When Crossrail opens in 2019 it will put East London just an hour from the Thames Valley, so does that make it commutable for tech talent living west of London? John Miu, senior operations manager at ABP, which is developing a £1.7bn scheme in Royal Albert Dock, E16, seems to think it does, but should those working in the Thames Valley be worried?
Speaking at EG’s Thames Valley Question Time he acknowledged that the area is the digital heart of the UK, but said that occupiers have choices; they can have a base in London and a base elsewhere, and Crossrail will bridge east and west.
“The rent is almost equal between Reading and east London and cost of occupation is about the same, therefore there is a lot of synergy – it would be a win-win situation,” he said.
However, not all the panel agreed. Guy Parkes, director of advisory firm RARE, was quick to discard the idea that workers would live in the Thames Valley, but commute to London. “Why would they want to do that? It’s about lifestyle – they don’t want to go into central [London], they want be based here close to housing stock and amenity – it isn’t perfect, but it is improving and becoming more London-esque.”
Speaking after the event, he also said he would be surprised if any occupier left the Thames Valley for east London.
Landid development director James Silver suggested Reading’s proximity to London actually made it more attractive as a business location than other UK markets. “I was talking to some graduates who failed to get places in London, but the big reason they chose Reading is it is close to the capital. You can be in this area three days a week but also link back to London and the mothership.”
While Crossrail may be a double-edged sword, the Thames Valley’s business parks face their own set of challenges: staying relevant at a time when work and labour demands are changing. Business park owners have been working hard to introduce different uses, with on-site amenities for tenants and public transport links.
Barton Willmore director Peter Newton said a varied and diverse offer of space was needed for a flourishing market. “From a design point of view, there are a whole range of organisations that need very specialist premises and it is very difficult to house those science and tech companies in town centre locations.
“Although they are in the same competition for the talent pool, the business park offer gives much more flexibility to design-and-build and they can also cluster more effectively with incubator units springing out of academic organisations.”
A CHANGE OF HEART ON DEVOLUTION?
At last year’s question time when the panel were asked about whether there would be a devolution deal for the Thames Valley they laughed at the prospect of getting the various local authorities in agreement. Since then six new mayors have been elected in England and prime minister Theresa May has hinted that government priority will be given to those regions with devolution deals.
So has it made a devolution deal more likely?
“I feel the system is working pretty well as it is actually, said James Silver, development director at Landid. “Slough Council has been behind us for our big scheme next to the station, for example.”
Tim Smith, chief executive of the Thames Valley and Berkshire LEP added there was no appetite from local political leaders for devolution in the region.
“We do a good job with what we have got, but I don’t think anybody would say it isn’t a fragmented system and it isn’t hugely frustrating. But would the investment, time, effort and taxpayers’ money justify whatever increase in output we would achieve?”
Despite this, he is concerned about the government’s prioritising funding to areas with devolution deals. “We compete for central government funds through a growth deal. Take the Western Rail Link: I am really concerned about this project. It now costs £2bn and that money isn’t there – where will that bill fall? Who pays? Increasingly I worry about cost of infrastructure and how it won’t be delivered.”
And John Miu, chief operating officer, ABP, thought there were advantages to devolution: “From a business perspective, things get done much quicker having a more straightforward decision timetable and control over local funding rather than going back to central government…Also as a developer, planning is quicker – there are benefits in a business sense.”
‘LANDLORDS MUST ADAPT’
Guy Parkes, director of RARE, said landlords will need to adapt their buildings “as a service rather than a structure” to meet the demands of employees who are driving property decisions.
He said: “One thing that wasn’t touched on enough is how occupiers are reacting to different styles of office stock. There is much more choice in the market and that is what tech companies are looking for. That much more flexibility gives a bit more resilience to change shape as the market evolves.
“In terms of Brexit, it hasn’t hit the market in the Thames Valley in the way you would expect. We are seeing more and more deals, but seeing smaller deals as bigger companies are being a bit more cautious.”
THAMES VALLEY QUESTION TIME PANEL
■ James Silver, director, Landid
■ Peter Newton, director, Barton Willmore
■ John Miu, chief operating officer, ABP
■ Guy Parkes, founding director, RARE
■ Tim Smith, chief executive, Thames Valley Berkshire LEP
Thames Valley Question Time is in partnership with: ABP ■ Willmott Dixon ■ RARE ■ Landid
In association with: UK Property Forums
To send feedback, e-mail Shekha.Vyas@egi.co.uk or tweet @shekhaV or @estatesgazette
