Mark Sayer-Wade, composer of theme tunes for TV shows including Who Do You Think You Are?, laughs loudly. The founder of music production company The Music Sculptors, which is based in Noho, W1, is amused at being asked whether he would move the business to Shoreditch, EC2.
“You must be joking! We have people in and out at all times of day and I wouldn’t feel safe. So, no, we would never consider it.”
A few blocks away, in Soho, W1, the response from Paul Shapiro, managing director of internet TV production company smartcom:TV is slightly different. At first, he says that proximity to partner companies in the West End is key but, after digesting the prospect of lower occupation costs further east, he concedes: “If rents are £20 per sq ft, we might consider it. That would be a massive reason to move.”
There are persuasive arguments from both sides about whether or not creative – or TMT (technology, media and telecommunications) sector – companies are likely to forsake the West End for the East End.
Knight Frank research shows a steady drip-feed to the east.
Partner James Roberts says that take-up has focused on the northern City fringe, particularly Clerkenwell and Farringdon, both in EC1: “TMT firms have taken 919,000 sq ft in these districts in the past five years – higher than Noho, at 808,000 sq ft.”
Quirkier buildings
At present, the biggest barrier to moving east is lack of availability – the quirkier buildings sought by TMT companies are in short supply.
Ivan Tennant, founder of Bethnal Green-based regeneration consultancy Plan Projects, believes that lack of coherent space planning is to blame.
“If the East End is to compete with the West End for creative industries it needs an east London-wide approach to regeneration,” he says.
In the meantime, well-respected investment and development names are moving east (see map).
Derwent London, a long-standing investor in the City fringes, has several developments in the pipeline, including a large scheme on Silicon Roundabout, EC1 (see p74).
And head of regeneration Simon Silver is pragmatic about future projects: “We’ll buy opportunities if they come up; if there is more value in EC1, we’ll go EC1.”
For some tenants, waiting for the right building in the East End may not be an option, although Soho is by no means guaranteed the catch instead.
Earlier this year, Stuart Melrose at occupier specialist Studley, searched in vain in Clerkenwell and Shoreditch for a 10,000 sq ft unit for US advertising agency Crispin Porter & Bogusky’s first European office.
“We simply couldn’t find the right product, so they went north – to King’s Cross,” he says.
The case for moving: East End is rising star
Shaun Simons of East End agency Hatton Real Estate. “There are three reasons why creative businesses will consider abandoning Soho for the East End. First, total occupation costs are considerably lower; typically they are £30-£35 per sq ft less than Soho for a 5,000 sq ft floorplate. Second, the quality of accommodation is improving as a new landlord base takes over from family-run, private landlords. Third, there is a ripple effect. Other companies have already moved here.” And the hurdles? “Some people have this idea of east London as a grotty area, but it’s not like that any more. It has good connections and excellent amenities.”
The case for staying: Soho is King
Tony Parrack, partner at West End niche agency Edward Charles & Co: “There hasn’t been a mass of companies leaving Soho and an exodus just isn’t going to happen. Landlords are upping the ante for a start. I’ve just done a lease renewal for a 5,000 sq ft floor at £30 per sq ft, and there is no way the occupier would consider going to Clerkenwell. Larger companies take 10-year leases and invest in their buildings – they’re simply not interested in moving. The disruption that will be caused by Crossrail is unlikely to persuade companies to head east. Occupiers will simply negotiate good deals and pay less rent during the disruption.”
Out-of-the-box retailing
Next month, what was supposed to be the world’s first pop-up mall is due to open in Hammerson’s and Ballymore’s Bishopsgate Goods Yard, E1.
Originally scheduled to open in August, delays to Boxpark, a collection of 60 shipping containers kitted out as trendy stores, has allowed an almost-identical scheme in Christchurch, New Zealand, to pop up first.
The temporary (five-year) scheme will bring top fashion labels such as Lacoste, Levis, Diesel, Dockers and Vans onto Shoreditch High Street at rents believed to be in the region of £70 per sq ft. Local agents see the opening as a continuation of a trend.
David Toubian of Patrick Susskind & Co says quirkier Mayfair retailers are now circling the area, and rents on Redchurch Street, E2, are hitting £90 per sq ft. “I don’t think it will end up quite like Bond Street, but we will get an eclectic mix of boutique brand and niche retailers,” he says.
In September, fashion label Margaret Howell signed for a shop on Old Nichol Street, just off Redchurch Street, and other retailers believed to be looking include Christian Louboutin, Vivienne Westwood, Quicksilver, Reiss and Sketchers.
The retail upturn goes hand in hand with increasing numbers of City workers flocking to the area to live, pushing values on Redchurch Street close to £1,000 per sq ft. Local agent Paul Belchak says: “There is always demand for residential space, driven by people who want to be close to their workplace.”
