LREF switches focus to people, not property

Wednesday 12 June 2019

People, not property.
That was the underlying theme of much of the opening day of LREF this year as the capital’s development industry sought to instill change against a fluid political backdrop.

The keynote looked at the London economy, Deloitte’s Ian Stewart noting the capital’s status as a ‘tremendous magnet for people, for capital, for business’. But it was easy to forget that London was in decline from the 1940s to the 1980s, and only returned to wartime population levels in 2006. 

Although there has been a contraction in London’s share of the UK economy it has come through the financial crisis in good shape. ‘But the key resource of London is people in London’ said Stewart.

Everything Berkeley does is about people, said Tony Pidgeley, but social housing is perhaps a term we should get rid of – ‘we should be creating a community which treats people equally’. Over in Westminster, said Nickie Morgan, housing is a key priority, principally because ‘if we don’t have living cities, cities die’. The authority is not anti-growth – ‘we think people bring growth’, but with an average income in Westminster of £52k and average house price £1 million, London will ‘die’ if the affordability crisis is not tackled, and people will move on to other cities like Manchester and Birmingham, Morgan believes. The middle-income bracket is particularly hard hit here, she added, and if this is not addressed cities risk becoming ‘uber-rich and uber-poor, with nothing in the middle’.

Modular may provide one answer, Pidgley saying that Berkeley’s new factory in Ebbsfleet will be able to provide some 500 houses a year from its production lines, one carpeted house produced every three days. There was optimism across the panel for the future, however, principally founded on London’s natural advantages, and assuming the city does not get complacent.

Neither should we rest on our laurels when it comes to designing for talent, said Derwent’s Simon Silver in a session that looked at future offices. For Derwent, architecture and design comes at the very forefront of its activities, he said, especially in reusing buildings – often industrial –  and quite often those with ‘good bones’.  But volume is the key thing. ‘We try to major on building exceptional volumes’, he said. Meanwhile Helical’s Gerald Kaye said the key thing was to create spaces where people want to be. ‘You go to some office spaces and they are so boring no-one in their right mind would sit there’, he said. But businesses perhaps did not quite grasp how much good design does for their bottom line.

Deloitte has realised this equation, especially since opening its latest building at New Street Square, said Chris Robinson. And Gensler’s Valerie Segovia stressed the virtues of flexibility, adaptability, and the need to look at how society is changing, making spaces that are ‘different and special’, with character and personality. Nobody wants to be in a sterile space, and differentiation is key.

Kaye said that decisions used to be driven by the finance director, while HR now has more of a role to play, and in terms of the future, where tech takes us will have a big say in the office of the future, said Silver.

In terms of space as a service, the subject of a later session, AECOM’s Nicola Gillen said accommodating flexible and agile working is going to get more complex. But in terms of immediate drivers, voice is going to be ‘huge’ with office users increasingly talking to their phones’ or laptops’ Alexas or Google Homes in open plan environments.  In the future, perhaps we will see battery powered buildings, or even the use of Graphene to help radiate heat and light. For Savills’ John Redfern, one of the biggest shifts has been putting people at the heart of things, asking occupiers what they want. But the wellness element is ‘fundamental’ now.

Wellbeing was coincidentally the subject of the next session, and is incorporated into almost every project Cluttons has, said Philip Booth, helped up the wider agenda by mental health initiatives from people like Prince William. Wellbeing principles need to be integrated early he advised – if so they can present limited cost but can make a big difference, he said. Indeed, said Henrietta Frater of the Crown Estate, wellbeing was a huge growth area – ‘’it used to be an HR issue, but now it’s a bottom-line issue’, she said. But work on physical space is only an improvement if a cultural change happens too. 

Things like improving air quality are proven to lift productivity, said Hero Bennett of Max Fordham’s, which has developed tools to think more broadly on this subject than various certification systems. Firms are looking for a differentiator more and more, she added. Arup’s Katie Wood said that her firm is seeing its clients think about wellbeing in terms of spatial configuration and the internal environment but also their experience at work, as well as the business case in terms of attraction and retention of staff. And London, she suggested, could consider it high up in the global rankings in this area, even if data is scarce as yet. It was important, though, said Booth, to get beyond the surface nods to wellbeing, the mere sales ‘gimmicks’ such as a ‘yoga room’ that is used once a week. ‘I think the wider principles of looking after your staff, valuing them and providing an environment for them that is heathy, and promoting exercise to suit ways of working – those things stick’.

A generation that understands this appears to be the millennials, a group that was one of the focuses in Future London – shaping a better city for all Londoners. These 20-somethings - or ‘avocado eaters’ as JLL’s Adam Challis characterised them as -may be understood, but perhaps not as much as we should. Challis showed research that made it clear that affordability is a key consideration, and that some 55% of 25-34 year olds are willing to pay more to live in the capital. They show a willingness to share property, interestingly in accord with the elderly, with loneliness there being a growing factor. But they believe that ‘planning in London is way behind the times’ and smaller units can be better if you get the services right. U+I’s Matt Sampson said his organisation has developed a product here towards ‘micro-living’ with a prototype built in its office but no local authority ‘brave enough to bend rules on planning.

 ‘Millennials want authenticity’, said Challis. ‘They just don’t trust us to give it to them’.

JLL’s Chris Ireland said that there is indeed an ongoing war for talent, with recruiting and retaining staff a huge challenge for every organisation. At JLL, sustainability appeared to be the emerging passion for a lot of staff, and Ireland was keen to stress a desire to widen the talent pool, getting more ‘diversity of thought’ into the business. But it was interesting that more staff were being recruited from away from the traditional surveying roots – from finance, tech, digital and sustainability backgrounds.

Mental health was another key consideration, said Ailsa Turnbull of G&T, with things like flexible working and peer to peer learning as potential helps. Argent Related’s Tom Goodall, meanwhile, said his main challenge in creating a new community at Tottenham Hale is to prove the success of Kings Cross not in terms of the amount of money they spent, but in its approach to placemaking and ‘joy’. 

Finally, there was a session on capturing value – transport related development, opening with Savills’ Rory Brooke showing the context on infrastructure investment and value growth from schemes like Crossrail 1. ‘For your average house owner’, he said, ‘seeing is believing. People tend to wait until infrastructure is open before factoring that in to increased house prices they are willing to pay. Commercial property owners will take a more sophisticated approach’

Even given the substantial costs of Crossrail 2, land value uplift is substantial, he added, around 100% more than its precursor, when it arrives. But a key point was about certainty, with developers not knowing about the planning gain they have to pay. 

TfL’s Peter Elliott said the organisation was ‘on the runway’ to achieving a target of 10,000 homes delivered by March 2021. But where historically buses have ‘killed retail’ they also deliver people so the organisation is concentrating on how bus capacity can help change parts of London. Schemes like the Bakerloo Line Extension can help considerably, though, said Kiran Chauhan of Southwark, putting the case for its ‘back the bid’ programme towards seeing it realised. And David Biggs of Network Rail said it was looking further into oversite development, working with Arup to ascertain which parts of central London could support it and the engineering solutions that might be possible. ‘When the railway is bringing about change’, he said, ‘the railway will bring about very significant change’.

Those were just some of the highlights of a packed programme of events at LREF on day one. Tune in tomorrow for a look at day two.

Visit lref.co.uk to see the full LREF programme or buy tickets.

David Taylor, Editor, New London Quarterly - @davidntaylor

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