SPRING 2019 £5.70

Londoninvestor guide

CITIZEN KHAN “It’s not a battle with developers”

THE POWER OF WE WeWork on why nothing matters more than members

GAME PLAN How e-gaming could take retail to the next level

GO LONG Reap the rewards in the capital’s up and coming fringe districts

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PUBLICATION CONTENTS I LONDON INVESTOR GUIDE

Emily Wright, editor

At arm’s length Sadiq Khan is engaged with the sector. At least, that’s according to the man himself. But as another MIPIM conference is set to come and go without an appearance from the mayor of London [at the time of writing], the property industry would be forgiven for having its doubts. “It’s not a battle with developers,” insists Khan in our interview (p32). Good to know. But while it might not be a battle, that does not automatically mean it will be a collaboration. The mayor says his demands on developers, including a 35% affordable homes requirement on all new housing development – with the goal to increase this to 50% – and more recently plans to bring in rent controls, are working. But as the economic environment toughens and his targets become increasingly difficult to hit, does the property industry feel WeWork: the space invader the same way? Mary Finnigan, WeWork’s head of real estate transactions for EMEA and , talks about why Also in this issue we speak to WeWork is not a real estate company, how the business works and why nothing matters more than WeWork’s head of transactions for real its members page 26 estate Mary Finnigan (p26). Following news that the co-working giant signed two more sites at the start of the year at HIGHLIGHTS 21 Soho Square, W1, and 77 Leadenhall Street, EC3 we find out more about the firm’s upcoming plans for 2019 both here in London, across the UK and beyond. We also study the data and analysis on why connectivity has knocked location off the top spot when it comes to the value of London’s office Beyond the fringe At arm’s length buildings (p6), and don’t miss the latest The outer city hotspots that are catching the We talk to Sadiq Khan about his relationship news on US co-working firm Convene’s eye of developers looking to invest page 20 with the property industry page 32 plans to enter the London market (p50).

CONTENT AT A GLANCE Making the connection Beyond the fringe Game face As occupiers increasingly opt for connectivity London’s outer city hotspots page 20 Could e-sports be the new saviour of the high over location, how does it affect offices?page 6 street? page 38 The space invader What’s next for London retail? WeWork on why it isn’t a property firmpage 26 Enfield’s best of British Changes in consumer behaviour are dictating Why is back in flexible offices? Sarah Cary discusses her new role at Enfield the value of shops in the capital page 12 It has returned with a new operation page 30 Council page 46 Slicker cities At arm’s length Introducing the future of co-working Can technology streamline London’s planning Sadiq Khan on his ongoing relationship with US start-up Convene is heading for London process? page 16 real estate page 32 with some interesting ideas page 50

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Spring 2019 3 NEED TO KNOW I DIGITAL BUILDINGS WESTEND61/REX/SHUTTERSTOCK

Spring 2019 6 MAKING THE CONNECTION Occupiers are increasingly favouring connectivity over location, according to Radius Data Exchange and WiredScore data. So what does that mean for the future of London offices?

Spring 2019 7 NEED TO KNOW I DIGITAL BUILDINGS

Finance and professional firms make up the lion’s share of occupation in the non-digital comparison buildings

Graham Shone we matched all of those just a 0.3% and 1.6% difference sectors – Radius Data Exchange Head of offices research buildings with similar in average rent respectively. figures indicate that typical here are few things with neighbouring premises In the maturing areas, rents on new deals for TMT more power than digital without an accreditation for however, the contrast is much tenants are 26% below those Tperformance when it connectivity. Comparing rental starker. In the City Fringe, digital for financial occupiers, and 8% comes to adding to the value data on new deals over the buildings command rental below those for tenants in the of a building. And now it past five years between them values that are 9.6% higher than professional sector. appears that connectivity has showed that, on average, the comparative premises; and Finance and professional crept higher up the list of space was being let for 4.7% the highest variance comes on firms make up the lion’s priorities for occupiers than a more in what we will call the the South Bank, where a 15.2% share of occupation in the long-standing factor that has “digital buildings”. bump was seen. non-digital comparison been so crucial: location, Crucially, the age of the buildings, commanding 21% location, location. premises is removed as a skew Tech, media and telecoms firms and 19% of the let floorspace Radius Data Exchange factor in this, with more than Looking at the tenant respectively. Surprisingly, figures show that occupiers half of the comparable composition of digital serviced office operators are likely to pay 5% more in buildings being either the buildings, it’s not surprising to command a larger share of rent for London office space same age or younger than see that tech, media and occupied space in non-digital with strong connectivity than their WiredScore-rated telecoms companies take the buildings than in those with a for similar space without a counterparts. largest share, with 30%. In connectivity rating. guarantee of high digital Certain areas across London non-digital premises, that Therefore, removing both performance. appear more sensitive to this share decreases to 14%. the age of the building and Looking at 65 office phenomenon, with the City Traditionally, TMT companies the type of tenant attracted to buildings across central Core and West End not have preferred cheaper office the premises as potential skew London with at least a showing a great deal of space than their counterparts in factors, the digital buildings certification from WiredScore, variance in rental tone, seeing other dominant occupier can be said to have performed

Spring 2019 8 AVERAGE UPLIFT IN LONDON OFFICE RENT: DIGITAL BUILDINGS v NON-DIGITAL

MIDTOWN CITY FRINGE 9.3% 9.6%

CITY CORE 0.3%

WEST END 1.6% DOCKLANDS SOUTH BANK 5.9% 15.2%

OCCUPIER FOOTPRINT: DIGITAL BUILDINGS v NON-DIGITAL

FINANCIAL SERVICED OFFICE OPERATOR

11.1% 20.9% 17.8% 6.4%

INSURANCE PROFESSIONAL 5.8% 0.5% 18.8% 9.2% IMAGEPLOTTER/REX/SHUTTERSTOCK INDUSTRIAL & MANUFACTURING exceptionally well in attracting higher rental tone. 4.1% 4.4% VARIOUS OTHER BUSINESS TYPES Improving user experience Connectivity and technological enhancements are clearly key RETAIL & LEISURE factors in occupier decisions – as reflected in theCBRE 2018 16.6% 20.1% 3.7% 4.6% EMEA Occupier Sentiment Survey, which indicated that a focus on improving user experience and wellness PROPERTY driven by the deployment of TMT technology will be a strong 3.4% 2.8% focus for businesses moving forward. Some 62% of respondents to 14.1% the survey said they planned to 30.2% CONSTRUCTION increase their investment in real estate technology over the 1.5% 4.0% next three years, and it is widely anticipated that this trend will continue when the Current footprint % – comparable buildings Current footprint % – WiredScore buildings next set of occupier survey results arrives in April this year. Source: Radius Data Exchange

Spring 2019 9 Supported by Supported by Media Partner

Programme curated by Programme Partner NEED TO KNOW I RETAIL

WHAT’S NEXT FOR LONDON RETAIL? How and where people shop is having a huge impact on the capital’s retail space. The biggest challenge now could be what to do with it. James Child crunches the numbers

Spring 2019 12 RAY TANG/LNP/REX/SHUTTERSTOCK RAY

Spring 2019 13 2013 2014 2015 2016 2017 2018

applications in London vs London Rest of UK Rest of UK Amount of space vacated due to NEED2400 TO KNOW I RETAIL CVA's in London (2018 to date) 2200

2000

1800 South East

1600 Yorkshire & Humberside 1400 North West 1200 South West 1000 London 800 West Midlands 600 North East 400 Scotland 200 East Midlands 0 2013 2014 2015 2016 2017 2018 East of Wales London Rest of UK Northern Ireland

0 2 4 6 8 10 12 14 16 18 20 Amount of space vacated due to CVA's in London (2018 to date) Average days on the market before occupation

South East

Yorkshire & Humberside 350

North West 300 South West

London 250 West Midlands

ANDY RAIN/EPA/REX/SHUTTERSTOCK ANDY 200 North East

Scotland he rapid structural Online spending has now Figures150 from Radius Data Analysis shows that 30% changeEast in Midlands the retail sector breached the one in every five Exchange show that London is of that space was vacated in is having a significant pounds spent in retail level, not immune from these trials London and the South East. T East of England 100 effect on London’s real estate, peaking last November at and tribulations. With the traditional levels of as changes in consumerWales 21.5%, a record high according UK store closures reached supply and demand altered, 50 behaviourNorthern begin Ireland to dictate the to the Office for National dizzying heights last year, shops that become available value of shops in the capital. Statistics. with 18.2m sq ft of space are now taking even longer to 0 2 4 6 8 10 12 14 16 18 20 Shopper habits and The advent of smartphones being0 shuttered owing to let than before. expectations have changed and the domination of Amazon administrations,2013 company2014 2015 The2016 average2017 time taken2018 for a immeasurably during the have challenged the existing voluntary arrangements and shop to be relet in the capital pastA decade.verage days on tnorms.he market restructuring. is up by 15% since 2013, taking before occupation Retail spend online AVERAGE NUMBER OF DAYS ON THE MARKET BEFORE OCCUPATION RETAIL SPEND ONLINE

350 22%22

20%20 300 18%18 250 16%16

200 14%14

12%12 150 Number of days

10%10 100 8%8

50 66%

0 44% 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Spend online Source:R Radiuseta Datail Exchangespend online Source: Radius Data Exchange

Spring 2019 22 14 in London & South East Pipeline of new retail space in3500000 London & South East

3000000 Pip3500000eline of new retail space Pip3500000eline of new retail space in2500000 London & South East 3000000 in 3000000London & South East PIPELINE2000000 OF NEW RETAIL SPACE IN LONDON & THE SOUTH EAST 2500000 35000002500000 m sq ft 150000035000003.5 2000000 30000002000000 100000030000003.0 m sq ft

m sq ft 1500000 25000001500000 50000025000002.5 1000000 20000001000000 020000002.0

m sq ft 500000 2019 2020 2021 2022 1500000500000 m sq ft 15000001.5 0Proposed New Space Under Construction Permitted Extension 10000000 1000000 2019 2020 2021 2022 1.0 2019 2020 2021 2022 500000 Proposed New Space Under Construction Permitted Extension Re5000000.5taProposedil ch Newa nSpacege oUnderf u sConstructione plannPermitteding Extension

ap0plications in London vs Re0 tail ch2019ange o2020f use p2021lanning2022 RReestta oilf cUh2019Kange o2020f use p2021lanning2022 appProposedlica Newtio Spacens inUnder Lo Constructionndon vPermitteds Extension appProposedlica Newtio Spacens inUnder Lo Constructionndon vPermitteds Extension

2400Rest of UK RETAILRReets aCHANGEti lo cfh U OFaKn USEg ePLANNING of us APPLICATIONSe planni n g IN2200R LONDONetail VSch THEan RESTge OF o THEf u UKse planning 2000 a2400pplications in London vs 1800a2400pplications in London vs 2200 1600R2200est of UK R2000est of UK 14002000 1800 1800 12002400 1600 Some 18.2m sq ft of retail space was shuttered in the UK in 2018 100024001600 2200 1400 80022001400 2000 1200 the best part of 11 months to extension is the clearest 20001200 6001800 be occupied. example of landlords curbing 1000 18001000 The increasing vacancy rates physical growth to suit 4001600 Number of applications 800 2001600800 and slower occupancy times conditions, but reinvesting in 1400 600 have seen a surge of planning prime locations that are still 01400600 1200 applications for change of use, attractive to consumers. 400 1200400 2013 2014 2015 2016 2017 2018 1000 converting retail premises to London itself is safeguarded 200 1000200 other use types. from the worst of the retail 800 0 London Rest of UK crisis at present. Its large 8000 600 2013 2014 2015 2016 2017 2018 Slight slowdown population and tourism mean 600 2013 2014 2015 2016 2017 2018 In London, the data shows that footfall is always high in 400 400 London Rest of UK that applications for the prime locations. A200mount of spaLondonce vaRestca oft UKed due to conversion of space slowed With the demolition and 200 C0 VA's in London (2018 to date) slightly in 2018 after significant repurposing of real estate 0 REGIONAL2013 BREAKDOWN2014 FOR2015 STORE CLOSURES2016 2017SINCE 20182018 rises in the previous five expensive, and land in very Amo2013unt o2014f spa2015ce va2016cated2017 due t2018o years – more than doubling short supply, we can expect to Amount of space vacated due to in number, and following the see an increase in residential CVA's in LonLondondon (2Rest0 1of 8UK to date) CVA'Souths i nEast LonLondondon (2Rest0 1of 8UK to date) national trend throughout the elements to existing shopping rest of the UK. centres in the capital. Yorkshire & Humberside The retreat of bricks-and- One in three schemes in AmouNorthn tW estof space vacated due to South East mortar retail has been clearly London already has plans AmouSouthnt Eastof space vacated due to South West indicated by the construction for residential development, CYorkshireVA '&s Humberside in London (2018 to date) Yorkshire & Humberside CVA's Londonin London (2018 to date) pipeline for new space in which could create an North West North West London. additional 10,000 homes. West Midlands South West Although more than 8m sq We no longer need as South West NorthSouth East East ft of new retail stock is in the many shops, and the biggest SouthLondon East London pipeline to be delivered by challenge in the future may Yorkshire & HumbersideScotland Yorkshire &W Humbersideest Midlands West Midlands the end of 2022, construction well be what to do with them. EastNorth Midlands West NorthNorth W Eastest activity has slowed, and many With the click-and-collect North East East ofSouth England West scheme extensions have been market estimated to almost SouthScotland West Scotland parked in light of the uncertain double by 2023 and the need LondonWales East MidlandsLondon conditions in the sector, as well for more urban logistics hubs, East Midlands NorthernWest Midlands Ireland as the unpredictable economy. perhaps the empty shop EastWest of Midlands England East of England ’s decision does have its place in the North East0 2%2 4%4 6%6 8%8 10%10 12%12 14%14 16%16 18%18 20%20 NorthW Eastales Wales to postpone its Brent Cross community after all. Source: Radius Data ScotlandExchange NorthernScotland Ireland Northern Ireland East Midlands Average da0ys2 on4 t6he8 m10ar12ke14t 16 18 20 East Midlands 0 2 4 6 8 10 12 14 16 18 20 Spring 2019 East of England East of England 15 before oWcalescupation NEED TO KNOW I TECHNOLOGY

SLICKER CITIES Is software the answer to streamlining London’s convoluted planning process?

boroughs, improving dialogue not just street level. Bringing and promoting closer 3D visuals into the pre- collaboration with project planning stage can save teams. But this is just the start months of discussions, and with technological eliminates the risk of advances much more is misunderstanding and adds Jamie Holmes, chief executive, possible. context. VU.CITY VU.CITY’s software platform It is also being used in the enables technical and creative later stages of the planning echnology is the key consultants to work together, process for public to a faster, efficient and designing and illustrating consultations and by planning Tmore democratic development plans in 3D committees, making visualising planning system. within an accurate developments much easier Planning is too often representation of the for professionals and lay expensive, slow and fallible. streetscape. Design changes people alike. The system can be viewed can be tested quickly and with suspicion by the public feasibility assessed much The wider context and hampered by the earlier in the process, reducing But where it is having the most complexities of politics. But as the time and cost of numerous impact is in helping to populations grow, urban iterations. Furthermore, it understand the effect a density increases and housing makes creating images and development has on the wider Virtual modelling allows you shortages bite it has never testing different viewpoints far area. At planning committees to show how the development been more important. quicker and easier. where 3D modelling is used will change an area and what The planning process Currently, it is a laborious the focus shifts; questions are that change means, which is a requires clear and detailed process, often involving not only about what a scheme powerful tool. It can be used information from multiple someone physically walking looks like but also about its to help remove suspicion at sources. It needs strategic the streets to take impact and wider context. Two public consultation and help thinking and imagination, as photographs. One London planning enquiries in Tower generate positive well as the ability to persuade development required 80 Hamlets were won with the engagement. – all of which present their pictures to cover all angles and help of VU.CITY’s 3D It also means you can open own challenges. viewpoints – more than half modelling platform because up consultations to a wider Software development and were to demonstrate that you they enabled expert witnesses audience, putting interactive artificial intelligence are couldn’t see the building from to give a much clearer and 3D visuals online or even in an already having a tangible a particular position and reasonable argument for app. Personal experience of impact on all stages of the several others that the effect densification. public consultations shows that planning process. Technology was marginal. And when you start the wider the audience the is already starting to help Accurate 3D modelling plugging different data sets more balanced the views. streamline planning, making it enables this job to be done into the model, such as Having access to more quicker and less expensive. more quickly, cheaply and sunlight, traffic and pedestrian detailed information and in a We have seen this ourselves efficiently, creating a detailed flow, you can assess the impact clearer manner is also a step with the adoption of VU.CITY visualisation that can be of multiple variables at the on the road to building trust. by the majority of London viewed from every window, same time. But could we take that one

Spring 2019 16 VU.CITY’s software platform designs flexible 3D development plans step further and democratise better meets the needs of the anything that helps reduce risk that for the Square Mile. the planning process? community. in development and takes Collaboration will further If we can determine how a Plugging in additional data away some of the uncertainty benefit the modelling city is going to change then sets – Land Registry, listed has got to be beneficial to the platform and our aim is for we can involve not only the buildings, demographics, speed and delivery of existing tools such as public design teams but also help the Section 106 proposals and development. consultation platforms public visualise and transportation, to name a few In the short term, the goal is Commonplace and Built ID to understand the wider impact – help people to see the to grow the number of cities be able to plug into VU.CITY. of a development from the bigger picture. covered by VU.CITY beyond This is about shared outset. We can create a tool London, Manchester, information and opening that is accessible to all and Reducing risk Birmingham, Brighton, Belfast access on a variety of different allows people to view In the longer term a and and increase the levels to ultimately generate different simulations and collaborative tool could accuracy. Currently VU.CITY is more timely and relevant comment at a much earlier enable a different sort of accurate to 15cm at roofscape, development. stage. narrative between developers making it the most accurate London and growing cities Development and and local authorities in which large-scale model of its type in around the world need to be regeneration proposals appropriate use is determined the world. We want to develop sustainable, enjoyable places therefore become more before land acquisition. It that level of accuracy for the to live and work and an transparent, the public is would facilitate more accurate facades within the 3D model to efficient and transparent included earlier in the process pricing and create a level make it even more realistic and planning system plays a big and can even help shape the playing field. Of course, it have secured Innovate UK part in that. VU.CITY offers the plans into something that wouldn’t work in all cases but funding in order to do just Smart City Platform for that.

Spring 2019 17 ANALYSIS I LONDON FRINGES

HAYES THE HOTSPOTS IN AND AROUND £387,178 LONDON Average house price -0.20% House price % annual increase, Dec 18 vs Dec 17 4.70% Gross average BTL rental yields SLOUGH £329,205 BEYOND Average house price -1.20% House price % annual increase, THE FRINGE Dec 18 vs Dec 17 As London property prices continue 4.50% to rocket, developers are looking at Gross average BTL rental yields the outer city hotspots for investment opportunities READING £369,800 Average house price for capital appreciation and Anna White yield have direct access BRACKNELL entral London’s to London and its talent -0.70% prolonged and pool, new or due transport House price % annual increase, Cunfettered reign as the infrastructure and a town Dec 18 vs Dec 17 £357,861 darling of global real estate upgrade on the way. Average house price investment has come to an Crossrail took the baton end. For now. from the Olympic Park-led 4.80% In the aftermath of the regeneration of east London Gross average BTL rental yields -0.40% global financial crisis it had as the investment story of the House price % annual increase, mass appeal as a safe haven past decade in the UK, and is Dec 18 vs Dec 17 for international wealth and still running with it. the place to live for domestic The £15bn high-speed buyers. railway (the Elizabeth line) 4.60% But in the run-up to the will stop at 41 destinations Gross average BTL rental yields Brexit deadline the main from Reading in Berkshire players are opportunist through central London to funds picking off small sites Shenfield in Essex and has from developers in financial driven the transformation of difficulty where plans or urban centres such as Woking construction have stalled. in Surrey and Tottenham Court wanted to benefit from house therefore drive up rents Meanwhile, in the Road, W1T. price inflation have long for landlords at that point. mainstream market The investment arc for a moved in. Another investment institutional investors, private project such as Crossrail starts The final investment phase indicator is a “forward- buy-to-let landlords and long before the tunnelling is still to come. Each location thinking town council” that has owner-occupiers are scouring machines appear. Early land will see an influx of renters upgraded retail and leisure the city fringes and beyond speculators wade in when when the service finally runs around transport hubs, says for up-and-coming investment plans are first approved (now due in autumn 2019) Cushman Wakefield’s Chris hotspots. (flipping to housebuilders), as this property tribe does Lewis. He cites Reading and serial property investors not benefit from living near Bracknell. “These towns give Investment indicators buy off-plan and sell on, the Elizabeth line before you a welcome when you step The most compelling locations and those homeowners who it launches. Demand will off the train,” he says.

Spring 2019 20 THE CENTRAL LONDON COMPARISON BANDS LUTON WEST END THE CITY £240,100 Average house price £1,195,474 £720,500 0.20% Average house price Average house price House price % annual increase, -0.70% -0.90% Dec 18 vs Dec 17 House price % annual increase, House price % annual increase, 6.00% Dec 18 vs Dec 17 Dec 18 vs Dec 17 Gross average BTL rental yields 2.90% 3.60% Gross average BTL rental yields Gross average BTL rental yields

ROMFORD £422,665 Average house price 0.70% House price % annual increase, Dec 18 vs Dec 17 4.90% Gross average BTL rental yields

SEVENOAKS

WOKING SOUTHALL CROYDON £348,001 Average house price £438,300 £389,516 £384,000 Average house price Average house price Average house price 0.80% House price % annual increase, -0.10% -0.30% 0.30% Dec 18 vs Dec 17 House price % annual increase, House price % annual increase, House price % annual increase, Dec 18 vs Dec 17 Dec 18 vs Dec 17 Dec 18 vs Dec 17 4.80% Gross average BTL rental yields 4.50% 3.90% 4.50% Gross average BTL rental yields Gross average BTL rental yields Gross average BTL rental yields

Average house price – source: Zoopla UK Cities Index. House price % annual increase – source: Zoopla UK Cities Index. Gross average BTL – source: Cushman & Wakefield

The arrival of big occupiers Valley town. The London spread London,” says Nick Whitten, suggests Reading is still a Lewis’s pick of the M4 Although all investor tribes – director – UK research at JLL. safe bet for investment as corridor, however, is Slough. from housebuilder to office Lewis agrees: “London its talent pool expands and “It has great connectivity occupier to homeowner and is the engine room of UK workers choose to live there, already and will benefit from tenant – are looking beyond commerce, with the highest generating more trade for Crossrail but the town centre the capital for yields and house quality of workforce, but it has local businesses. The average and retail offering have some price growth, the preferred just got expensive, pushing office rent is £38.50 per sq ft way to go,” making it ripe for locations are still reliant on commercial and residential compared with £67.50 in the attention. London. “The next wave of property investment into the City and £110 in the West End. So, which other fringe towns investment in the South East is fringe towns, in turn driving Virgin Media has committed are making their own case for still headed for places within regeneration across the to 120,000 sq ft in the Thames investment? the sphere of the influence of South East.”

Spring 2019 21 ANALYSIS I LONDON FRINGES

Romford Sevenoaks

Buy-to-let yield: 4.9% Buy-to-let yield: 4.8% The combination of The most popular destination Crossrail and constrained for people moving out of housing supply has driven London is Sevenoaks in Kent, up house prices in according to recent data from Romford, in the London . This borough of Havering. It is has not escaped the attention surrounded by green belt of developers. Crest land and, despite the flow Nicholson closed its central of young families coming London office last year and out of London, its has opened one in construction pipeline is Sevenoaks. One consultant dominated by one‑and told EG that a handful of two-bedroom flats. major national housebuilders “New build here is geared are focusing on Kent. towards the first-time buyer The county is also set to and investor,” explains benefit from the biggest road Sevenoaks: first choice for people moving out of London

Andy Redman of . infrastructure project since STANDARD/REX/SHUTTERSTOCK PHILLIPS/EVENING BARRY “The retail mix is not right the M25 was carved around in the town either,” he says. Greater London. The congestion across the whole Hertfordshire and has a good “There are retail investors 14.5-mile, three-lane dual of the easterly commuter belt. mix of affordability, access to worried about the high Lower Thames Crossing will “The Lower Thames London and choice of street who are building connect the M2 at Rochester Crossing will bring more schools,” says Nick Whitten, homes on top of units to and the M25 in Essex housing supply as plans are director – UK research at JLL. spread their risk. The next between North and South for new homes to track the Berkeley Homes has a few wave of investment in Ockendon and includes a route,” says Redman. The apartments remaining in its Romford needs to be a 2.4-mile tunnel between proposal is out for public Ryewood development by retail upgrade and leisure Gravesend and Tilbury. It is consultation. the Sevenoaks Wildlife facilities.” expected to halve the journey “Kent is cheaper than Reserve. Prices start from And it’s coming. The time northbound along the some of the other Home £279,995 and help to buy is mixed-use Bridge Close Dartford Crossing and ease Counties such as Surrey or available. scheme will deliver 1,000 homes, commercial space, a new primary school and will open up the river path, Southall of land (old utility sites) and Southall is currently giving direct access to the the imminent arrival of cheaper than neighbouring nearby Crossrail station. A Buy-to-let yield: 3.9% Crossrail that has piqued areas Brentford, Greenford £25m funding package is Southall in the borough of investor interest. and Heston and has been being ploughed into the Ealing is one of the few Once the Elizabeth line is predicted by to new Sapphire Ice and untapped locations in London running through the Southall become one of the highest Leisure development – part with a considerable Crossrail interchange it will price-growth areas in London of the council’s masterplan. regeneration journey to take only eight minutes to get as the vast Ealing Barry Jessop, director of come. It has a clapped-out to Heathrow, 13 to regeneration spreads. developer First Base, says: shopping centre and some Paddington and 24 to There’s a ready-made “Romford is a major market local shops but it’s the supply Liverpool Street. employment market, says town in its own right and is property consultant Jack reported to be the Ballantine. “Aside from fourth-largest retail centre Crossrail, the Heathrow in London. It has a very expansion is set to create good catchment, a natural 40,000 jobs locally. There are footfall and a high level of also a number of leading surrounding wealth, but the hospitals in the area that town centre and retail offer provide for an already strong have been neglected. With workforce.” such strong demographics, The first developers are along with a revitalised breaking ground and over town centre and the arrival the next three years locals will of Crossrail, we expect to see 3,500 homes springing see high levels of growth.” up from developers Change is due to sweep Strawberry Star, Redrow and across the north of Essex Berkeley Group, to be built following a proposal for alongside the existing three garden communities, Victorian terraced houses. which will deliver 43,000 “Southall is on the cusp of homes. change,” Ballantine adds. Southall: on the cusp of change BEN ROWE/REX/SHUTTERSTOCK BEN

Spring 2019 22 LONDON FRINGES I ANALYSIS

Luton

Buy-to-let yield: 6% Luton in Bedfordshire ranks as the best commuter destination in and around Greater London by efficiency of train service combined with reasonably priced housing – the average property price is £253,988. The Luton Investment Framework has sunk £1.5bn into regenerating the town centre with the delivery of hundreds of new homes, shops and restaurants, creating 18,500 new jobs over the next 20 years. The airport is expanding and house prices have risen 22% since 2015. Nick Leeming, chairman Croydon : connections count of Jackson- Stops, believes Luton will continue to outperform Croydon: connections count

London: “With the HARDING/REX/SHUTTERSTOCK BOWMAN/ROBERT CHARLES Bedfordshire town benefiting from significant Croydon borough. It has the fastest- into 290 flats. The new inward investment over the growing tech cluster in the Westfield shopping centre next 20 years, we expect Buy-to-let yield: 4.5% capital and 10,500 homes in will increase its appeal and Luton to continue being a Recent research from estate the pipeline. construction, leisure and new key spot for commuters, agent Portico has named Croydon is undergoing a occupiers should create and investors alike,” he says. Croydon as one of the top 10 £5.25bn regeneration plan 23,000 new jobs over the LU2ON by Strawberry investment hotspots within led by developer Boxpark. next five years. Star Homes is a new Greater London. This New-build schemes include It’s also well connected 6.8-acre development on message is echoed in the Saffron Tower and Surrey – the train takes 14 minutes to the former site of the local plan, which dubs House and the refurbishment Gatwick Airport and 17 Vauxhall Motors factory. It Croydon London’s growth of the historic Nestlé Tower minutes to London Bridge. will deliver 785 studios, one- and two-bedroom apartments, with private roof gardens and a 24-hour Hayes concierge service. Phase one (400 flats) is due to be Buy-to-let yield: 4.7% completed in 2021. Hayes in west London is benefiting from the build-to- rent boom on the outskirts of the city. Residential developer HUB has just completed the 189-unit Material Store with 26 triplex apartments. It’s part of the wider industrial-to-residential conversion of the old Vinyl Factory, is a short walk to Hayes and Harlington Material Store, Hayes Crossrail station and has a children’s playground, party planning for 118 new looking for better-value rooms and communal residential units and accommodation with quick terraces. commercial space. links into the city. These will of has started “Tenant appetite for the course only improve once the groundworks for its new rental apartments remains Crossrail is completed,” says a 88-home site, while strong, both for residents spokesman for developer Homes has submitted moving locally and also those EcoWorld. The Mall, Luton

Spring 2019 25 ANALYSIS I CO-WORKING

THE SPACE INVADER It’s the rapidly growing, rapidly diversifying real estate disruptor that’s still making huge losses and doesn’t call itself a property company. But WeWork really does think “the customer is king”

Samantha McClary

eWork is a bit like Marmite. There are Wthose who love it and there are those for whom it leaves a bitter taste in their mouths. But love it or loathe it, there is no denying that it has caught the headlines over the past few years and has encouraged others – in the , at least – to direct their focus just a little bit more towards the needs of the customer. Here, Mary Finnigan, WeWork’s head of real estate transactions for EMEA and Australia, talks about why WeWork is not a real estate company, how the business works and why nothing matters more to the business than its members. But first, let’s take a quick look at the growth of WeWork. From a standing start in in 2010 (or 2008 if you include its predecessor, Green Desk), the firm, which started life as a co-working

Spring 2019 26 KRIS TRIPPLAAR/SIPA USA/REX/SHUTTERSTOCK TRIPPLAAR/SIPA KRIS

Spring 2019 27 ANALYSIS I CO-WORKING space provider, has grown into a flexible workspace provider with some 10m sq ft worldwide and much more besides. Indeed, the recent change of name from WeWork to the We Company is a reflection that it is no longer just a space provider. A quick Google will soon show you how far the tentacles of WeWork – or the We Company – now reach. The firm, with help from the $6bn of investment from Japan-based Softbank, has acquired a whole range of businesses over the past nine years, from architecture firm Case, which uses 3D scanning to help design buildings, to coding academy Flatiron and community building platform Meetup. The We Company now brings its WeWork flexible office space, co-housing business WeLive and educational business WeGrow together with one aim: “To create a world where people work to make a life, not just a living.” Those words, from founder Adam Neumann, are definitely not the words of a real estate business founder. It is a nice idea, though. And while the mission is yet to have made the We Company a profit (latest figures showed a $1.6bn loss for the first nine months of 2018), it is a mission those within the company relish. “Our passion is providing our membership base with the best possible experience within the WeWork The WeWork brand reaches Seoul community,” says Finnigan. YONHAP/EPA/REX/SHUTTERSTOCK “It’s an obsession,” she adds later, “with member experience that informs all The notion of a customer suggests a separation between the provider aspects of the business.” and the end-user, whereas we are part of the same community. Our Focusing on the end-user – the customer or the member members are talking to each other as much as they are talking to us – has become the hottest trend in real estate over the Mary Finnigan I WeWork past 18 months. While “customer is king” has long base is its end-user. To the We Company’s products – are provide all of the space, the been a slogan in the service wider real estate community, part of its growth story. By technology, the services and industry, as “space as a it is the occupier or end being so close to its members, facilitate the network for our service” becomes one of the customer. But that word WeWork says it is able to react member businesses to grow most overused slogans in “member” is important to quickly to their wants and and to be successful. property circles, the customer WeWork. Not just because desires and deliver without “To me the notion of a has started to polish off her it fits with the current trend, any fixed expectations. customer or a tenant suggests crown in the real estate but because to the company “WeWork is a global a separation in terms of industry. it means that the users of community platform,” explains approach between the WeWork’s membership its spaces – and all of the Finnigan. “Which means we provider and the end-user,

Spring 2019 28 and create, to work to create a life, not just a living. The idea behind the brand and the ethos of it makes complete sense in a world that will no longer tolerate bland places to work, in a world where talent attraction and retention is second to making a profit for companies all around the world. The model, however, has not, does not and may never have the full support of the entire real estate community. Indeed, it has spurred plenty of the major players either to invest in rival flexible office space players (think Blackstone and and Brookfield and Convene) or develop their own offerings (think and Storey and Landsec and Myo). More recently it has seen Mary Finnigan: “We are best in class at operating and activating space”

ED TELLING TELLING ED PHOTOGRAPHY some landlords walk away from leasing deals, with a deal between Worthington Group and the company for 45,000 sq ft at 125 Deansgate in Manchester collapsing after the landlord raised concerns about how the brand could affect the value of the building. Whether WeWork likes to admit it or not, it has disrupted the office space market. And like Marmite, not everyone will like that – and not everyone in real estate will want to work alongside the new, flashy kid in town. Finnigan remains optimistic, though. “I think the industry does recognise that we are best in class at operating and activating space,” she says. “More and more value will be Adam Neumann: “People work to make a life, not just a living”

MARK LENNIHAN/AP/REX/SHUTTERSTOCK MARK ascribed to the operation and activation of space as time whereas for us we are a been between individual outward-looking, to be goes on, so we are here to platform, we are all part of entrepreneurs and SMEs, speaking to the creators or the partner with those who want the same community. Our today it is between those designers within our that experiential offering in members are talking to each groups and some very large community and to be feeding their buildings. other as much as they are global players. Players such off each other in terms of “There has been a deep- talking to us.” as Microsoft, GoPro, , ideas.” seated shift in the way that Finnigan says WeWork’s Deloitte and Bosch to name It stinks of utopia, doesn’t it? people work and I think that, network of members is but a few. These members – A place where companies big irrespective of what happens becoming an ecosystem in enterprise members, as the and small can come together with the economy, that shift is its own right, with company We Company labels them – so that people can collaborate not going away.” surveys showing that half of now make up some 30% of the its members are transacting WeWork community. EG Property Podcasts together and 70% are talking “The reason they are to each other or collaborating attracted to WeWork is that Listen to the interview with WeWork’s in some way. they don’t want certain parts of head of transactions of EMEA and And while nine years ago their employee base to be so Australia, Mary Finnigan, at that collaboration between inward-looking,” says Finnigan. www.estatesgazette.podbean.com members might have “They want them to be more

Spring 2019 29 ANALYSIS I OFFICES

WHY IS LANDSEC BACK IN FLEXIBLE OFFICES? It’s first attempt failed but that has not stopped Landsec from re-entering the market with Myo, a new operation that allows businesses to create and expand their own workspace

Louise Dransfield before the arrival of Apple’s best possible day at work. experiences, without it being andsec has ventured into first consumer iPhone. Knight How do we remove the hassle over the top. the flexible office market says: “From a technology both from [the business] taking “I think it’s fair to say the Lfor a second time, more standpoint, we have to new office space and from the British don’t do enforced fun than a decade after its first understand how much the day-to-day user in that space.” and there is a time and place attempt failed. world has changed in that This all-encompassing where you have got to get on Myo – from “make your time.” service includes just a three- with work as well. So I think own” – offers customised page agreement document there is a fine balance offices for businesses needing Working differently and offers super-fast between curating a space and space for between 15 and 80 He adds that the concept of connectivity as well as IT overdoing it.” people on leases ranging from flexible office space back then support and a concierge He adds: “The co-working 12 months to three years. It will was more “plug and play service. sector generally has a bit of a also offer formalised space”, which was typically But don’t expect the beer on reputation for densification subletting, so that businesses fitted out in a generic form. In tap that was at one time and a lot of talk about can rent bigger space to grow comparison, he argues, today offered in WeWork’s office hospitality but not necessarily into. people work differently, and spaces – or the reported delivering day to day – and we The operation is headed by business leaders are under mandatory 4pm Friday happy are looking at that in detail to Oliver Knight, who has been at more pressure to offer better- hours at WeWork’s own make sure we are going to Landsec since 2014, first as its quality workplaces to attract headquarters. deliver. leasing and sales director and and retain the best people. Knight says: “We will be “It’s the little touches such as then as its investment director. Knight says: “Myo is more covering the obvious things towel service that will make a Landsec’s first flexible office all-encompassing than such as refreshments and big difference.” business, Landflex, was Landflex. We are thinking making sure we have different Myo will open its first venue launched in the early 2000s about how we give people the days with different at 123 Victoria Street, SW1,

Spring 2019 30 The first Myo will open at 123 Victoria Street, London SW1 in April across 36,000 sq ft in April At present, Landsec has a total and Knight says it is already office portfolio spanning “in negotiations with a few around 6.5m sq ft and has a parties on terms”. development pipeline of around 2m sq ft across Event space London, including its recently Within the space, Myo will also acquired site at 25 Lavington offer six meeting rooms – of Street on the South Bank, and which two can become an it is looking to bolster this event space, owing to further. movable walls. This will be The company is understood offered to Myo members as to be in the running for well as external customers. another five-acre site south of Landsec will look to the River Thames, near incorporate Myo within its Waterloo. future developments. It could However, for now, Landsec also occupy any space that needs to get it right at becomes vacant in its 123 Victoria Street so as to developed portfolio. compete with long-time and Knights adds that Landsec dominant operators such as is also well-positioned in terms WeWork, as well as fellow of balance sheet and financial property firm British Land, fire power should it wish to which set up a similar business buy assets specifically for Myo. Flexible space can be used for events in 2017.

Spring 2019 31 ANALYSIS I SADIQ KHAN

AT ARM’S LENGTH Mayor of London Sadiq Khan says developers understand the need for affordable housing targets. But, with economic uncertainty ahead, should he do more to engage with the property sector? Emma Rosser asks him where he stands on his ongoing relationship with real estate

is predecessor could not get enough of the Hreal estate community and was a regular at MIPIM, but Sadiq Khan, just over two years into his four-year tenure as London mayor, has never been to the annual get together of the real estate community. And he won’t be going this year either. His communications with the property industry, the sector will tell you, have been few and far between, with the face-to-face meetings handed over to deputy mayors Jules Pipe and James Murray and the Greater London Authority’s executive director of housing and land David Lunts. So EG spoke to the man himself to find out exactly where he stands on property.

Housing targets Whether the sector agrees or not, Khan believes that there is strong collaboration between the mayor’s office and the industry, and that his demands on developers to

Spring 2019 32 ROB PINNEY/LNP/REX/SHUTTERSTOCK ROB

Spring 2019 33 ANALYSIS I ROUNDTABLESADIQ KHAN XXXXXX XXXX

Khan, Michael Bloomberg (left) and architect Norman Foster (right) tour the site of the new Bloomberg HQ in the city of London in 2017 deliver affordable housing are working. The problem is that the macroeconomic situation – uncertainty Those demands include a 35% affordable homes around Brexit – is leading some developers to pause when it comes requirement on all new to starting to build other sorts of homes housing development – with the goal to increase this to 50% – and more recently plans target I have set is 14,000 fell by 32% in 2016-2018, a homes,” he says. to bring in rent controls. affordable starts, and we’re drop of 40,000. “The reality is that all of on track to meet that those in the real estate Smashing records as well. We’ve got to be Uncertain times industry want to make a “We’re not on track [to breaking records.” Khan admits that it’s not going profit, and there’s nothing deliver on affordable housing According to London to be easy, especially with wrong with that. We are targets], we’re beating it,” Assembly figures, there were those targets increasing to saying to developers that Khan tells EG, enthusiastically. 2,400 starts in the six months 17,000 next year and 116,000 the quid pro quo of you “The target last year was to to September 2018, meaning in total by 2022. getting permission to build start building 12,500 genuinely that there is still some way to “The problem is that the these homes you want to affordable homes. I’ve go to hit that magic 14,000 for macroeconomic situation – build and make profit on is made it hard for myself – the March 2019 target. Indeed, uncertainty around Brexit – is that a significant number 12,500 starts would have EG revealed in February that leading some developers to should be genuinely been a record. We’ve smashed the number of consents for pause when it comes to affordable homes.” that record. This year, the all new homes across London starting to build other sorts of His solution to affordable

Spring 2019 34 The newly elected mayor arriving at City Hall on his first day, in May 2016 TOLGA AKMEN/LNP/REX/SHUTTERSTOCK TOLGA

Khan’s predecessor Boris Johnson addresses MIPIM in 2014. Khan has yet to attend the event BEBERT BRUNO/SIPA/REX/SHUTTERSTOCK BEBERT GUY BELL/REX/SHUTTERSTOCK GUY delivery, he says, is “I see more of that teamwork affordable workspace, with So, while Khan himself may collaboration. And he insists going on between the launch of the Creative not be engaging with the real that he and his two deputy developers, those in the real Land Trust. estate sector, there is no mayors, Pipe and Murray, are estate industry, councils and The Trust will seek to deliver denying that he is engaging in engaging with the industry. City Hall. Because it’s in all our 1,000 affordable workspaces his own right. “The good news is, it’s not a interests to make sure we meet for artists and creatives at rents He is confident and battle against developers,” he London’s housing need.” of just £15-19 per sq ft. aggressive in his demeanour. says. “Most developers get it. He adds: “We need to And he will need to be, as he What I’ve been impressed by make sure that we get Creative thinking will almost certainly have a lot is the willingness of more assistance from the Khan is certain that the to battle with during the final developers to work with us.” government, in the form development community will two years of his current tenure He points to the rising of grants and financial get behind him. as mayor. proportion of affordable assistance. But also changing “I don’t believe that His affordable targets will homes being delivered as an the law around land assembly someone who wants to be increasingly difficult to example, growing, he says, to make it easier for us to build homes in London reach as the economic from 13% in Boris Johnson’s build the homes we need.” doesn’t realise the importance environment gets tougher. last term to 38% today. Alongside his demand on of having good communities, And with another no-show at developers to deliver and the reality is that one MIPIM this year, whether his Working together “genuinely affordable” homes, of the reasons London is sidekicks will really be able to “That’s developers working Khan this week upped his an attractive place is because get an under-pressure real collaboratively with us, not us pressure on the real estate of our creative sector,” says estate sector on side remains threatening them,” says Khan. community to deliver the mayor. to be seen.

Spring 2019 35 British Land is using Radius Data Exchange to get a real-time view of the market faster.

British Land is a leading UK commercial property company focused on high quality retail and London offi ces, with £16.8bn of assets under management.

TATKEI LO Tat-Kei Lo, Strategy Associate, supports its Strategy Associate, British Land Places People Prefer strategy.

He spends his day analysing market trends, identifying lucrative opportunities and building investment arguments to present to British Land’s Investment Committee. He tells us how Radius Data Exchange’s instant view of the market is critical to this work. CASE STUDY

How does a typical morning start for a strategist How important is it that agents are now sharing their with British Land? data electronically? The core of my job is researching sector performance, so I Data should be in real time. Consider stock market data, it’s start the day by checking the news. so much more powerful in terms of live updates. You get audit rates almost immediately. I get the high-level view of the market from Radius Data Exchange and saved searches alert me to particular topics. It would take more than a week to call multiple agents, have detailed conversations and aggregate I then take a deep dive into articles related to markets that that data myself. I am currently analysing. Many articles reference data, so I use that and the commentary to build my arguments. With Radius Data Exchange, I get the answer in one or two hours and can act on it immediately. The more up-to-date The morning is all about acquiring information of the data, the sooner I know how to adapt my approach. strategic importance. What else do you consider to be strengths of Radius How do you use Radius Data Exchange to Data Exchange? assess opportunities? It’s one source of data that’s comprehensive and easy When a sector is of particular interest to British Land, I look to use. into what the underlying market trends are on the occupier side and examine general market conditions. It’s also very DIY and quite unique in that way. I really like how visual the interface is and the interactive map. For example, take our co-working, serviced-offi ce offer. I It makes it easier to get the story of a particular area faster. assess how the sector’s landscape is changing in London and the opportunity this presents for British Land. The detailed building histories and planning information are also very useful for supporting case studies. The transactional data in this area is where Radius Data Exchange really comes in handy. I’d recommend the service to anyone else working in a strategic real estate role. What can transactional real estate data tell you? It tells you things like how short and long-term leases in a sector change over time. If we take a 10-year look back at leasing transactions smaller than 5,000 sq ft, we can see that occupiers are looking for smaller places but not fi nding the quality of space they require. This presents a signifi cant opportunity for our business.

Radius Data Exchange. Powerful data that enables smarter investment choices, stronger market advice and greater development opportunities.

VISIT EGI.CO.UK/RADIUSDX OR CALL 020 7911 1476 FOR MORE INFORMATION. ANALYSIS I E-GAMING

HOW E-SPORTS COULD CHANGE THE GAME E-gaming is a growing pastime, especially among the young. High-profile tournaments are attracting thousands of spectators, while gamers themselves could just be the new saviours of the high street ALEX HOFFORD/EPA-EFE/REX/SHUTTERSTOCK ALEX

Spring 2019 38 Pui-Guan Man

ust like the video games it relies on, the next few Jyears look set to be action- packed for the e-gaming sector, which seems likely to level up significantly in terms of growth. Predicted by PwC to reach $1.6bn by 2022, the niche market is still at grass-roots stage in the UK but has gained an impressive following worldwide. Having exploded in popularity in Asia, where e-gaming will become a medal sport in 2022 at the Asian Games, the phenomenon has spread to the US and looks bound for meaningful growth in the UK. E-gaming – organised, commercially driven and competitive video-gaming – is also a leisure activity that Mike Ashley trumpeted in his parliamentary hearing in December on reviving the high street. Ashley’s own Sports Direct last year bought 50% of GAME Digital’s Belong business, which includes e-gaming arenas.

Expanding market In recent years, competitive gaming has also spread across the basements of GAME stores, in shopping centres, and virtual reality arcades across the UK. Andrew Fahey, director and e-sports lead at PwC, says while it is “early days”, e-sports trends in the UK generally follow those seen in the US. He points to Walmart as an example, which is rolling out e-sports facilities across five locations. “On top of that, you have people who are curious about setting up e-sports venues in London and Birmingham,” he adds. The latter city in particular presents opportunities to build real estate specifically for e-sports, since it will host the Commonwealth Games in 2022 and already holds major e-gaming tournaments. Festivals and competitions staged at the SSE Arena in Wembley and the NEC in The Kinguin team takes on the Tyloo team from China at the 2018 ICBC (Asia) e-Sports Festival in Hong Kong Birmingham sold out in 2018;

Spring 2019 39 ANALYSIS I E-GAMING

by 2021 these are forecast to generate £8m in UK ticket The beauty of the industry is that there are no rules at the moment. sales. Anyone with investment who wants to build a structure will be able “It is a blank sheet of paper on what that might look to fill it – there’s no question about that like – whether it would be for a team based there or a Andrew Fahey | PwC gaming centre able to facilitate e-sports events,” says Fahey. [traditional] gaming,” he says. bricks-and-mortar when it spaces. There is also a large Notably, Twickenham “People have teams and comes to retail. screen to display live streams Stadium diversified into the players they support, and Arguably, e-gaming of global tournaments as well sector last month when it each title is a different sport companies are part of an as a food and beverage bar. signed a partnership with altogether. occupier group that has professional competitive “Unlike other [modes] of got closer than others have Huge potential gaming organisation Excel entertainment, this is a social, in combining food and For Andrew Price, asset Esports. community-driven form of beverage, leisure, technology executive at Shaftesbury, the Fahey says: “The beauty of entertainment, so the actual and social interaction in a potential for e-sports is vast. the industry is that there are no e-sports spectacle itself is physical space. The chance to expand the rules at the moment. Anyone secondary to the community Shanghai-based Wanyoo model for hybrid uses proved with investment who wants to around it. It [combines] Café has just unveiled its first particularly promising. build a structure will be able technology advancement, physical store in Europe with “By embracing the e-sports to fill it – there’s no question changing consumer behaviour the launch of its cyber café concept, we think it provides about that.” and current trends in social brand at one of Shaftesbury’s another dimension to media and interaction. units on Charing Cross Road, Chinatown and its evolving More than a fad? “I think the genie is out of WC2, and is positioning leisure offer,” he says. Determining whether the bottle, and the following itself as an early mover in this “E-sports is one of a number e-gaming is a mere fad is a for this type of entertainment is space with £21m of backing of change initiatives that challenge that comes from such that it may have a number from Wang Sicong, the son you’ve just got to understand outside the industry, says of different reincarnations over of Chinese billionaire Wang and [experiment with], and Fahey, particularly from the next 10 years, but it will still Jianlin. who knows where it’ll go from those seeing it “for the first be here in one shape or form.” Its 5,330 sq ft, two-storey here. You can’t ignore these time” – while the market café, which opened in late sorts of movements. remains immature, it is rapidly Hybrid appeal January, features a 12-terminal “It is early days, but I can “evolving and growing”. Much has been made of e-sports battle arena, private really see it morphing with “There is a difference the growing importance of rooms and booths, and public other technologies, whether between e-sports and merging technology with gaming and co-working it is hybrid use – for example,

2018 LOL World Championship final match at Munhak stadium in Incheon, South Korea JEON HEON-KYUN/EPA-EFE/REX/SHUTTERSTOCK JEON

Spring 2019 40 Build it, buy it, sell it.

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E-GAMING I ANALYSIS ALEX HOFFORD/EPA-EFE/REX/SHUTTERSTOCK ALEX

Munhak stadium in Incheon, South Korea, hosted the League of Legends World Championship in 2018 JEON HEON-KYUN/EPA-EFE/REX/SHUTTERSTOCK JEON AFLO/REX/SHUTTERSTOCK

becoming a part of cinemas – or a general food offer.” E-sports is one of a number of change initiatives that you’ve just got to understand and [experiment with], and who knows where Tapping the student market Price says that drawing in it’ll go from here. You can’t ignore these sorts of movements the core 18-35-year-old demographic will also drive Andrew Price | Shaftesbury footfall in surrounding areas, particular in the evenings “You have to be careful communicate with other computers and is on a 10-year when there is the most and keep a close eye on customers.” lease. In Coventry, he is aiming demand for e-gaming. saturation. But as long as you Wanyoo, which operates for a slightly smaller space of “When Wanyoo came in, give businesses time and don’t across 1,100 locations in more around 4,000 sq ft. they had done a lot of work bombard them, with one use than 50 cities in countries “It will depend on the with various student bodies at one time – you have to let including the US, Australia population of the place. In within the greater London markets evolve and grow.” and Canada as well as China, Liverpool Street, I may also universities,” he comments. plans to open at least three [put in] 88 computers, but in “We know that in Chinatown A growing high street presence more stores in the UK within Coventry I will maybe put in – and we saw it with the Zhaorong Chen, the chief the next two years. Before the 50. We will test the market growth of dessert bars – if you executive of Wanyoo’s year ends, Chen plans to open first and add more [or reduce get the right offers then you UK business, spent a year a 4,300 sq ft shop in Liverpool accordingly].” can really start to attract repeat searching for the company’s Street, EC2, catering to its Wanyoo has also said business from this younger first location in the UK, first 65% student population. He one of its goals is to work audience.” by consulting with agencies is currently negotiating lease with universities to provide Shaftesbury is now keeping before approaching lengths on the second launch. internships and employment a close eye on the launch, Shaftesbury directly. “[The area] has six opportunities. as well as trends in the For Chen, choosing London universities, and Liverpool It’s still at an early stage broader e-gaming industry, for Wanyoo’s launch was a Street is a very young place, so but, as an occupier group, to determine whether to add no-brainer, notwithstanding it is essential to open there. e-gaming could be a key part more e-gaming occupiers to the current political uncertainty. “We will also choose of boosting the appeal of its portfolio. “The people, the culture, the Manchester and Coventry, physical spaces to younger “We’ll stay close to Wanyoo economics – London is the which are amazing places [full generations and tapping into and see how their business best place for Wanyoo to align of] students and gamers.” that all-important market. develops. I wouldn’t rule it with and choose as its first Chen will look for leases Either way, the future looks out,” Price says. shop in the UK,” he says. with a minimum of five years in promising for e-sports, and “Five years ago, we had our “More than half of our Manchester and Coventry. The may yet prove to counter the first bubble tea operators in customers are students. The space requirements for these challenges in the retail and Chinatown; we’ve got up to other half is the gamers, the premises will also differ slightly leisure industry, and battle its five or six now, and we feel YouTubers – and it is also a from that of the Chinatown way into retail’s “League of there is a market there. good place for people to flagship, which has 88 Legends”.

Spring 2019 43 WHO TO KNOW I SARAH CARY

Spring 2019 46 ENFIELD’S BEST OF BRITISH After 10 years at British Land, Sarah Cary moved into local government when she became Enfield Council’s executive director for place last year. Here, she discusses her new role

Anna Ward population of around 330,000. Here, she talks to EG about fter growing up in her new role, the borough’s Dallas, Texas, Sarah Cary £6bn, 20-year Meridian Water Arelocated to pursue regeneration scheme and the a career in real estate in the UK. challenge of running a team of After nearly a decade at British 800 people. Land, where she was latterly head of sustainable places, Cary EG: How did you get into the moved into local government property industry? in March last year. SC: I grew up in an American She is currently Enfield suburb in Dallas, and when I Council’s executive director was a teenager I had to drive for place, responsible to high school. I got really for regeneration and bored sitting in traffic and development across the staring out the window, and it borough, an area of London got me thinking: “Why do we just smaller than Cardiff with a live the way we do?”

Spring 2019 47 WHO TO KNOW I SARAH CARY

Crossrail 2 will be a key opportunity for Enfield JEFF BLACKLER/REX/SHUTTERSTOCK JEFF

Plans for the Meridian Water regeneration project

I got interested in urban planning, sociology and the The council owns a lot of land and property. We want to leverage environmental impact of that to bring new businesses in and to support economic cities. I have built a career focused on trying to make development, alongside being more efficient in our own operations. cities a bit better for people and the planet. I’m really pleased to be able and improving our council and homes for the future at lots of different things in my to work in north London. It housing. We have 15,000 Meridian Water. career, I wanted to go back to doesn’t look like Dallas, but it homes. We also have a whole I am most excited about work on a bit of city, a bit of feels like coming home. It is system for complaints and how the design integrates the development where I could similar in that there are a lot engagement with residents, city and the park, so people spend years and see the of strong connections around and it is important that I listen walk out of their houses and benefits – see the change to school and churches, and to what residents are telling can access the big marshes the city. both cities are very ethnically us about what they want for and miles of the regional park. I had a couple of diverse. the borough. It is not your classic Georgian conversations with people in park with a fence. It will be local government and went What are you responsible for? What is your role on the very urban. I am passionate from there. It is my first role I run a consumer-facing Meridian Water project, and about integrating nature with in local government, partly operation, including services what excites you the most cities. because I came to the UK as an such as collecting bins from about it? American citizen and couldn’t 125,000 homes, as well as It is such a big focus for us as a How did you get the job at get a job in local government strategic operations, which council. Peter George is part of Enfield Council? until I got my visa. looks at long-term things such my management team, as the I’d been at British Land for as how Enfield can get the project director responsible 10 years. I really enjoyed What did you learn from your most out of Crossrail 2. for Meridian Water. We are working there but I’m not the previous role that you can Other service areas I quickly growing a dedicated kind of person who wants to apply to this one? look after are planning team within the council to work at one company for the I bring a really diverse service and maintaining deliver the infrastructure rest of my life. Having done background of experience,

Spring 2019 48 A sketch of the Meridian Water station which is expected to open in 2019

Living in Dallas sparked Cary’s interest in urban planning Edmonton Green Shopping Centre WESTEND61/REX/SHUTTERSTOCK HIGH LEVEL/REX/SHUTTERSTOCK HIGH having worked not just on I usually also have a meeting being more efficient in our change my management style design or town planning with a cabinet member or own operations. and the way that I work and to but on a range of projects, councillor to understand their The other thing is we have trust people. large and small, delivering concerns and ideas, ideally out agreed to build a new office construction, getting planning, in the borough on-site. Nearly for a local software business, And the best aspects of your doing strategic masterplans. every day I have an evening which was recently approved role? I think that breadth of briefing, for example on by our planning committee. I am excited about building experience has already been housing repairs. It helps the company expand more homes for Londoners. really helpful. I love the job, but it is harder to bring a further 100 highly This is something that councils work than at British Land. skilled jobs to Enfield, and it is can do. What is a typical day for you? a good property investment I start off by checking in on What is your proudest for the council too. What is your favourite building a couple of projects to make achievement since starting in Enfield? sure they are going in the the role? What are your main aims for My favourite one in terms of right direction. I usually have I think there are two big ones. 2019? design and quality is Forty at least one meeting, one- The first is that we have started This year for me is all about Hall, an old Jacobean manor to-one with someone in the to think about council property building more homes – and house in a park setting. The team. I am big on spending ownership as a good way to more affordable homes. landscape is stunning. time with direct reports one- deliver economic benefit and In terms of what is possible to-one, then letting them get housing delivery. The council What are the most challenging for Enfield, I am going to on with things. is unique in that it owns a lot of aspects of your role? go out on a limb and say I will probably have a land and property. Before, this I came from running a team Edmonton Green Shopping meeting in relation to the was seen purely in financial of 10 people and I am now Centre. council budget – we have terms, but we’ve stopped running a department of It is a massive pile of seen central government having that conversation. 800. So, I moved from a small concrete, but it is very well funding cut substantially, so We want to leverage it to team in a strategic role to connected and an example of we have to watch it carefully to bring new businesses in a large team in day-to-day a site with so much potential deliver more services for more and to support economic operational business. to improve for the benefit of people with less money. development, alongside It has been a challenge to Enfield residents.

Spring 2019 49 FLEXIBLE WORKSPACE I CONVENE Introducing the future of co-working

Anna Ward

Scotch tastings, afternoon tea, yoga and World Cup screen- ings. These are just some of the amenities available to Con- vene customers in New York which could cross the Atlantic this year for the company’s London launch. With more than $150m (£116m) in financing under its belt from investors including Brookfield Property Partners, the US flexible meeting and working space start-up is now investing serious money in London, which will be its first international outpost, and is in talks to acquire space at Twenty Two Bishopsgate. Last November, it announced its first hires in the capital: Black- stone’s Elliott Sparsis, who joins as vice president of real estate, and James Frankis from Gen- sler, who is taking on the role of director of strategic solutions Frankis says: “We really are for London. trying to partner with landlords. Sparsis joins Convene after This has been very successful in six years at the US private the US. equity firm, where he was “WeWork is more of a tenant senior manager overseeing the in a building. Our deal struc- firm’s portfolio of central ture is different, and how we London offices. approach a building is different. He was involved in several of It is about starting to identify Blackstone’s highest-profile the right building, and land- investments in the office sector, lords that have a progressive including Chiswick Park, the approach around what we think Adelphi Building, WC2, 20 Old the future of workplace is.” Bailey, EC4, and 125 Old Broad Street, EC2. Crowded market Previously, Frankis spent just The pair are bullish about the over four years at the US design, opportunities that London will planning and consulting firm’s offer, despite co-working London office. After joining as Philadelphia, Washington, Los London, it has the opportunity being a crowded market. an associate, he became Euro- Angeles and . to team up with some of its “The workplace market in pean practice area lead for In February last year, it hired investors, such as Brookfield, London is big, underesti- consulting in May last year. CBRE to finds its first London which already operates real mated,” says Frankis. “That is Founded in 2009, Convene locations. It plans to open around estate in the city. going to need to be aug- manages common space and 500,000 sq ft of office space in Sparsis says: “We want part- mented by things such as tech, meeting rooms in office build- London, taking its global total to nerships with landlords. club space, places to work and ings. It has also branched out 1.7m sq ft by the end of 2019. Owning outright is not in our focus, and places to unwind into club space and hospitality Sparsis says: “We have identi- strategy. We would also work and socialise.” services such as fitness classes fied two key areas to open in. with enterprise tenants [occupi- It remains to be seen whether and catering. Its in-house tech- The City is our target market for ers] as well – that is something working Londoners put down nology platform, Elevate, offers our first site. Canary Wharf is we see working well. We can their free pints of beer and landlords data on how tenants another priority.” work in a three-way deal with table tennis bats and embrace a use space. Convene is also looking at the both landlords and tenants.” new model, but Sparsis is West End, City fringe, South The firm is targeting a range sanguine about his competi- London calling Bank and Midtown submarkets. of landlord partners, not just its tors: “Rivals cannot compete Convene currently operates in Convene’s business model investors. “We are not exclu- with the experience we have six cities in the US but is looking involves partnering with land- sively tied to operating with our built over the years in the US. to expand to London this lords. The partnership can investor Brookfield in London. We will have competitors, year. The company runs loca- include a lease, but typically The metrics of the building have but we are confident in tions in New York, , involves unique terms. In to stack up,” adds Sparsis. the product.”

Spring 2019 50