London’s night-time economy is about to get a much-needed jolt from the opening of Printworks, SE16, a mega-venue that can hold 5,000 revellers. And as councils discover the social value of luring millennials out for a night on the town, the capital’s image as an international party destination is likely to glow in the dark
It’s 3pm on a Saturday afternoon and revellers are teeming out of Canada Water Underground station, a Monday-to-Friday destination associated more with corporate attire than clubwear. But this could be the dawn of a new era: Surrey Quays, SE16, in London’s East End is suddenly as buzzing as Shoreditch on a Friday night with the launch of the biggest nightclub in the UK capital.
With a capacity for 5,000 people spread across five acres in a 120,000 sq ft soundproof warehouse, the former Daily Mail printing factory, now known as Printworks, could put the stake in the ground for a reinvigorated after-dark culture in London.
British Land certainly thinks so. The developer, and freeholder of the site, made the decision to use the warehouse space as a club despite a flurry of high-profile venue closures over the past few years after London’s night-time economy was hit by rising rents and increased planning competition.
The question is whether it will be enough to convince investors – and a new generation of occupiers – that the capital’s club culture is alive, kicking and ready to give as good as its European counterparts.
THE CAPITAL’S 24-HOUR ECONOMY
Source: London First and EY
Nocturnal riches
London’s night-time economy contributed £26.3bn to the UK economy in 2014, according to research by EY, figure that is set to rise by a further £1.6bn by 2026.
The sector is still not without its challenges, however. There are rising property prices and rents – the latter of which have almost tripled in one of London’s best-known nightlife hubs, Shoreditch, from an average of £17 per sq ft in 2010 to £65 per sq ft in 2016, an increase of 181%, according to EY. And increased planning competition from other sectors such as residential and offices have resulted in swathes of closures.
In the past five years alone, the number of clubs across London’s 33 authorities has dropped by 50%. And of the 430 music venues that traded in the capital between 2007 and 2015, only 245 are still open for business, according to research by the London Assembly.
On top of struggles with rising rents, there is an argument that on a more social level these venues are simply not as popular as they once were. In an era of clean-living and well-being, members of the quieter, healthier millennial generation are more likely to stay in than go out, according to research by the Guardian newspaper. It found that 66.8% of millennials agreed that a night in was now preferable to a night on the town.
So would it really matter if this was reflected in the state of London’s after-dark scene? The short answer is yes, even if the impact was not felt immediately.
Nightlife is part of the wider fabric of a city, its culture and status. And as the UK prepares to leave the EU, London needs everything in its armoury to measure up to its European counterparts. Losing its after-dark edge could see it being bested by the likes of Berlin, Paris, and Amsterdam as the place to be for the next generation of residents, and occupiers.
“London is not just a city with banks and offices,” says Simon Tracey, chief executive of Vibration Group, the events company charged with overseeing the programme at the new Printworks club.
“It needs to be a culturally vibrant city that people want to live in. We need to attract the best people from across Europe. The last thing we want would be for people to start looking at other cities because they see them as more culturally interesting. It’s important that developers consider this, because nightlife attracts the life blood of the future.”
Faint stirrings in the darkness
Decisions such as British Land’s to go big on a night-time venue and Hackney Council’s decision to renew Shoreditch venue Village Underground’s lease in January could help to foster a nightlife resurgence. And other steps have been made: just six months ago Farringdon venue Fabric was battling to stay open, the Night Tube did not exist, Sadiq Khan was yet to appoint a night czar and plans for Printworks were still under wraps.
But challenges remain. Rising rents and business rates revaluations have had a huge impact on the industry, causing many venues to close where they can no longer afford the rent. Vauxhall’s Bar Code closed in 2015 after its rent more than doubled from £60,000 to £150,000 pa.
Other venues have fallen victim to rising property values, such that the value of property in certain areas has risen so steeply that it is deemed no longer commercially viable to keep venues on site. Turnmills in Clerkenwell, the first London venue to be granted a 24-hour licence, closed in 2008 when its lease ran out; the freeholder, Derwent London, secured planning permission from Islington Council to turn the world-famous venue into a six-storey office building.
Cable at London Bridge suffered a similar fate in 2013 when freeholder Network Rail took back possession of the popular venue to allow for the redevelopment of London Bridge Station.
Then there is the argument that today’s young, tech-savvy millennials (those aged 18 to 35), are less interested in a night out on the town. Last year the Office for National Statistics decided to drop the price of nightclub admission from the list of common goods and services to calculate inflation, stating at the time that it could “no longer justify” using it to represent consumer spending patterns.
Expensive door and ticket fees, the price of alcohol and taxis make a night out an expensive affair for the student-debt-laden youth of today. And then there is the fact that there are also fewer reasons for millennials to go out. Dating apps such as Tinder have redefined the laws of going out to meet people. Why bother going out when you can get a date at home from your iPhone? Millennials are also more health-conscious than previous generations, and if they do go out they drink less. A survey by Dutch brewer Heineken in 2016 found that on a night out, 75% of millennials will opt to drink in moderation.
Strict licensing rules also seem to act as a deterrent to a night on the town. Many clubs in London now shut at 2am, which is much earlier than the lawful hours of operation applying to European clubbing meccas such as Berlin.
Midnight persuasion
But all is not lost. It has become increasingly clear over the past 12 months just how valued London’s night-time culture really is. When Fabric had its licence revoked last year, subsequent online petitions to save the club raised £100,000 in four days. It went on to raise £333,618 and collected more than 100,000 signatures by the end of the campaign. As a result, the venue was allowed to stay open with stricter licensing rules.
Then Printworks opened. British Land has offered a lease for only five years, but Vibration Group will be running a series of cultural and art events as well as club nights in the space for the duration.
Ed Cree, asset manager for Canada Water at British Land, said: “The club nights are an important aspect and there will also be a huge amount of other programmes, including classical ballet and jazz as well as the club nights on Friday and Saturday.”
And it makes financial sense for the developer. It is working with Vibration Group on a turnover-based relationship for its use of the warehouse over the next five years.
Vibration Group takes full responsibility for the maintenance, security and running costs of the building and shares the profits with British Land.
British Land has the hefty maintenance for the building covered, generates value from an otherwise dormant site, benefits from a profile kick for Canada Water, all while it finalises the details of its masterplan for the area. In turn, Vibration Group gets the security of a five-year lease to ensure it lands the best events and acts for its programme.
British Land’s plan for the area includes 2m sq ft of shops and leisure space, and with a limited current offering, Canada Water is not yet a destination in its own right. People need to know about it for it to work.
Vibration Group’s Tracey says: “Canada Water is a destination that people are used to just passing through, so in terms of the people that go through it and then talk about it, there is a huge amount of value.”
Cree adds: “If a location becomes more prominent and acceptable, it becomes more of an attractive investment proposition, a bit like King’s Cross was 15 years ago when it was a downgraded area. Now it is more accepted and people feel more comfortable investing there.”
Keeping the candle burning
The news that Hackney Council decided to renew Shoreditch venue Village Underground’s lease in January was another chance for London’s clubbing community to rejoice. As the freeholder, Hackney Council considered development opportunities for the site but ultimately decided that there was better long-term value for the area and potential for investment in keeping it as a venue.
Mayor of Hackney Philip Glanville, who was pivotal in the decision, says: “We have to encourage landlords to think about the long-term sustainability of areas. The diverse nature of streetscape attracts people to buy in these areas, and if you preserve them they are then worth more to developers as they become less generic.”
While Brexit continues to dominate our newsfeeds, it is important that the message that London is open and ready for business is communicated across the globe. As well as attracting London’s future talent and keeping Londoners in London, protecting London’s night-time economy keeps it on the radar of foreign investors.
The British Property Federation has also been working to communicate this message and has been collaborating with the GLA to help others recognise the property industry’s role in preserving London’s night-time economy.
BPF chief executive Melanie Leech says: “Landlords and developers play a major part in ensuring that our capital is a vibrant, competitive world-class city for people to live, work and socialise. When places thrive and demonstrate potential for growth, investors will seek to explore opportunities to continue adding value. This investment must be encouraged because it will ensure we safeguard London’s future relevance and competitiveness.”
But the struggle between policymaking, planning and licensing to balance the needs of venues alongside those of residents and businesses is an ongoing issue and needs to be refined if London is to maintain its position as a 24-hour city and attract investment.
Caroline Atis, EY’s senior London partner, says: “The key to making the night-time economy act as a magnet to investment is to show that it does not lead to nuisance and anti-social behaviour.”
Progress towards this goal has already begun with mayor Sadiq Khan’s appointment of Amy Lamé as night czar and Fabric’s lawyer, Philip Colvin QC, as the chair of the Night-time Commission. Lamé has already begun speaking with planners and developers to try to mitigate these investment risks (see below).
On the morning after Printworks opened, the newspapers all celebrated it. Some even called it “London’s Berghain moment”. Berlin had better watch out.
LONDON NIGHT CZAR AMY LAMÉ TAKES LONDON’S NIGHT-TIME TEMPERATURE
Sadiq Khan’s appointment of Amy Lamé as London’s first night czar is a step towards balancing the needs of developers, planners, councils and local businesses and residents as well as protecting London’s cultural venues.
Lamé is working on bringing in new planning propositions to help developers and venues work together better. Speaking to Estates Gazette, she says: “If we want London to thrive as a truly 24-hour city, we need to open up the conversation about the opportunities and challenges each part of the industry faces. For too long it has felt like developers, councils and venue owners have been working to different agendas when really we all need a shared vision about how our night-time economy can work in all corners of the city, and for all Londoners and organisations across the industry.
Working with developers and local authorities to create best-practice guidance for developing and diversifying the evening and night-time economy in London is a priority. There are many planning initiatives that we think help to preserve London’s nightlife and character.
“Take the ‘agent of change’ principle, for example. If a cultural venue is in place before a residential development, the new development – as the ‘agent of change’ – is responsible for mitigating any potential noise that may affect new residents, for example by paying for soundproofing. Equally, if a cultural venue, as the ‘agent of change’, opens in a residential area, the venue is responsible for these works. We think this is a sensible and fair approach to helping venues to thrive while ensuring people can get a good night’s sleep.”
“Similarly, Camden Council is using section 106 to protect music venues on Denmark Street. New developments on London’s Tin Pan Alley will see at least two new venues; a large underground venue to replace the much-loved Astoria and a replacement for the 12 Bar, where Adele played her early gigs. This type of cross-industry working is key to unlocking London’s potential as a world-leading night-time city.
“In my first few months as night czar, I have had the pleasure of meeting many venue owners, businesses, developers and local authorities to see how we can work together and I’ve been encouraged by the conversations I’ve had so far. Businesses tell me that they are worried about rising rents, impact of noise on local residents and red tape, but they are also feeling very optimistic about the future.”
• To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @amberrolt or @estatesgazette
The bottom line: Rising rents and business rates revaluations have had a huge impact on the industry, as well as strict licensing laws. But it has become increasingly clear over the past 12 months just how valued London’s night-time culture really is.
PROPERTY’S POINT OF VIEW
Meet London's first ever #NightCzar pic.twitter.com/U2ChedoSEH
— Mayor of London, Sadiq Khan (@MayorofLondon) November 4, 2016
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