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June 25 2012

The Shard is the perfect metaphor for modern London | Aditya Chakraborrty

Expensive, off-limits and owned by foreign investors – the Shard extends the ways in which London is becoming more unequal

Next Thursday, a giant metaphor will be launched in London. The prime minister of Qatar will fly over especially; his supporting act will be Prince Andrew. Foreign dignitaries will be treated to a lavish dinner; lowly residents of the capital can gawk at a free laser show that threatens to out-do George Lucas.

This is how developers plan to "inaugurate" the Shard, the 72-storey skyscraper that already stalks Londoners everywhere they go. It glowers over your conversations in Peckham; it skulks in your eyeline as you amble along Hampstead Heath. Get up close to Europe's tallest tower, and its 1,017 feet (getting on for twice the height of the Gherkin) render everything around it toylike, laughable.

The money men behind the Shard would like the rest of us to treat it merely as a building. Ideally, you'd marvel at its jutting architecture (the work of Renzo Piano, don't you know); failing that, they'd take you castigating its arrogant flashiness.

But before falling for the predictable Shard-en freude, we should think again. Because what is approaching completion over on London's South Bank is almost the perfect metaphor for how the capital is being transformed – for the worse. The skyscraper both encapsulates and extends the ways in which London is becoming more unequal and dangerously dependent on hot money.

Consider again the story of the Shard. This is a high-rise that has been imposed on London Bridge despite protests from residents, conservation groups and a warning from Unesco that it may compromise the world-heritage status of the nearby Tower of London. What's more, its owners and occupiers will have very little to do with the area, which for all its centrality is also home to some of the worst deprivation and unemployment in the entire city. The building is 95% owned by the government of Qatar and its developer, Irvine Sellar, talks of it as a "virtual town", comprising a five-star hotel and Michelin-starred restaurants.

It will also have 10 flats that are on sale for between £30m to £50m, and from where on a clear day it will be easier to gaze out on to the North Sea, 44 miles away, than at the beetle-sized locals 65 floors down below. "We won't really market these apartments," the PR man cheerily told me. "At this level of the market, there are probably only 25 to 50 possible buyers in the world. The agents will simply phone them up."

So one of London's most identifiable buildings will have almost nothing to do with the city itself. Even the office space rented out at the bottom is intended for hedge funds and financiers wanting more elbow room than they can afford in the City or Mayfair. The only working-class Londoners will presumably bus in at night from the outskirts to clean the bins. Otherwise, to all intents and purposes, this will be the Tower of the 1%.

Perhaps the most remarkable thing about the Shard is that it simply exemplifies a number of trends. First, it merely confirms how far the core of London is becoming, in industrial terms, a one-horse town. Finance, which began in the Square Mile, has now spread to Docklands to the east, to Mayfair in the west and now to the South Bank.

Second, it proves that buildings are no longer merely premises owned by businesses, but are now chips for investment. What's more those chips are increasingly owned by people who barely ever set foot in the country. A study from Cambridge University last year, Who Owns the City?, found that 52% of the City's offices are now in the hands of foreign investors – up from just 8% in 1980. What's more, foreigners are piling into London property at an ever-increasing rate, as they look for relatively safe havens from the global financial turmoil. And yet, as the Cambridge team point out, the giddy combination of overseas cash and heavy borrowing leaves London in a very precarious position. Another credit crunch, or a meltdown elsewhere in the world, would now almost certainly have big knock-on effects in the capital.

The same story applies to London's housing market, too. Earlier this year, the upmarket estate agent's Savills noted that Britons now made just over one in every three property purchases in the posh parts of central London. "The more central the market and the more expensive the property, the more likely it is to be purchased by an overseas buyer or foreign national," their report noted.

London has historically always been the point at which foreign money enters Britain, and disperses in search of a place to invest. But, as Louis Moreno of University College London points out, what's happened over the past 15 years is that an unprecedented amount of foreign money has come into London – and lodged there, in its property. The cash hasn't gone into productive enterprises that will benefit or employ ordinary Londoners. It has sat in plush new flats or office blocks. And now it's setting up its biggest home yet, on the South Bank.

So, the Shard: it's expensive. It's off-limits. It's largely owned by people who don't live here. And it is the perfect metaphor for what our capital is becoming.


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March 23 2012

Goldman Sachs talks to Norman Foster over new European HQ in London

Bank holds discussions with Foster and Partners, Kohn Pedersen Fox and SOM over redevelopment of Farringdon site

Goldman Sachs is pressing ahead with plans for a new European headquarters in London by holding discussions with Lord Foster and two other leading firms of architects.

The US investment bank – whose boss has gone on an internal "muppet hunt" – has discussed plans to build a new campus for its European operations on Farringdon Street with Foster and Partners, the architects behind the Gherkin and Wembley Stadium, and two US practices, Kohn Pedersen Fox and SOM. KPF designed Goldman's existing London offices.

The bank, which employs about 6,000 people in London, wants to redevelop a 1m sq ft site on Farringdon Street, around the corner from its current main offices, although construction is not imminent. It has long owned one building at the site and recently bought an adjacent one. Both are empty.

Goldman's plans suffered a setback in November when the government granted Grade II listed status to 1960s murals on the front of Fleet Building, which used to be London's largest telephone exchange. The Department for Culture, Media and Sport followed advice from English Heritage that the nine ceramic tile murals by Dorothy Annan, which depict pylons, cables, telegraph poles and generators, were of "historic interest" to the telecoms industry and had "relative rarity as surviving works of 1960s mural art".

Goldman had opposed the listing of the murals and relocating them could be costly and time-consuming.

The bank's two main offices are in Fleet Street, while the firm's asset management division is based near the London Stock Exchange in Paternoster Square, next to St Paul's cathedral.

Possible candidates for the management of the bank's scheme include Tishman Speyer, which already managed the construction of Goldman's $2.4bn (£1.5bn) global headquarters in New York and rival US project management firm Hines. Goldman reportedly hired Tishman Speyer last June for general real estate advice in London. The company's finance chief Russell Makowsky previously spent 20 years at Goldman in the New York, Hong Kong and London offices.

Goldman again made headlines this week after it emerged that the chief executive, Lloyd Blankfein, had begun scouring emails for use of the word "muppets," a fortnight after one of its London-based bankers resigned amid much furore, claiming that was what some people at the bank called clients.

The bank declined to comment on its plans for a new headquarters.


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December 18 2011

Viñoly brought in as Chelsea looks at move to Battersea power station

Architect behind latest failed redesign for London's Battersea power station hired as creative brain behind developer Mike Hussey's plan for stadium for Chelsea football club at the site

Rafael Viñoly, the architect who worked on the most recent failed redesign for Battersea power station in London, has been hired as the creative brain behind developer Mike Hussey's proposal to build a stadium for Chelsea football club at the site.

Viñoly worked on the £5.5bn revamp of the Grade II*-listed London landmark that won planning permission last year, but the plan collapsed a week ago when the power station was put into administration after its owner, the Irish property firm Real Estate Opportunities, failed to repay £324m to its lenders. The 16-hectare site in south-west London, valued at £500m in October, will be put up for sale by the administrators, Ernst & Young, with Chelsea's billionaire owner Roman Abramovich seen as a frontrunner to acquire it.

Viñoly is collaborating with the architects Kohn Pedersen Fox on the plan put forward by Hussey, a former Land Securities executive. Chelsea has not made a decision to leave its Stamford Bridge home but has appointed Hussey's Almacantar vehicle, along with KPF, to draw up plans for a 55,000-capacity stadium to be situated to the south-east of the power station.

New York-based Viñoly wants to retain as much of the power station as possible, keeping structural changes to a minimum. His new plan is thought to be less ambitious than REO's 750,000 sq metre development of 3,400 homes, as well as shops and offices. The power station's distinct four white chimneys were to be demolished and rebuilt, as they were deemed to be "beyond repair".

But Keith Garner, an architect and member of a local campaign group, said: "Jamming a large football stadium against Battersea power station is a bad idea." The Battersea Power Station Community Group wants the turbine hall turned into an exhibition centre – a showcase for British design and manufacturing – with offices and flats on the upper floors. Garner held up the successful revamp of the former Dean Clough Mills in Halifax, once the world's largest carpet factory, as an example. He has tried to get Google UK interested, which is based in nearby Victoria and needs more space.

REO's lenders, Lloyds Banking Group and Ireland's National Management Asset Agency, are keen to recoup their money. Nama is thought to prefer Chelsea, while other potential bidders for Battersea include the Malaysian property group SP Setia, UK developers including Berkeley, Development Securities and British Land, along with sovereign wealth funds and private equity firms such as Blackstone.


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November 11 2011

Eco-home developer BioRegional Quintain to shut

Property developer behind environmentally sustainable schemes will halt work after Middlehaven first phase

The UK's highest-profile sustainable developer, BioRegional Quintain, is to be wound up after its parent company, the property developer Quintain, decided to focus on the London market.

BioRegional Quintain, originally set up as a joint venture by the influential environmental charity behind "One Planet Living" and Quintain in 2005, will finish the 80-home first phase of the Middlehaven scheme in Middlesbrough, and then wind itself up.

BioRegional Quintain's chief executive, Pete Halsall, told this week's Building magazine: "It is extremely sad but it is part of a wider decision of Quintain's board to focus on its core business. My understanding is that Quintain wants to be able to express sustainability in its developments in a different way."

Halsall confirmed that the venture would shut, with the loss of five jobs. It leaves the Homes and Communities Agency's (HCA) £200m, 750-home Middlehaven scheme without a residential developer for its later phases, raising fears for the project's green credentials.

BioRegional Quintain will also withdraw from the London Development Agency's prestigious One Gallions project in east London, where it was selected in 2007 with Crest Nicholson and Southern Housing Group to build a model 260-home environmentally sustainable development.

At its peak before the downturn, BioRegional had a £350m development pipeline on six sites. Its most successful scheme was the award-winning One Brighton joint venture with Crest Nicholson, which completed last year and included allotment spaces for residents to grow their own food on the roof of the development.

The joint venture was dedicated to the 10 principles espoused by BioRegional Quintain's "One Planet Living" philosophy, including the need for developments to be zero carbon and zero waste, to use local food, and promote residents' "health and happiness".

Wembley developer Quintain bought BioRegional's share in the joint venture last year. Halsall, who will leave the business, said the move did not mean that the kind of development promoted by BioRegional Quintain was a thing of the past, and that he would shortly be announcing a new venture dedicated to "deep green" developments. "There is still tremendous potential. Quintain has to focus on its primary portfolio right now but this kind of development is absolutely still the future."

The firm's demise was lamented by two Stirling prize-winning architects, both of whom have worked with the developer. Peckham Library architect Will Alsop, who was the master planner on Middlehaven, said: "It is very sad news. This was a company very committed to doing things in a more responsible way."

Peter Clegg, of Feilden Clegg Bradley Architects, which designed One Brighton, called the development a "great shame".

"It was a joint venture between some of the most conscientious sustainability thinkers of the past 10 years and one of the more significant developers, which had significant resources," he said.

David Curtis, HCA executive director, said: "While this is disappointing news, we remain firmly committed to Middlehaven. We are in discussions with BioRegional's parent company, Quintain Estates, to find the best way forward for their work at Middlehaven."


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May 06 2011

'Walkie Talkie' backers want tower protected from light blocking claims

City of London corporation will decide next Wednesday whether to protect the 37-storey tower from 'rights-of-light' claims

Land Securities and Canary Wharf Group have asked the City of London Corporation to use special powers to ensure its "Walkie Talkie" development can go ahead.

The corporation's planning committee will decide next Wednesday whether to protect the 37-storey tower at 20 Fenchurch Street from "rights-of-light" claims that could endanger the development, which is under construction and due to be completed in 2014.

Rights of light have become a contentious issue following the recent Heaney case in Leeds, where a court ordered a mandatory injunction, rather than damages, to remove part of the top two floors of a recently completed office block as they interfered with a right of light enjoyed by a neighbouring office building. The case was expected to set a legal precedent, but was settled out of court in March before reaching the court of appeal.

"Rights of light are a big issue after the Heaney case. The implication is that people could get an injunction and tear your building down," said James Abott, a corporation spokesman.

Donal McCabe, a spokesman for Land Securities, said: "When we got planning consent on 20 Fenchurch Street in 2009, we did quite a lot on resolving rights of light matters, but the Heaney case has muddied the waters for all developers."

There are seven buildings whose owners could raise objections to the Walkie Talkie following the Heaney case, including Scottish Widows, the owner of Sackville House on Fenchurch Street, Munich Re, which owns 25-26 Lime Street, and CCLA Investment Management, a manager of charity and Church of England investments, which owns 10-12 Eastcheap.

Worried about further delays to the Walkie Talkie, which was put on ice during the property slump, the developers enlisted the help of the City planning officer, Peter Rees. He has outlined the problems in a report, asking the corporation's planning committee to use powers under section 237 of the Town and Country Planning Act to give the building immunity from any rights-of-light claims.

The committee already invoked section 237, which is designed to protect developments that provide economic benefits to the surrounding area, last month to protect Helical Bar's 1 Mitre Square development. To do the same for the Walkie Talkie, the corporation must have an "interest" in the site – for example it could acquire the freehold. The tower will have 690,000 sq ft of office space as well as 23,000 sq ft of retail space.

"The City of London Corporation is committed to the growth of the City and 20 Fenchurch Street will help with that," said McCabe.

Bryan Johnston of Clifford Chance has warned that the Heaney settlement "has left developers in a dark place," and called for a reform of the rights of light regime.


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October 25 2010

London 'cheesegrater' project revived

Land Securities, Britain's biggest property developer, last week said it would restart work on a 37-storey building known as the Walkie Talkie in nearby Fenchurch Street

Decisions taken by property developers to go ahead with the "Cheesegrater" and the "Walkie Talkie" towers in the City will see London's skyline transformed in the next few years. The buildings, due to open in 2014, will be among the tallest and the most striking skyscrapers in the capital since Swiss Re's Gherkin opened in 2004.

British Land, run by former Barclays banker Chris Grigg, said today that it had teamed up with Canada's Oxford Properties to build the 47-storey Leadenhall Building, nicknamed the Cheesegrater because of its wedge-shaped profile.

It is the second major project in the Square Mile to be given the go-ahead within a week, a sign that confidence is returning to the City property market. Last week rival Land Securities, Britain's biggest property developer, said it would restart work on a 37-storey building dubbed the Walkie Talkie, reflecting its shape and sloping sides, in nearby Fenchurch Street after signing a £500m deal with Canary Wharf Group. Both towers were put on hold during the credit crunch when the market ground to a halt as banks slashed jobs and cancelled office relocations.

Other leading developments include the Pinnacle, also known as the "Helter-Skelter," and Heron Tower on Bishopsgate, due to open early next year, as well as the Shard at London Bridge. Two others have recently been completed: St Botolph and the Walbrook, both by Minerva.

British Land, the UK's second-largest developer and landlord, has struck a 50-50 joint venture with Oxford Properties Group, the real estate arm of Toronto-based Ontario Municipal Employees Retirement System, one of Canada's largest pension funds, to build the 610,000 sq ft Cheesegrater for £340m. Designed by Richard Rogers' firm, it will be one of the tallest buildings in the City and will stand on stilts to open up the space below for public use. The storeys vary in size from 21,000 sq ft at the bottom to 6,000 sq ft at the top to accommodate various tenants.

Both skyscrapers are expected to be finished in the second quarter of 2014, when many leases expire in the City. Neither has secured any tenants yet although insurance group Aon is thought to be talking to both Land Securities and British Land. Its lease expires in 2014 and it is looking for about 250,000 sq ft. Both developers stress that they do not need pre-lets to push ahead with the buildings.

"We welcome the start of an additional office development, given our positive stance on quality office space," said Harm Meijer at JP Morgan.

The recession forced developers to mothball most projects, but commercial property market has recovered since last summer, with the weak pound fuelling demand from international investors and a shortage of prime office space boosting rents. Office rents in the City have rocketed by almost 25% this year, the strongest recovery in rents since records began 22 years ago, according to NB Real Estate. Average rents for prime space increased from £42.50 a sq ft in the first quarter to £53.00 a sq ft in the third.

The Walkie Talkie will have 690,000 sq ft of office space as well as 23,000 sq ft of retail space. While the two towers will need to generate £45 to £50 per sq ft in rent to break even, analysts believe they could command rents of around £60 per sq ft, delivering a healthy return to the developers.

On Thursday, the City's first major shopping centre opens in the shadow of St Paul's Cathedral. Designed by French architect Jean Nouvel, who created the Serpentine gallery pavilion this summer, One New Change was inspired by a US stealth bomber. It hopes to lure tourists and bankers with its Banana Republic and Hugo Boss concessions and Jamie Oliver and Gordon Ramsay restaurants. It will also have 330,000 sq ft of office space.


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