As the glass sheathing around The Shard rises above the London skyline, the building has become a symbol of new growth emerging from the nightmare of the financial crisis and ensuing recession. In the worst days after the collapse of Lehman Brothers, some said that London was finished as a financial centre and global city. But steady progress towards the apex of The Shard's gleaming spire suggests otherwise. At 310m, it will be the tallest building in Europe, reasserting the UK capital's claim to power.
The Shard is also at the heart of the regeneration of London Bridge, an area on the fringes of the City that a few years ago had become distinctly tired. The new London Bridge Quarter will boast 40,000 square metres of top-quality offices, restaurants, retail and a Shangri-La hotel around a public piazza, all connected to one of the city's main stations. For a lucky few, there will be a chance to own London's highest homes in the sky, with floors 53 to 65 of The Shard fitted out as up to 14 luxury apartments, each at a price tag sure to be in the millions. The owners will be able to gaze out on an unprecedented cityscape from their glazed eyrie.
The Shard may be the most visible sign of urban renewal in London, but far more significant schemes are under way elsewhere — or waiting in the wings. Three years after everything ground to a halt, the regeneration wagon is rolling again — albeit with a tentative eye on the road ahead.
"The credit crunch picked out viable schemes from those that weren't viable," says Yolande Barnes, director of research at estate agents Savills. "Those that are getting going now have often seen a change in design or phasing to make them meet the new circumstances. The further they are from the central and prime areas, the more likely they are to have fallen by the wayside."
Ian Marris, head of the development consultancy at Knight Frank, says the dearth of debt finance is forcing developers to take a different approach to risk. "There's certainly an appetite for regeneration again, but it tends to be a capital intensive activity and so developers are striving to make it manageable, and mitigate their exposure at any one time," he says. "Instead of thinking 'bigger is better', they are having to think in some cases that 'less is more', which means developing in bite-sized chunks."
Regeneration will be less about automatically building high-density apartment towers, Marris predicts, and more about considering smaller scale schemes that could provide a better return. "One thing they will be looking for is to ensure early cash flow," he adds. The fundamentals have not changed: London has a dire shortage of new housing, prices are continuing to rise and overseas investors are willing to pump money into the UK capital as never before. Nor have the rules changed: successful regeneration means creating real places where people want to live, not just homes, and the closer to transport hubs and the more central your location, the better the chances of success.
So which areas are likely to emerge as the winners in the next stage of the regeneration game?
Stratford
September 13 sees the opening of the 1.9 million square-foot Westfield Stratford City, billed as Europe's biggest urban shopping centre — an event potentially as significant for the regeneration of East London as the Olympic and Paralympic Games themselves next year. The site will have more than 300 retail brands anchored by flagship stores from M&S, Waitrose and John Lewis, as part of a development that also hosts a 17-screen Vue cinema, and it will eventually offer 1.1 million square feet of office space, three hotels and more than 4,000 new homes, all on the doorstep of the Olympic stadium. Nearly three quarters of visitors to London 2012 will pass through the shopping centre, and its development has been accelerated to be ready in time.
The new Stratford, being constructed alongside the old on a vast former industrial site, "has the potential to be the most successful town within London" according to Charlie Hart, Knight Frank's partner for East London residential property. Westfield will be the main attraction, he says, drawing in shoppers from across East and North London and Essex. "The environment being created there could be exceptional," he adds. "It will be a great place to live."
Alone among regeneration projects in London, Stratford has benefited from vast sums of public money being pumped in, with the Olympics ensuring that momentum continued through the recession. It also has outstanding transport links, with two Tube lines, high-speed connection to St Pancras, and Crossrail due to arrive in 2017, by which stage there will be a train almost every minute to central London.
The main residential development to date has been a series of apartment blocks spanning the social to private sectors, which have already created a buzz in the area. The Stratford Eye, Athena, The Edge, Velocity and Aurora are some of the main mid- to high-rise buildings already on the market, a number of them overlooking the Olympic site.
The main thrust of residential development, though, will be after the Olympic Games when the Athletes' Village is converted into a combination of social and owner-occupier homes, and further housing is developed around the Olympic site, creating 16,000 homes in total. The Olympic Development Authority has already announced a shortlist of nine companies bidding for the right to deliver the 1,439 private homes in the Athletes' Village.
Cathy Low, project director for the Stratford Renaissance Partnership, says: "We're already seeing young professionals moving here and there is great value to be had in housing. Stratford really is a new part of the city of London, and the advantage it has is that it's well on its way."
Docklands
Nowhere has the face of London changed more dramatically over the last 20 years than in Docklands, and there's a huge amount of development still to come. The Royal Docks is a vast 650- hectare site offering some 13 miles of waterfront and 200 acres of water. So far it's home to exhibition centre ExCel, the University of East London, London City Airport and some limited housing. Regeneration has yet to achieve lift-off. As a vision document published last year acknowledged: "The area has yet to attract a five-star hotel or a top restaurant. Housing has been opportunistic, of variable quality and not supported by the range of local centres needed to create sustainable neighbourhoods."
Nevertheless, many believe that after years of waiting its turn, the Royal's time is about to come. The arrival of Crossrail in 2017 will transform transport connections to the area, while the Olympic Games will offer a one-off opportunity to showcase the potential of the Royal Docks to the world at large. A further fillip is that the Royal Docks has been made an Enterprise Zone, conferring a range of tax advantages to businesses and investors.
Robert Beasley, a spokesman for the London Development Agency, which owns the site (due to be transferred to the Greater London Authority next year), says, "We say to investors that this is the last great untapped development opportunity in London. By 2018 the DLR will run round the north and south sides of the site, and Crossrail will mean you can get to the West End in under 15 minutes."
And things are starting to happen. Siemens is investing £30m in a new sustainable technologies exhibition centre due to open in spring 2012. A developer is about to be appointed to build 600 homes next to the Gallions Quarter DLR station at Albert Basin. Barratt is busy selling the first of 777 new homes to be constructed at Waterside Park, beside the Thames Barrier at the east end of the Royal Docks. And the 50-acre Silvertown Quays development site — with planning permission for 4,390 homes, as well as retail, hotels and offices — is being actively marketed by Knight Frank.
Meanwhile, three further substantial Dockland sites are waiting to be developed between Canary Wharf and the Royal Docks: Wood Wharf, Leamouth Peninsula and Minoco Wharf. What's significant about all three of these is that the land is owned by Ballymore Group, an Irish developer that suffered its share of debt problems courtesy of the financial crisis. The company built some of the biggest residential developments at Canary Wharf in recent years — New Providence Wharf, Pan Peninsula and Baltimore Wharf — and is still busy selling the last of these, with a second phase tower yet to come.
James Barnes, sales director, says that the company's developments will go ahead with a new funding model supported by the Irish government. First off the blocks next year will be 1,500-home Leamouth directly across the river from the O2. "The idea is to create a stand-alone community," says Barnes. "It's almost an island, 80 per cent surrounded by water. It will be masterplanned community with the accent on providing everything people need, so a school may be included."
Minoco Wharf will be even bigger. Planning consent has just been given for the creation of what is in effect a new urban district with a network of streets and squares hosting up to 3,500 residential units in a mixture of houses, mansion blocks and apartments. The vision includes a new high street and town square with local shops, doctors, dentist, cafés, restaurants, nursery school, primary school and community hall.
Greenwich Peninsula
By summer 2012, there will be a new Thames crossing: a cable car carrying passengers across the river from beside the O2 arena to the Royal Victoria Docks. The project will provide up to 2,500 passengers per hour with spectacular views of the city from gondolas 160 feet above the river.
It will also help to highlight regeneration prospects at Greenwich Peninsula, a 190-acre site with 1.6 miles of river frontage that is set to provide 10,000 homes, 3.5 million square feet of office space and 150-plus shops and restaurants in the coming years. The peninsula has
been masterplanned into four distinct districts, with two developers, Lend Lease and Quintain, sharing the overall responsibility.
The peninsula is already home to the Millennium Village, an early residential development, plus Ravensbourne College of Design and Communication, as well as Transport for London headquarters and the iconic O2 arena. Development of residential schemes is also starting to speed up. Bellway was the first to receive planning permission and its City Peninsula scheme comprising 229 homes at the southern end of the Peninsula is now virtually complete, with the first residents due to move imminently. One- and two-bedroom apartments are available from £269,950.
Quintain has vowed to accelerate development at Greenwich and later this year will begin marketing a first phase of 600 homes at Peninsula Quays, many with spectacular views across the water to Canary Wharf. Yolande Barnes at Savills says: "We reckon Greenwich Peninsula is the next scheme to succeed after Canary Wharf as it is just one stop away on the Tube, and has good viable riverside sites."
King's Cross
In September, 4,500 staff and students from Central Saint Martins College of Art & Design will have a new home in a former Victorian goods building behind King's Cross station. It's the most significant milestone to date in a regeneration scheme that stalled during the recession in spite of its proximity to central London.
King's Cross Central is a 67-acre site in the hinterland behind King's Cross and St Pancras stations that was once goods yards serving the rail freight industry. It is being developed by a delivery partnership of developer Argent, London & Continental Railways and DHL. The scheme plans to provide some 2,000 homes, as well as 650 student accommodation units, half a million square feet of retail and 3.4 million square feet of offices in 23 buildings. It will also include 20 new streets, ten major public spaces and the restoration of some 20 historic buildings.
Spokeswoman Emma Cassidy says: "During the recession the partners decided to invest £150m in a huge amount of new infrastructure. They have built bridges over the Regent's Canal, built a new energy centre and got all the plots ready and waiting."
Work has already started on affordable homes — 900 out of the total — and planning permission has been given for the first phase of 'open market' homes, a building of 114 private and 29 affordable homes by architects dRMM, which will begin construction in the autumn. The homes feature some innovative environmental features including connections to King's Cross Central's low-carbon district heating system, sliding louvre panels to provide solar shading, photovoltaic panels, a cycle parking space for every apartment and a brown roof.
Further residential development at King's Cross Central will include apartments in the listed former gasholder structures, currently undergoing restoration.
Nine Elms
When the US Government announced in 2008 that it was planning to move its embassy from Mayfair's Grosvenor Square to a new site in Vauxhall, it's fair to say there was a degree of incredulity. The location at Nine Elms was described by one commentator as "a semi-industrial, wind-blasted wedge of arterial roads and zero amenities" where nobody would choose to live.
The reason for the US Embassy relocation is driven by security and the need to establish a cordon sanitaire around the embassy building. But it has also delivered a huge boost to plans to regenerate a stretch of the south bank of the Thames from Battersea Power Station to Vauxhall Bridge.
The Vauxhall Nine Elms Battersea Opportunity Area comprises a massive 482 acres in all, which the Greater London Authority wants to see turned from an industrial site to a mixture of uses, including 16,000 new homes. It's early days still but some of the land will be furnished by the demolition of the existing 57-acre New Covent Garden fruit and vegetable market and its replacement on a new site.
Two of France's largest construction companies, Bouygues and Vinci, are bidding for the right to control development of a new quarter there, called The Garden, after Barratt dropped out. Another key scheme in the area is Riverlight, a five-acre riverside site that developer St James is turning into upmarket apartments, a hotel, a Clubhouse and other facilities.
The US Embassy site itself has been provided by Ballymore, which sold five acres to the US Government and plans to develop the surrounding 15 acres into Embassy Gardens: a new 'embassy quarter'. "Due to the amount of real estate the US Embassy needs around it, there will be a big green zone there, including gardens that aren't accessible by road," says James Barnes of Ballymore.
The company is planning to build 2,000 homes there starting in 2013, and will launch the scheme next year. "We may sell to some of the embassy staff, as well as investors who will rent properties to them," says Barnes. "But the real opportunity is that this will be a new district for London very close to the centre."
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