SILICON ROUNDABOUT AT A CROSSROADS Developers’ schemes are becoming increasingly ambitious to help catapult east London’s “Tech City” to international recognition. Hardeep Sandher reports

Swings and roundabouts: Roundabout (opposite) desperately needs regeneration of the type architect 00:/ plans with its 120,000 sq ft community building (right)

propertyweek.com / 18 May 2012

026_PROPWKlondonMAY.indd 26 11/05/2012 16:33 XXX Tech City / London / 27

White hot: 220,000 sq ft White Collar Factory is part of Derwent London’s regeneration plans for Tech City

year and is led by Tom Appleton, director at Rocket Investment, who says the group has met with TfL, which supports its aspirations. The plan comprises three phases, the first of which involves refurbishing Old Street Underground station and which will be funded by the consortium itself. “Anyone arriving at the scene for Cameron’s vision of Tech City needs to come out of the Underground and see something exciting,” says Appleton. “It is something all landowners need to be thinking about because the tenants in our buildings are fuelling the Tech City hype. We are not talking about large amounts of investment. It is going back to basics and improving the look and feel of before t has been 18 months since prime find 50,000 sq ft in the Old Street area concourse at Old Street station. moving on to bigger things.” minister David Cameron threw his — an amount of unoccupied space that Talk has focused on the development The “bigger things” are phases Iweight behind the concept of simply does not exist. of a new building on the roundabout two and three, which will replenish Tech City — and the Old Street “Silicon Devono faces a similar challenge in itself — a plan first mooted more than the retail around the station and which Roundabout” at its epicentre — but finding 40,000 sq ft for a client, and is five years ago. could create more units. The rent could his ambition to transform east London forced to look in Soho and King’s Cross. They are ambitious plans and a be used to fund the development. into a world-leading technology hub is long way from fruition, but it is hoped This would be followed by plans to still embryonic. Game over that such a development would propel better use the space on the roundabout As a marketing ploy, the “Tech City” The Silicon Roundabout fails to Tech City to international recognition. itself. Initial discussions have centred label has turned the spotlight on this match its Californian counterpart The ideas have come from two on an office development on the site. City fringe location. The government’s in other ways. consortia. One comprises local “It is a long-term project and we are Tech City Investment Organisation One agent says: “On entering Tech landowners and developers Rocket at very early stages. In terms of exactly says it aims to make it one of the top City from Old Street Underground, the Investments, Derwent, Starprop what would be developed and by whom, three destinations in the world for place looks as if it leaves a lot to and Tracey Holdings. we are unsure,” explains Appleton. “But technology companies, entrepreneurs be desired. It can be a hard sell to The consortium was formed this the opportunity, space, ›› and investors — a UK Silicon Valley. occupiers, who have heard about The growth is promising because, the area and then arrive to see just down , the Square Mile the run-down reality. ” itself is experiencing a lull in letting The issues have hit a nerve. activity from traditional banking Developers from Derwent and London and professional occupiers, which & Regional to the newly formed are struggling in the wake of the Silvertown Properties are putting into global financial crisis. place plans that could create 300,000 Although entrepreneurs continue to sq ft before 2014 (box, overleaf). flock to the area and demand for space Islington Council is also lobbying in and remains for improvements and, in partnership strong among smaller occupiers, there with , has worked is not enough room for them all. up a detailed scheme to address the Mind Candy, the online social gaming poor condition of the station and its creator of Moshi Monsters, is the latest immediate surroundings. occupier to have outgrown its 16,000 In addition, it is thought that the sq ft in Derwent London’s Tea Building public sector will soon join together on Shoreditch High Street. The group with the private sector to progress has instructed Hatton Real Estate to plans for a new underground

propertyweek.com / 18 May 2012

026_PROPWKlondonMAY.indd 27 11/05/2012 16:33 28 / London / Tech City

DEVELOPERS TAKE OLD STREET TO NEXT LEVEL

Last month, a 3 acre site on the the digital and technology sectors. be accommodated. Such occupiers north-west end of Old Street, Stephen Page, founding partner want to remain in the area and do opposite the roundabout and next of Clerkenwell-based agency Anton not want a generic glass box in to where Space Station plans a Page, says interest from outside the the or West End. pedestrianised walkway, was digital sector is a recurring theme. “Bigger fl oorplates and large « infrastructure and train line offi cially brought to the market. “Although some of the interest amounts of space are an issue in are already there for someone to Israeli investor Circleplane owns is from the technology sector, both this area and the West End — develop an offi ce building on the 207 Old Street, which is a mixture that demand is still in quite an it is nothing new,” he explains. Old Street roundabout. It is the of offi ces and retail. The offi ces embryonic stage. The creative “The diff erence here is that most prime opportunity.” are largely empty and it has and media sectors have been occupiers will not mind being based There are signifi cant issues to been suggested that in six or seven fl oors of 8,000 sq ft overcome. The roundabout is owned by the block, which each because the building will have Islington and Hackney councils and the has a price tag Occupiers will not mind being character and the area fi ts in with Underground station is in the hands of of around £70m, based in six or seven fl oors of their aspirations. TfL. To make any changes underground, could be redeveloped “Mind Candy [in Derwent’s Tea the consortium wants managerial into a scheme three 8,000 sq ft each because the Building] have grown and grown. control of the space in the station, times the size. building will have character They have options in where they which TfL has not yet authorised. The buyer will can go. We are working with them Before a developer would commit likely take advantage Simon Silver, Derwent London to provide a building they want. to the roundabout, a joint venture of the development We have lots of plans in the area.” partnership or ownership would opportunity and demand for space. established here for a long time and London & Regional also hopes need to be established. Islington Rocket Investments is one such are continuing to drive up demand.” to cash in on this demand. It is and Hackney councils have given their developer already taking This is evident in Derwent thought to be preparing a planning support, but not decided on a strategy. advantage. In September, it will London’s portfolio, of which Aedas application to extend Epworth Funding a development will be submit a planning application Architects and denim fashion label House, a 59,000 sq ft property discussed after this. for 70,000 sq ft of offi ces and Lee Cooper Brands are among the on City Road, where tenants’ leases additional residential at 37 East occupiers. In the next three to four expire in January 2013. Four fl oors Space race Road, opposite its 40,000 sq ft years, Derwent will develop more could be added to the building. The group has competition. Property development on Linen Court. than 250,000 sq ft of offi ces for Silvertown Properties, led by consultant Space Station and architect Seven of the 10 fl oors at Linen tenants with large requirements managing director JP Ledwidge, 00:/ have announced plans for their Court have been placed under off er, at Silicon Roundabout. One of its is also under way with a £100m, own development of the roundabout, which leaves just 12,000 sq ft. largest buildings will be the 350,000 sq ft offi ce and residential whereby the north-west end of the The block was completed in April 220,000 sq ft White Collar factory scheme, Clerkenwell East. roundabout would be closed and and has already achieved the area’s on Old Street itself. The 100,000 sq ft offi ce element turned into a walkway. highest rent of £36.50/sq ft. Among Simon Silver, co-founder and has 30 offi ce units of various sizes This walkway would lead to a 30,000 those interested in Linen Court head of regeneration at Derwent, in a block enclosed by Pear Tree sq ft public square above which a are fi nance agencies, travel and says that, in future, larger Street, Seward Street and Central fi ve-storey 120,000 sq ft community- construction companies and requirements from creative Street. The fi rst 10-unit phase orientated space is planned. It would even charities, in addition to businesses such as Mind Candy can was completed in June. showcase and launch products, rather than contain offi ces. The group has support from Hackney and Islington a part of the project. Chopp says he councils, as well as the mayor of has been surprised at the amount of London, says Russell Chopp, director interest from investors, both overseas at Space Station. and institutional, thanks to the buzz “One thing we [the stakeholders] all around Tech City. agree on is that Old Street is a mess and Either development would catapult regeneration is desperately needed,” Tech City into a diff erent league. And says Chopp. “But this development is there is no shortage of landowners and not about the gentrifi cation of Old developers lining up to be a part of it. Street with new offi ce blocks. We Appleton says the scheme should need and want to keep the culture, as not be seen as regeneration, but that is what makes the area successful. acceleration of the growth around Anything created would need to serve Clerkenwell and Shoreditch. Old Street the local start-up communities.” roundabout is simply the “next He admits the concept is innovative unexploited plot of land” in the area. and that he is not a developer. Instead Whether this will be enough or, the group wants to bring on board a indeed, if it is even needed, is moot. The development manager. Funding will evolution of east London into one of the Silver service: Clerkenwell East, come from co-investors from the world’s leading technology centres has Silvertown Properties’ £100m mixed-use development or entrepreneurs already begun. Its only limits are the scheme, is already partially complete themselves, who are keen to become vision and talent of its key players. 9

propertyweek.com / 18 May 2012

026_PROPWKlondonMAY.indd 28 11/05/2012 16:33