The Future of the West End02 Jan 2019 // Insights
We take a look the West End's future as a place of commerce in our West End Business Monitor.
Over the next five years, respondents predict that office space will continue to form most of the West End (selected by 57% of respondents). They also expect to see a heavy concentration of retail stores (19%) and residential property (18%). The West End is currently one of the largest job markets in London, with 155,000 people employed in the district. This figure includes 49% in professional service and 24% in retail, which indicates that the balance between West End office and retail space is not expected to change much in the next five years.
Home House’s Andrew Richardson believes change in the West End has been slow but very positive. “It has diversified from its office traditions to have a strong retail and residential offer,” he comments. “We’re now starting to see what are effectively ‘mini-villages’ located in the area, with the return of more independent shops mixed into residential spaces. This ensures that more people are staying in the area and utilising the space.” These ‘mini-villages’ include Portman Village, a cluster of boutique and independent shops and cafes between Upper Berkeley Street, Seymour Place and Gloucester Place.
‘Gentrification’ has been a recent buzzword for much of London. It refers to the transformation in the character of an area, including a change in the retail make up and rising property prices. The West End too is experiencing this process in parts. For example, the narrow streets of Soho are now dominated by trendy bars, restaurants and boutiques, rather than the unconventional outlets it was once known for. Stephen Fry has chaired the Save Soho campaign since 2014, which fights to preserve the area’s traditional character. Beyond Soho, Wigmore Street, historically dominated by commercial and retail premises (including a 19th-Century ironworks) is now dominated almost exclusively by high-end kitchen stores.
Looking ahead to the future, Penny Alexander says, “we want to build a really strong retail offering, of good quality in the Baker Street and Marylebone area of the West End. We have an engaged worker and resident audience, and if we serve these well, it will draw in a wider London audience.”
Westminster Council has an ambitious plan to transform Oxford Street, with a proposed spend of 150 million on more pedestrian space, while maintaining two lanes of traffic along the length of the street. The original plan to fully pedestrianise the street drew concern from local residents, who didn’t want traffic diverted into the nearby streets.
The plan to transform Oxford Street speaks to the West End’s identity as the heart of London’s retail offering, and the desire of stakeholders for it to remain so. 600,000 people visit Oxford Street every day, 30% of whom come from overseas. Together, they spend a total of £9bn across the major shopping streets of Oxford Street, Regent Street and Bond Street.
Westminster Council’s Place Strategy and Delivery Plan identified 94 projects across 85 streets in nine zones, including proposals for major improvements at Oxford Circus, Marble Arch and Cavendish Square. This amounts to a massive £150m investment, with consultation on the proposals lasting until 16th December 2018.
The Council says that “through ongoing engagement with residents, businesses and visitors, it’s clear that an effective and funded maintenance and management plan will be required to ensure that the District remains a key destination once the improvement works get underway. This plan will tackle issues such as rough sleepers, closely working with the police and pooling council resources regarding anti-social behaviour. It will also cover street cleaning, repairs and city-wide policies on busking and redouble efforts to see support for the changes in law to regulate pedicabs.”
The future of travel in the West End is a key concern, with current issues ranging from slow-moving traffic, and gridlock to air pollution. However, projects like the Elizabeth Line could alleviate some of the pressures, with alternative travel routes drawing even larger numbers of visitors to the West End. Although the exact timeline is the subject of debate, it’s clear that transportation is a sector where many are expecting radical, disruptive change in the future.
Haddon believes there are a number of things that the West End needs to address as it transforms over the next ten years. “The evolution of the car – how this will change the public realm, and fundamentally, buildings themselves. How we promote more sustainable modes of transport, such as cycling – these are all issues that will shape the West End in coming years,” he says.
Home House’s Andrew Richardson sees the current ‘growth of the entrepreneur’ as a transformative force in the area. Entrepreneurship has created a ripple effect of change across multiple sectors, especially the property industry, which has had to respond to changing business practices. “More and more people don’t require a fixed office space, instead they are looking at more flexible working options – for example, we have seen people working from Home House.”
Although less than a fifth of employees in most West End firms (69%), work remotely, 48% of respondents expect this figure to increase in the next five years. Advances in technology will be the main driver for this transformation in working practices, cited by 50% of respondents. Flexibility is also a key driver, with 47% of businesses expecting an increase in remote working for the flexibility it offers employees — a valuable retention tool for the future.
Helen Crossland, Head of Employment at Seddons, agrees. “Organisations risk being left behind if they cling to traditional practices while those around them invest in technology and smarter, leaner working methods. The economic benefits of having systems in place which work, and which enable employees to perform their duties from home, a hot desk or coffee shop are undeniable.” However, Crossland also observes that many employers are not ready for, and are still battling with, the concept of flexible working and that cultural and trust barriers prevail. “Some organisations, owing to the nature of their business, do not have the luxury of being as versatile as others.”
For businesses who can and want to offer flexible working practices, it’s vital to plan for the practicalities and secure advance buy-in at all levels. The right technology and infrastructure is crucial, as is having communication systems in place that reach all employees regardless of where they are. “Critically, employers also must learn to trust employees to do what is required of them when ‘out of sight’ and manage those who take advantage of such trust,” Crossland adds. “We are in a period of transition which some businesses will navigate better than others. Employees meanwhile, are now expecting as standard flexibility in their work arrangements and businesses risk losing good staff and future talent if they are not alive to this.”
British Land’s Tim Haddon has also observed a growing shift in the variety of businesses located in the West End. “The change in leasing practices means that there is more flexibility in the type of companies that locate here – it’s no longer just big corporations, there is a strong concentration of independents and smaller firms,” he says. “They’ve also been driven by the improved connectivity links and wealth of retail and leisure in the area.”
This diversification of business types will bring further changes to the West End beyond the commercial property sector. As well as becoming more open to flexible leases and working practices, West End businesses are also looking at alternative funding sources. Over a fifth of businesses surveyed (21%) said they were planning to use different sources of finance in the future. The most popular (by some margin) was crowdfunding. Although only 2% of businesses we surveyed currently use crowdfunding platforms, 38% are considering it as a source of finance in the future, indicating the business community in the West End is innovative, confident and forward-looking.
Kyle Irvine, Head of Corporate at Seddons, challenges the common perception that crowdfunding solutions are the sole preserve of innovators and start-ups. He comments “we are also seeing them being deployed at later stages of the business cycle, to fund growth or specific projects. Once seen as an alternative to bank borrowing, more banks are now looking favourably at crowdfunded businesses, particularly those that are consumer facing rather than B2B. The fact of a successful fundraising campaign is taken to demonstrate the viability of the business in question.”
To read the full report, click here.
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