Stanhope chief executive David Camp tells Alex Daniel what drew the developer to the north for the first time – and where else he would like the company to expand.
A £1.5bn business district devoted to the growth of science and technology is nothing if not ambitious. Built over 26 acres and promising 4m sq ft of space, ID Manchester has been pitched as a place to help answer “some of the greatest challenges we face as a society in the 21st century”. It is just down the road from where scientist Ernest Rutherford first split the atom in 1917, and a stone’s throw from where University of Manchester researchers discovered and developed graphene. The scheme will have a lot to live up to.
That means pressure but also big potential for Stanhope, which last month was named ID Manchester’s joint development partner alongside Legal & General-backed Bruntwood SciTech.
When EG catches up with Stanhope chief executive David Camp, he strikes a modest tone. “I don’t want us to take all the glory,” he says. “There is no way we would have piled in there by ourselves. It is very much us being invited in by Bruntwood, which obviously knows the Manchester market back to front.”
He does, however, acknowledge that his colleagues have brought “quite a lot of value” to the scheme.
That value comes from experience gained over more than a decade of building major projects in the space. Stanhope is already several years into a redevelopment of part of the British Library, at the heart of London’s Knowledge Quarter in the borough of Camden; it has completed much of its life sciences-orientated White City Place development in west London; and it is part way through a new medical technology cluster next to St Thomas’ Hospital.
And it is not just Stanhope’s own expertise that drew Bruntwood to the London developer. Allies and Morrison, the architecture firm that masterplanned Wood Wharf, the eastward expansion of Canary Wharf, is a notable example of the type of adviser that Stanhope brought with it to the project.
“ID Manchester has got fantastic potential, especially being in partnership with the university, which is one of the big research-based institutions in this area,” Camp says. “But there is a team of advisers who have come into it who are partly people we work with and partly people [Bruntwood] works with. So we are effectively one of the team, rather than leading the project.”
Life sciences real estate is enjoying a boom. Some £15bn of investor capital is aimed at it, JLL calculates, and with the pandemic sparking a new wave of interest in biomedical research, that figure could rise further. For companies like Stanhope, which has established itself as one of the leading names in the sub-sector over the past decade, the trend presents a sizeable opportunity.
Nonetheless, Camp is again characteristically cautious on the immediate prospects for life sciences real estate more broadly. “I think the market is getting a bit overheated,” he says, referencing the sudden buzz around the sector as a result of the pandemic. “Life sciences is undoubtedly a big growth area. But we are still trying to be cautious and specific in terms of where we go and what we are trying to create.”
Northern expansion
Camp joined Stanhope in 1987, four years after it was founded and a year after it embarked on its name-making development of 4m sq ft of commercial property across 29 acres of land at Broadgate by Liverpool Street station in the City of London.
Stanhope still specialises in large, complex “masterplan” projects in the capital. And although its focus has shifted from the city centre to more fringe areas, it has remained one of a handful of go-to London developers for high-spec, usually office-led projects that not many others could pull off. That is why its move towards Manchester – its first project outside the South East – might have taken some by surprise.
As Camp sees it, the move is a natural next step given the limited amount of land in London for the kind of projects Stanhope likes to take on. “The thing we like most of all is the big projects where you can create your own ecosystem, tying in with the local community and businesses to create something of value for everyone,” he says. “But there are only so many of those you can do in the London area. So if there are very substantial projects in other key cities, that is definitely something we would look to expand into, provided it plays to our strengths.”
He points to Birmingham, where local authorities recently launched consultations on a major new city plan incorporating multiple central redevelopment schemes over the next two decades. “If we could buy into a scheme in Birmingham that suited us and was, for example, close to key public transport nodes, that is something we would look at,” Camp says.
However, the move is not a precursor to “a major charge out of London”, he adds. “We would not just go up to Manchester for a 100,000 sq ft project. It is more the case that if we found another significant occupier-led scheme that fitted the bill for us, we could be tempted out.”
Wellness at work
The company still has plenty on its plate back in London. Among other things, it is working on White City Place, which has involved repurposing the BBC’s iconic Television Centre office building in west London, as part of the broader £8bn, 110-acre regeneration of the surrounding area. A chunk of that was bought by Cadillac Fairview for £250m last year, but Stanhope still expects the second phase – mainly residential and offices – to stretch well into this decade.
Stanhope is also pushing on with Ruskin Square, a major redevelopment in the centre of Croydon. That scheme, designed by Foster and Partners, will eventually provide 625 new homes, 100,000 sq ft of restaurants and shops and 1.25m sq ft of commercial space in the south London hub. It includes two major new office buildings, one for HM Revenue and Customs and another for the Home Office. The first, totalling 200,000 sq ft, is already finished, the second 330,000 sq ft block due for 2023.
Despite its foray up north, then, Stanhope’s credentials as a London office developer remain very much in place – albeit with a slant towards mixed-use projects. And like its peers, it has been carrying out extensive research into what occupiers will want if and when the world returns to normal after the pandemic.
“The feedback we are getting is that most businesses still absolutely want a core building for their team to be able to work together,” Camp says. “They definitely want them to be near a mainline station, because increasingly employees don’t want to get off the train and then have to go on another tube or bus. And they definitely want a focus on wellness; people want more enjoyment from work, that is definitely important.”
So far, so “new normal”. But how does a developer plan for the future of the office when it remains steeped in uncertainty? Camp says it is by thinking about the worker, rather than the tenant. “Our buildings need flexibility, so that we can provide tenants with what their employees want – because primarily it is all about the war for talent. Going forward, office buildings will need to be adaptable, and enable a range of workplace uses.”
Secondly, he continues, developers should be wary of what he calls “superficial trends”. And number one on his hit list right now is terraces. “It’s the usual thing. One building has x terraces, so the next building has to have x-plus-one terraces. Before you know it, you have exponential growth,” he says. “But then you have the problem that most of them are pretty unpleasant and unusable. Occupiers start to think: ‘I’m never actually going to use these.’ So what’s the point?”
Stanhope will not be deterred from its primary goal: building office-led neighbourhoods from the ground up. These, Camp says, will also help it deliver on ESG targets. “It is much easier to deliver on the ESG agenda where you have actually created your own public realm,” he says. “We don’t want to put a load of amenities in one building, which are probably a bit dull and probably will not be used. It is much easier to bring in the local community, to have a real social interaction part of it, when it is all part of a broader approach.”
In short? Stanhope is sticking to its guns. That way, it hopes the rest will fall into place.
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