcome of various factors, the research was backed up with in-depth qualitative data, which included expert interviews and a short questionnaire survey to canvas views on the relationship between creative workspace and the value of residential property. Interviews were also carried out among residential developers, estate agents, creative workspace operators and local authorities. The resulting data suggested there is a financial value to benefits that creative industries bring to residential areas, expressed in house price data. Over a 10- year time frame, this amounted to a 4.4% per annum price outperformance against the wider London residential market – a total of 44% over the period.
The per annum outperformance ranged from a high of 10% per annum (London City Island) through to 2% per annum (Hackney Wick/Fish Island). The difference in residential values is comparable to the local economic effect associated with large-scale urban regeneration, green or blue spaces, popular schools, or certain grocery stores being adjacent to homes. In the Thames Estuary research clusters and case studies used, the outperformance was 3.3% per annum, 16.6 % over five years. As this area is a more emergent
Artist workspaces can and should be a component of a commercially successful residential development
market compared to London, the price development was measured over five years. This outperformance is not smooth or consistent over time or place, and there are many factors at play; nevertheless, for these clusters, there was an association between creative workspace and outperformance (in residential price terms). Of course, within large-scale regeneration, there are other positive contributions from a range of amenities and well-recognised brands; creative workspace is only one ingredient. However, with a growing number of examples, it is clear that developers are increasingly willing to value its inclusion. Developers corroborated the view that each site had to be evaluated in its own right but that, in certain circumstances, the inclusion of creative workspace had benefits, even more so where there was a need to protect employment space. Creative spaces bring visible benefits, bringing life and vitality to an area. Active curation, expert management, and community engagement can greatly enhance these benefits. Creative workspace is considered ‘a good neighbour’ for residents, compared to other commercial uses. The long-term commitment from workspace operators is attractive to investors as it impacts yield.
ADF JULY 2022
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