London Borough of Hackney

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London Borough of Hackney

Permitted Development Rights for Change of Use from

Commercial to Residential

Exemption Request ‘A’ – Loss of a Nationally Significant

Area of Economic Activity

February 2013

Contact

Alan Hesketh, Strategic Delivery Manager, Spatial Planning London Borough of Hackney, Planning and Regulatory Services, 2

Hillman Street, London E8 1FB

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1.1 The London Borough of Hackney is submitting this request for an exemption to the Government’s proposed change to permitted development (PD) rights to allow change of use from office (use class B1(a)) to residential (use class C3), a proposed change for a temporary period of three years. This request falls under DCLG’s Exemption process ‘A’, the loss of a nationally significant area of economic activity.

1.2 Whilst acknowledging the Government’s rationale behind the temporary changes, to boost the economy and housing supply, Hackney Council considers that these changes to PD rights would have a detrimental impact on an area of nationally significant economic activity. The area subject to this Exemption ‘A’ bid is of nationally significant economic importance, given the economic contribution the area currently does, and will, provide to both the London and national economy.

1.3 As set out in section 5.0 of this Exemption Request, Hackney incorporates a significant element of London’s ‘Central Activities Zone’ (CAZ), as designated in the London Plan and the Council’s Core Strategy. This area incorporates Shoreditch and fringe areas of The City, a strong commercial area providing office and commercial floorspace for a range of businesses. This area also includes the identified nationally important Tech City initiative, initially identified in the area around Old Street roundabout, but the growth of which requires a significant supply of commercial land and floorspace within the area, it’s fringes and further north towards and incorporating Hackney’s two major town centres of Dalston and Hackney Central, both of which are covered by recently adopted Area Action Plans built based on pro-growth strategies.

1.4 The GLA are supportive of Tech City, and are proposing an Opportunity Area Planning Framework (OAPF) for the City Fringe, which incorporates the area of CAZ in Hackney, and adjoining boroughs, and also areas of designated employment land in Hackney on the fringes of Shoreditch, and along two key arterial routes (containing both road and rail) linking Shoreditch with Dalston and Hackney Central, and including those two centres. This Exemption Request, therefore, includes the CAZ designation and the designated employment land area linking the CAZ to those centres, Dalston and part of Hackney Central.

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1.5 This Exemption Request supports, and is supported by, the GLA’s Exemption Request ‘A’ for the wider CAZ area in London, and including the above City Fringe OAPF area. The Council also understands that the London Legacy Development Corporation (LLDC) is also making an Exemption Request for areas of commercial land within its ‘planning authority area’. Given that the Local Plan applicable to the area of the Borough now under LLDC planning jurisdiction, Hackney Wick, has been adopted by Hackney prior to the transfer of planning powers (adopted Core Strategy and adopted Hackney Wick Area Action Plan), the Council supports the LLDC Exemption Request to protect important commercial land in that area, which is partly subject to a London Plan Strategic Industrial Land designation.

1.6 This Exemption Request follows DCLG guidance. Section 2 describes the scale of the impact of the changes in absolute terms, succinctly summarising the totality of the impact of the changes on this area of the capital and the Borough; Section 3 explains the significance of the adverse impact at a national level; Section 4 sets out the strategic and long-term adverse economic impacts that the changes would have on this area of London and the Borough, and section 5.0 contains a map and narrative of the Exemption Request Area. Section 6.0 summarise details of support from organisations/individuals for the Request, , and section 7.0 contains appendices (appendix 1 the Map of the Area of Exemption, appendix 2 the letters of support as mentioned above). 1.7 In summarising the support for this Exemption Request, support has

been received from a range of individuals and organisations, but in particular from Meg Hillier MP, Jeanette Arnold (London Assembly), the London Legacy Development Corporation, the Mayor of London, and a number of businesses in Hackney.

1.8 The Council has also submitted an Exemption Request under DCLG process ‘B’, ‘Loss of a Locally Significant Area of Economic Activity.

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2.0 The Scale of the Impact in Absolute Terms

2.1 This section summarises the ‘totality’ the impact these changes to PD rights will have, but with a particular focus on the economic impact and spatial impact. The economic impact is set out in detail in sections 3.0 and 4.0. However, in summary, the proposed changes, although temporary, will have a significant impact on the supply of commercial floorspace to support the business function of the CAZ, the wider Tech City initiative, and for employment and economic growth to support the wider London economy within the Borough.

The Central Activities Zone (CAZ), City Fringe Opportunity Area, and Dalston Area for Intensification

2.2 The London economy contributes around 17% of the UK's total GDP.

London is home to the European headquarters of 33% of the world's largest companies. London is widely regarded as the primary location in Europe for business. Over 65% of Fortune's Global 500 companies have chosen London as a center of operations and London plays host to more foreign banks than any other city in the world.

Tech City: The foundation for new Economic Growth in the UK

2.3 David Cameron has announced a £50million investment package into the Tech City site.

2.4 The total size of the digital economy is estimated at $20.4 trillion, equivalent to roughly 13.8% of all sales flowing through the world economy.1 Tech City in particular is contributing to a portion of the digital economy that is growing exponentially across multiple sectors. 2.5 As the economy matures in the Borough, for example in Shoreditch,

Dalston and Hackney Central, converted factories not only host the eclectic mix of the knowledge economy, but now corporates such as Microsoft, Google and Cisco have joined international companies and venture capitalists in these spaces and larger bespoke offices. All this activity has increased rental prices from £21/sqft to £29 in a single year.

2.6 DTZ reports that 35% of London’s office growth is generated by technology, media and telecommunications firms as Amazon, Omnicom, Yelp and several other major firms seek property of 100,000 sqft or more in the city centre.

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Tech City: Current Productivity in the Cluster

2.7 Tech City refers to a web of interdependent businesses including technology and digital companies working in app design, games development and web programming. These businesses have propelled growth in Hackney by 52% of the total business stock since 2003. 2.8 Between 2004-2009, the growth rate for businesses in Hackney was

nearly twice that of London, 21% in LBH and 12% in London. In conjunction with the boom in Tech City, hospitality firms grew by 41% while the retail sector in Hackney has seen growth of 15% since 20032. 2.9 In 2010, Hackney hosted 88,905 jobs, and 44% of this employment is in Shoreditch. Technology, creative industries and business services make up 37% of employment in the borough and 17% of jobs are provided by retail and hospitality.

2.10 Initially dubbed the ‘Silicon Roundabout’, the primary location is in Shoreditch; however, the cluster has expanded into the area around London Fields (Hackney Central) as well as some parts of Dalston and Hackney Wick.

Tech City: The Hackney Experience

2.11 When creative and digital firms began to fill in the warehouses of Shoreditch in 2003, the average price per square foot was around £15. The typical space provided open plan banks of desks with an enclosed meeting space and a kitchen.

2.12 Urban office space has evolved to not only fill these basic needs, but to include benefits of networking events, business support and continuing education. The need for affordable space allows incubation of textile manufacturers, graphic designers, data companies and musicians to co-exist in the same office unit.

2.13 As rents increase to £35 per square foot today, this mix stays roughly similar. Higher value start-ups still require the basic services of a co-working space in addition to higher quality amenities such as a bigger event space or an onsite restaurant/café.

2.14 Hackney’s demand for office space broadly reflects the need for small, affordable space with a package of amenities. Between 2004-2012, 48% of Hackney’s demand for office space was for property under 1,000sqft. Another 20% of demand during this period came from office space between 1,000-2,500 sqft. This means nearly 70% of Hackney’s office demand during the emergence of Tech City has been small offices under 2,500sqft. This demand has remained roughly stable during the recession.

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2.15 In addition Hackney’s inward investment statistics demonstrate a 74% increase in demand for spaces between 2,500sqft and 5,000 sqft between 2006-2012.

Tech City: Demand vs Supply

2.16 Demand of 117,631 sqm exceeds current B1 net uplift in the pipeline of 58,697sqm.

2.17 Vacant floorspace has reduced from approx 130,000sqm to 40,000sqm in the last few years. This includes a reduction of vacant floorspace of approximately 70% in Shoredtich and by 60% in Dalston / Kingland and Mare Street / London Fields (Hackney Central).

2.18 Rental growth in Shoreditch has seen stronger growth in the region of 15% per annum according to local agency surveyors’ findings. This is clearly shown by headline rents for Grade A space in the area

achieving rental levels in excess of £35 per sq ft currently which was not envisaged by the industry as recent as two years ago.

Tech City: From Shoreditch to Dalston and Hackney Central

2.19 As a result of Tech City growth many businesses, including start ups and SMEs are either being priced out of Shoreditch and/or are not able to find available space. For this reason Tech City and related clusters are beginning to locate along Kingsland Rd to Dalston and along Hackney Rd and Mare Street towards London Fields / Hackney Central where rents are much lower.

2.20 The other benefits of these locations in addition to having lower rents are: the availability of small and medium size floor spaces most in demand by Tech City business; existing healthy cluster of related sectors such as hospitality, retail and leisure uses which have further scope for growth; and like Shoreditch they have high levels of public transport accessibility.

2.21 Both areas are covered by recently adopted Area Action Plans outlining a pro-growth strategy for housing, employment, and leisure uses.

Hackney’s policy approach to Employment Land

2.22 The Council’s policies are flexible in that they take account of market signals through the submission of marketing evidence when seeking to release employment land. These policies essentially seek to allow mixed use development in the Borough’s Priority Employment Areas (PEAs, the Borough’s main employment designation) where higher value uses such as residential help to cross subsidise the provision of

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2.23 Between 2008 and 2012 over 1500 dwelling units have been delivered (completed) in PEAs. This represents 27% of the borough’s total units (of 5736) completed during this period which is made even more significant by the fact that only 6.1% of Hackney’s total land mass is designated for employment purposes. In addition to new housing, redevelopment in PEAs during this period also yielded in excess of 7500sqm of A class uses, over 7000sqm of D class uses and nearly 300 hotel rooms. This uplift has been delivered alongside a net uplift of over 16,000sqm in B1 floorspace during a period characterised as one of the worst recession in a generation.

2.24 The composition of live planning applications (or pipeline) within the PEAs is similar with 1349 dwellings, over 9,000sqm of A class and over 18,000sqm of D class uses granted planning approval. Again this uplift in other uses is accompanied by nearly 59,000sqm of B1 floorspace which again demonstrates the strong demand for new office floorspace in the borough’s PEAs moving forward.

Hackney’s housing delivery

2.25 The borough’s current housing target is 1160 dwellings per annum. Over the past 5 years (2007/08 to 2011/12) the borough’s housing completions has totalled 7281 new homes which on average equates to 1456 new homes per annum. Land designated for housing in Hackney should deliver approximately 8065 dwellings over the next 5 years between 2012 and 2017. This is 39% higher than 5800 dwelling that will be required based on Hackney’s currently annual London Plan target.

Residential vs Office values

2.26 Residential values compared to office values are consistently higher in the magnitude of £300 to £400 psqft in all locations of the borough and much higher in Shoreditch of between £500 to £1000 psqft. These high differentials are easily able to absorb conversion costs of between £74 to £140 psqft.

Floorspace at risk of conversion in the short term

2.27 Based on buildings of significant size (3-4 plus stories) with good accessibility and short terms leases, it has been quantified that approximately 117,000 sq.m of office floorspace in Hackney is under risk of conversion to residential use in the short term with these proposed PD changes.

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Loss of planning contributions to fund infrastructure

2.28 A change of use from office space to residential use puts pressure on the infrastructure needed to support such residential growth; for example school places, transport infrastructure, open space, and health facilities. However, as a permitted development, contributions normally secured through Section 106 to fund such strategic infrastructure and site specific impacts, will not be negotiated as no planning permission will be required.

2.29 In terms of the impact on the ability to collect CIL and the Mayoral CIL, if the office space had been vacant for at least 6 of the preceding 12 months, then the development would be liable to be charged CIL. What this effectively means is that owners of office buildings, in order to avoid paying CIL, are likely to keep their current office use for as long as possible, until they are changed to residential. Also any new office development recently build or in planning, could change straight to residential and effectively pay no S106 or CIL. This will not only limited the ability to provide supporting infrastructure but could undermine the entire office market in Hackney as businesses will have no certainty as to whether or not their leases are likely to be extended. It also puts at risk Hackney’s entire pipeline of B1 floorspace.

Impacts on design quality

2.30 Without a planning application being submitted key design issues such as achieving minimum space standards in accordance with the Mayor’s London Plan, single aspect dwellings and access to light and ensuring transport impacts are accurately assessed will be difficult to achieve.

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3.0 The Significance of the Adverse Impact at a National Level

The Central Activities Zone (CAZ), City Fringe Opportunity Area, and Dalston Area for Intensification (sub-heading style)

3.1 The London economy contributes around 17 percent of the UK's total GDP and is comparable in size to that of Sweden, Belgium and Russia. Each of London's distinct regions - North, South, East, West and Central - is individually larger than many major cities elsewhere in Europe. London is home to the European headquarters of 33 percent of the world's largest companies. London is widely regarded as the primary location in Europe for business. Over 65 percent of Fortune's Global 500 companies have chosen London as a center of operations and London plays host to more foreign banks than any other city in the world.

3.2 The engine room of London’s global significance as an economic centre is the Central Activities Zone (CAZ). The CAZ covers London’s geographic, economic and administrative core. Almost a third of all London jobs are based there and, together with Canary Wharf, it has historically experienced the highest rate of growth in London. Over the period of the London Plan, employment in the CAZ is expected to grow substantially, particularly driven by expansion of the office-based business services sector, as well as more jobs in areas like retail and leisure services. It will be important to ensure an adequate supply of office accommodation and other workspaces in the CAZ/Isle of Dogs suitable to meet the needs of a growing and changing economy. The projected increase in office-based employment in the CAZ/Isle of Dogs will create significant demand for new office space in the longer term. 3.3 The CAZ also has a number of other specialised economic clusters,

including the financial services in the City of London, of which Hackney abuts, and where the City is expanding into and on which the City relies on for supporting services. The CAZ cannot be seen in isolation. Its success is critical to the overall prosperity of London and the UK; this success in turn depends on availability of a skilled workforce, goods and services from other parts of the capital and beyond. The economic, social, environmental and transport linkages between the CAZ and the rest of London, the greater south-east, the wider UK and the world have to be recognised and addressed.

3.4 The City Fringe, which incorporates Shoreditch, is an Opportunity Area in the London Plan. Opportunity Areas are the capital’s major reservoir of brownfield land with significant capacity to accommodate new housing, commercial and other development linked to existing or potential improvements to public transport accessibility. Typically they can accommodate at least 5,000 jobs or 2,500 new homes or a combination of the two, along with other supporting facilities and infrastructure.

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3.5 The London Plan capacity estimates for the City Fringe OA are the provision of 70,000 jobs and 7,000 new homes. The strategic policy direction sets out that the OA “contains a number of accessible, relatively central sites with significant development capacity, including Bishopsgate/South Shoreditch and Whitechapel/Aldgate. The Area provides particular scope to support London’s critical mass of financial and business services and clusters of other economic activity, such as creative industries. Minor extensions of the CAZ should assist the realisation of development capacity and exploit public transport accessibility through Crossrail 1 stations at Liverpool Street and Whitechapel and at the East London Line stations. At Old Street the scale of additional development capacity is partly dependent upon operational rail requirements and improvements to interchange capacity. The area contains some of London’s most deprived inner city neighbourhoods as well as affluent new quarters interspersed with affordable business premises, some serving the local communities, others meeting the needs of national and international business.

3.6 The London Plan states that results from the 2009 London Office Policy Review indicate that office based employment may grow by some 303,000 between 2011 and 2031. On the basis of this; a central assumption for office employment density of 12 sq.m per worker; net:gross development ratios of 75% - 85%; and a frictional vacancy rate of eight per cent, London might need an additional 3.9 million sq m (net) or 4.6 - 5.2 million sq.m (gross) office floorspace by 2031. For the CAZ and the area to the north of the Isle of Dogs, forecast demand for the CAZ is 177,000 jobs, or 2.3m sq.m of net office floorspace. In the CAZ and the Isle of Dogs there remains strong long-term office demand, and a substantial development pipeline which is partly subject to the implementation of Crossrail and other significant investments in transport capacity. Environmental improvements in these locations continue to be needed to enhance its attraction as a global business location.

3.7 Just to the north of CAZ and Shoreditch is Dalston, Hackney’s Major Town Centre, as designated in the London Plan and the Council’s Core Strategy. Dalston is also identified as an Intensification Area in the London Plan. Intensification areas are typically built-up areas with good existing or potential public transport accessibility which can support redevelopment at higher densities. They have significant capacity for new jobs and homes but at a level below that which can be achieved in the opportunity areas. Capacity estimates for Dalston in the London Plan are the generation of 1000 jobs and 1700 homes. More detailed capacity work contained in the Council’s adopted Dalston Area Action Plan estimate the provision of 1768 new homes, 15,880 sq.m of employment floorspace and 32,797 sq.m of retail floorspace for the life of the Plan (2011-2026).

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Tech City: The foundation for new Economic Growth in the UK

3.8 When David Cameron announced the £50million investment package into the Tech City site, the UK joined Germany, Russia, the US and other countries in intensifying growth in their urban technology and creative centres. While top down cluster development has demonstrated mixed results, government support of pre-existing growth has had higher returns.

3.9 The promotion of technology, creative and knowledge intensive businesses underlies the Business Innovation and Skills Unit’s (BIS) growth strategy as stated in the 2010 report Technology and Innovation Futures: UK Growth Opportunities for the 2020s and the 2012 report

Economics Paper 18: Industrial Strategy UK Sectoral Analysis. Each of these documents state the likely growth areas that the Government will partner with to facilitate both the rebalancing of the economy and the strengthening of the UK’s competitive position internationally.

3.10 Technology, media, advanced manufacturing and knowledge services are all identified as key growth areas for their contribution to UK GDP and employment. BIS is on the right track as the total size of digital economy is estimated at $20.4 trillion, equivalent to roughly 13.8% of all sales flowing through the world economy.3 Tech City in particular is contributing to a portion of the digital economy that is growing exponentially across multiple sectors. Deloitte’s analysis of the Technology, Media and Telecommunications (TMT) sectors explains how each of these sectors feed growth across the set as advances in technology multiply opportunities in media and increase expansion in telecoms.4 These same movements are giving rise to a new wave of British manufacturing as technology and design firms unite to create new methods of manufacturing and production. These clean industries sit side by side and receive inspiration from the fashion, mobile and advertising sectors.

3.11 Increasingly, the development of these industries is occurring in clusters in dense, walkable, collaborative urban areas. London gains ground in the digital economy through the spread of digital media and technology firms across the Central Activity Zone. New businesses are looking to be not only near each other but a lively leisure scene complete with the cafes, restaurants and theatres that serve as meeting spaces and after work networking venues.

3.12 Urban employees are able to move across the digital economy maximizing their skills for use in projects from engineering, design or fashion. As technology spreads, industry requires employees that work across multiple languages, platforms and sectors.5 With a ready and

3

Oxford Economics, The New Digital Economy: How it will transform business, Oxford, UK, June 2011

4

Deloitte Technology, Media and Telecommunications Predictions 2013, London

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available property market calibrated to the type of office space these employees require, urban centres encourage this innate flexibility. 3.13 There is a reason that the old factories of Shoreditch have filled up with

the new companies of the digital economy. In 2003, when the emergence of the technology and creative sectors began, rent was cheap and the slate was clean. The first design, media and tech workspaces hosted artists, fashion designers and software developers that would host events together, go out in the bars next door and collaborate over joint projects through discussions in the kitchen.

3.14 As the economy matures in the area, these old factories still host the eclectic mix of the knowledge economy, but now corporates such as Microsoft, Google and Cisco have joined international companies and venture capitalists in these spaces and larger bespoke offices. All this activity has increased rental prices from £21/sqft to £29 in a single year between 2010 and 2011.

3.15 Tech City has not only grown within the present boundaries, but it has also catalysed digital economy development in new areas such as King’s Cross, Stratford City and Canary Wharf. With the IBC/MPC announcement of BT Sport broadcasting from the Olympic Media Centre and the financial technology incubator of L39 in Britain’s second tallest building, London’s office market is playing a cornerstone role in diversifying the economy into a major international growth area.

3.16 DTZ reports that 35% of London’s office growth is generated by technology, media and telecommunications firms as Amazon, Omnicom, Yelp and several other major firms seek property of 100,000 sqft or more in the city centre. All of this energy indicates that the Government’s intention to increase the UK’s share of growth in the knowledge economy is being primarily met through London office space.

Tech City: Current Productivity in the Cluster

3.17 Tech City refers to a web of interdependent businesses including technology and digital companies working in app design, games development and web programming. These businesses have propelled growth in Hackney by 52% of the total business stock since 2003 leading to the establishment of a creative technology knowledge cluster in Shoreditch. The cluster also includes supply chain companies specialising in business services such as digital marketing, events management and design firms. Hackney today has over 9000 businesses.

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3.18 Between 2004-2009, the growth rate for businesses in Hackney was nearly twice that of London, 21% in LBH and 12% in London. The majority of firms in Hackney are between 4-9 years old and the survival rates at this age are higher in Hackney than London. In 2011, 48% of Hackney’s economy specialised in science, technical and professional, information and communication, 5% more than London as a whole.6 3.19 In addition to these creative and technology businesses, parallel

growth has occurred in hotels restaurants, pubs and cafes and retail moving Hackney into a position to market its commercial realm as a destination for entertainment, leisure and a networking spot for knowledge businesses. Over the same period as the boom in Tech City, hospitality firms grew by 41%. These businesses have provided increasing employment opportunities even through the recession. Retail in Hackney has seen growth of 15% since 20037.

3.20 The Tech community has evolved over the past 10 years and is the latest phase of creative activity that builds on the influx of artists and designers into Shoreditch. While the creative community has historically shaped development of this area, many business and financial services companies also have been making use of the disused factories that were abandoned in Hackney from 2000.

3.21 In 2010, Hackney hosted 88,905 jobs, and 44% of this employment is in Shoreditch. Technology, creative industries and business services make up 37% of employment in the borough and 17% of jobs are provided by retail and hospitality. Creative employment is concentrated mainly in architecture, advertising and media. Tech employment is primarily computer consultancy, programming and telecommunications. Business services include management consultancies, financial services and head offices.

3.22 Initially dubbed the ‘Silicon Roundabout’, the primary location is in Shoreditch; however, the cluster has expanded into the area around London Fields (Hackney Central) as well as into Dalston and Hackney Wick. The buildings remaining after London 2012 provide a huge opportunity to capitalise on this growth.

3.23 In keeping with the typical profile of these industries, this cluster is intensely entrepreneurial as Hackney’s self-employment rates have been consistently 2% higher than London’s rate. In 2011, the self-employment rates were 16% for London and 18% for Hackney. Inter-industry collaboration, flexible careers and sole trader microbusiness move fluidly between sectors and use classes in Tech City making the multi-industry workspace a dominate office style in Hackney.

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Office of National Statistics, Inter Departmental Business Register, 2012

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3.24 This entrepreneurial flow enables an upgrade and expansion of the business stock as the maturing cluster attracts larger firms and new international brands. The total jobs in Hackney is 93746 as of 2011. This is higher than the 2012 GLA projection for Hackney of 86,000. Hackney’s ability to grow its jobs is being constrained by the lack of available floorspace which the proposed change in PD rights would only exacerbate.

3.25 The growing importance of Tech City has also been recognised by Government. In November 2010, the Prime Minister stated “Here is our vision for East London Tech City - a hub that stretches from Shoreditch and Old Street to the Olympic Park”. On the 6th December 2012, following on from previous supporting statements for the development of East London Tech City, the Prime Minister announced a major Government investment here. The ‘No.10’ press release stated that “the Government will put £50m towards a visionary project to regenerate the Old Street roundabout, which will see it transformed into Europe’s largest indoor civic space, dedicated to start-ups and entrepreneurs in East London.

3.26 In the first nine months of 2012, the TMT sector acquired almost 1 million square feet in the City, an increase of 39% on the same period last year – and more space than the financial and insurance sectors combined. Companies from all over the world are coming to Tech City. Here are just some of the companies who have set up here in 2012 - Yammer; Google Campus; Amazon; Qualcomm Europe; Vodafone; Intel; Silicon Valley Bank; General Assembly; Central Working, in partnership with Barclays; SPACE Studios, in partnership with Bloomberg and the Olympic Park Legacy Company opened The White Building; The Hoxton Mix; Uber; Hotel Tonight; Makielab; Lyst; Huddle and Songkick.

3.27 The Prime Minister said:

“Two years ago I set out my commitment to help Tech City become one of the world’s great technology centres. Today we are seeing it continue to grow and go from strength to strength – and that is down to the talented, creative entrepreneurs who have set up there. The UK is in a global race and I am determined that we as a Government continue doing everything we can to equip the UK to compete and thrive in that race. As well as backing the businesses of today, we are creating an aspiration nation and also backing the innovative, high-growth businesses of the future. That’s why we’re investing in creating the largest civic space in Europe – a place for start-up companies and the local community to come together and become the next generation of entrepreneurs.”

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3.28 The Mayor of London Boris Johnson said:

“The 2012 Games were a catalyst for enormous change in East London, with a new quarter of the capital now primed to become the world’s most thriving centre for technology and innovation. The time is right to lay solid foundations in Tech City for London’s digital revolution, and this list of major new firms committing to the area is a testament to the confidence leading tech entrepreneurs have in the capital. Our new centre will provide not only a vital resource to nurture upcoming technology and creative superstars from around the world, it will drive huge investment into the capital and help create thousands of jobs.”

3.29 Joanna Shields, incoming CEO of Tech City Investment Organisation (TCIO), said:

“Tech City has become a thriving hub of tech-based enterprise and creativity. We have a vibrant community here full of exciting emerging businesses that are growing alongside some of the world’s most respected tech companies. We have the opportunity to take this momentum and make Tech City the global leader in tech innovation and the location of choice for start-ups and growth businesses.”

Tech City: The Hackney Experience

3.30 Digital firms’ preference for urban areas is motivated by the characteristics of the office space available in city centres. Price and transport accessibility are the two primary factors in firm location. The empty factory spaces also lend themselves to the flexibility required by technology, creative and knowledge sectors.

3.31 When creative and digital firms began to fill in the warehouses of Shoreditch in 2003, the average price per square foot was around £15. The typical space provided open plan banks of desks with an enclosed meeting space and a kitchen. This basic provision is the foundation of every urban digital cluster that has formed in the last decade. A business moving from a coffee shop or home set up into the first office can often times only afford a desk, phone and postbox.

3.32 Urban office space has evolved to not only fill these basic needs, but to include benefits of networking events, business support and continuing education. An urban workspace literally fosters growth and collaboration. This built environment provides the platform for the cross-sectoral growth Deloitte observes as exchanges between designers, programmers and artists create the next social media trend or manufacturing breakthrough. The need for affordable space allows incubation of textile manufacturers, graphic designers, data companies and musicians to co-exist in the same office unit.

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3.33 As rents increase to £35 per square foot today, this mix stays roughly similar. Higher value start-ups still require the basic services of a co-working space in addition to higher quality amenities such as a bigger event space or an onsite restaurant/café. The flexibility across use classes also remains the same. Shoe manufacturing would have once been classed as light industrial in Hackney’s original factories, are now occupying B1 space with 3D printers which are revolutionising industrial processes and consequently making them appropriate for occupation of office space.

3.34 Hackney’s demand for office space broadly reflects the need for small, affordable space with a package of amenities. Between 2004-2012, 48% of Hackney’s demand for office space was for property under 1,000sqft. Another 20% of demand during this period came from office space between 1,000-2,500 sqft. This means nearly 70% of Hackney’s office demand during the emergence of Tech City has been small offices under 2,500sqft. This demand has remained roughly stable during the recession.

3.35 As the cluster has matured and international and corporate firms move into the area, prices have gone up to £40 per sqft in some areas and larger spaces are in demand. Companies with more than 15 employees have increased interest in the area and are looking to rent out studios or large blocks of office space. Hackney’s inward investment statistics demonstrate a 74% increase in demand for spaces between 2,500sqft and 5,000 sqft between 2006-2012. After a small dip in 2008, demand for this office size has increased year on year. This demand is directly increasing prices as the price per square foot gain has occurred since 2009.

3.36 Presently, all of Hackney’s workspaces report an extensive waiting list and as a result they have begun to diversify their offer. The market is in a position to mix space for larger firms, alongside a set of hot-desking spaces and the rental of seats within communal facilities such as kitchens and common rooms.

3.37 This method of pricing and space allocation has increased the amount and types of companies that can fit into a typical office as international companies looking to break into new markets send a single staff member for part time office occupation and large firms bring 20 employees into a space that was allocated for hot-desking. This flexible provision is causing the productivity of commercial space in terms of the number of companies and employees per floor to increase rapidly. 3.38 The 2012 London Office Policy Review devotes two chapters to the

phenomenon of flexible use and cross-sectoral occupation. The report observes business services, IT and media utilise anywhere from 9-12 sqm per employee and these densities are rising on average with new builds and refurbishments of office stock.

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3.39 Hackney’s own statistics demonstrate higher employment densities similar to those found in the London Office Policy Review with some workspaces quoting flexible usage that could take these densities to as low as 6sqm per employee that include companies that work internationally, sub contract their space to off-hours firms and those which work from a bank of freelance employees.

3.40 The density rates demonstrated in the digital economy can have profound effect on estimated employment capacity as well as forecasts based on expected employees per workspace. The growth potential for Tech City is underestimated based on typical London office density estimations. The new trends in building usage enable additional employment, business development and collaboration—all key components of growth.

Tech City: Demand vs Supply

3.41 Given the fluidity of the London office market it is difficult to provide a comprehensive demand vs supply picture at any particular point in time, not to mention predict accurately into the future. What has been demonstrated above is that the Tech City phenomenon is currently, and if nurtured effectively, will continue to be a significant growth driver for London of national significance.

3.42 The London Office Policy Review (LOPR) 2012 (Figure 7.19) concludes that Hackney has a supply pipeline of 197,144sqm versus demand between 2011-31 of 117,631sqm. The LOPR demand figure is broadly consistent with the Council’s own evidence base which predicts a demand of 86,841sqm of B1 floorspace over a shorter period between 2010-2025. While the supply / demand comparison of 168%, based on the LOPR 12 figures, compares favourably with other London Boroughs, pipeline figures can change drastically as schemes are not progressed to construction or the planning permission lapses.

3.43 More useful is the net uplift of B1 floorspace delivered and in the pipeline now which has been calculated in Table 3 below using London Development Database (LDD) data. Between the 1st April 2008 and 21st March 2012 the net uplift of B1 floorspace actually delivered (built) in PEAs stood at 16,293sqm while the pipeline of live applications was 58,697sqm. These latest figures demonstrate that demand (LOPR12) between 2011-31 is in excess of the most recent pipeline of net uplift of employment floorspace. This lends further support as to why rents have increased, particularly in Shoreditch, from £15psft in 2003 to up to £40psft today for the best quality space as mentioned above.

3.44 The London Office Policy Review 2012 (Figure 7.20) also concluded that Hackney had one of the highest (2nd) average annual completions of office space between 2000 to 2008 which further demonstrates overall growth in the borough.

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3.45 Figures 8.6 and 8.10 of LOPR 12 identify Hackney as one of lead boroughs for converting office floorspace to residential. This case is supported by Hackney’s LDD data outlined in Tables 2 and 3 below, which shows a significant amount of residential and other uses have been provided and are in the pipeline for delivery in Hackney’s PEAs. Importantly though, as confirmed in para 8.6.1 of the LOPR12, ‘The evidence indicates a variation in the scale of B1 conversions with boroughs like Hackney and Islington having a large number of sites, but a relatively low loss of B1 floorspace, while Hounslow for example experienced a relatively small number of large scale office conversions between 2009 and 2012 (Figure 8.8).’

3.46 These conclusions add weight to the arguments outlined in detail in the following section that Hackney is achieving a good balance between redeveloping poor quality B1 floorspace as part of mixed use development. The higher value uses delivered as part of these mixed use schemes, such as residential, help to subsidise the delivery of new better quality B1 floorspace that’s of a specification demanded by the market. A key determinant for the Council in following this policy approach in its adopted Core Strategy and emerging Development Management Local Plan was the recommendation of the Atkins Employment Growth Options Study 2006 and further update in 2010. A key recommendation of both studies was that a large proportion of Hackney’s employment stock, and potential over supply, was the result of much of Hackney’s stock being of a low quality rather than a lack of demand.

3.47 Since the adoption of Hackney’s Core Strategy in 2010 the promotion of mixed use development in PEA has helped manage down vacancy rates by replacing lower quality space with new floorspace (better suited to the needs of the market) as part of mixed use development. To be able to demonstrate the reduction in vacant floorspace Table 1 below compares what was identified as vacant within Hackney’s Employment Growth Options Study (Atkins) Update 2010 with ‘for let’ figures derived from the Focus Availability Database in February 2013. The Focus Database is considered a reliable and up to date resource as it consolidates floorspace ‘for let’ from most agents active in London. In comparing both resources it can be seen that vacant floorspace as identified in the Atkins study from 2010 (Table 4.14) of 139,329sqm has reduced significantly to 40,053 sqm according to the Focus Database. This is a significant reduction (over 75,000sqm) over the last few years.

3.48 While the geographic coverage of the Atkins study and the Focus Database differ slightly they can still be compared usefully to compare vacancy across the broad areas covered by Priority Employment Areas and conversely the areas covered by this exemption bid (the areas included within this exemption bid are in italics).

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Table 1: Reduction in vacant office floorspace

Sub Area 2010 Atkins (m2)

Focus Database (m2) – Feb 12

Focus Database (Sq ft) – Feb 12 Shoreditch / City Road /

Canal Side 104724 30763 331134

Dalston/ Kingsland 11451 4724 50850

Mare Street 7774 2834 30505

Homerton 0 60 643

Hackey Wick / Other 15380 1672 17998

Total 139329 40053 431130

3.49 The above numbers support the conclusions of local estate agents active in Shoreditch and the wider Hackney area. In terms of Shoreditch a local agent states that for buildings that can be occupied immediately vacancy is close to zero. They note that there are a number of buildings on Great Eastern Street, Scrutton Street and Old Street that are vacant and in need of either refurbishments or developments but other than that the vacancy rates are very low in the area matching up with the lack of stock available. Based on the above table, vacant floorspace has reduced by approximately 70% in Shoreditch and by approximately 60% in Dalston / Kingland and Mare Street.

3.50 Local agents currently advise clients that most buildings for let generally take between 3-6 months for secondary space regardless of size. This time period allows room for contingency marketing should it be required. 1,000 – 2,000 sq ft floorspace units with the right style and size generally let much faster... For example, Brunswick Place came to the market less than 3 weeks ago and presently has three offers on the table.

3.51 The dwindling supply and increasing demand has had a clear impact on rents in Shoreditch and the surrounding areas. Local agents explain that five years ago the average rents were in the high teens and early twenties, with the Grade A stocks achieving a premium in the region of £25 – £28.50 per sq ft. In the last two years, however, Shoreditch has seen stronger rental growths in the region of 15% per annum according to local agency surveyors’ findings. This is clearly shown by headline rents for Grade A space in the area achieving rental levels in excess of £35 per sq ft currently which was not envisaged by the industry as recent as two years ago. While the market will remain, the ever increasing interest in the area may lead to the average office rents being in the region of £30 per sq ft pushing the smaller companies up towards the outer fringes being Haggerston, Dalston and Hackney Central where the rents are still in the early to late teens.

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3.52 As rents have risen, owners have moved to refurbish property to attract the best tenants. A prime example of a Shoreditch refurbishment is 80 Great Eastern Street, EC2 – once completed it has set the precedent rents in the area being £37.50 - £40 per sq ft over 6,000 sq.ft + floor plates. This evidence has led to building owners throughout the immediate vicinity realizing there are higher returns to be gained which has led to a surge of full refurbishments. This increase in redevelopments and comprehensive refurbishments has impacted the supply chain for office space in the area while leading to a particularly high rental value outlook.

3.53 This growth is allowing a balancing of Hackney’s property demand to include Hackney Central and Dalston. As smaller firms are no longer able to afford the prices in Shoreditch, the rest of the borough is accommodating not only new knowledge businesses but also the cafes and restaurants that come with them.

3.54 Finally, local agents confirm that the majority of the demand is for office space for between 0 – 3,000 sq ft with single floor plates preferred. In addition there is also huge demand from the established TMT sector companies wanting to get on board of the ‘Silicon Roundabout’ initiative looking for space in excess of 5,000 sq ft to which there is nothing presently available apart from the new builds currently under construction such as the Ixia scheme on East Road and 76 East Road nearby.

Tech City: From Shoreditch to Dalston and Hackney Central

3.55 Following on from the information outlined above, what is most significant about the Tech City boost is its growth in the face of falling demand across the city. Tech City shows that without government support, the industry is still robust enough to overheat a local property market and catalyse growth to the next size up in areas such as Dalston and Hackney Central and possibly further. The significance comes from two places, the future growth of a hot industry and the powerhouse a small band of workspaces have become.

3.56 As a result of this growth many businesses, including start ups and SMEs are either being priced out of Shoreditch and/or are not able to find available space. For this reason Tech City and related clusters are beginning to locate along Kingsland Rd to Dalston and along Hackney Rd and Mare Street towards London Fields / Hackney Central. As outlined in Table 6 below, rents are much lower in Hackney’s other employment areas when compared to Shoreditch.

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3.57 The other benefits of these locations in addition to having lower rents are: the availability of small and medium size floor spaces most in demand by Tech City business; existing healthy cluster of related sectors such as hospitality, retail and leisure uses which have further scope for growth; and like Shoreditch they have high levels of public transport accessibility.

Dalston

3.58 Focusing first on Dalston / Kingsland PEA (also located within the Dalston Area Action Plan) a number of planning applications have been recently been approved which continue the borough wide trend of redeveloping lower grade employment space for better quality space required by the market as part of mixed use schemes. Some examples of these schemes are included below –

Alpha House – Tyssen Street, Dalston (Opportunity Site K) – Ref 2012/1449

Existing floorspace (m2) Proposed floorspace (m2) Alpha House – Tyssen Street, Dalston (Opportunity Site K)

Residential (C3) - Private NA 17 Residential (C3) – Affordable NA 2 Employment (B1) 870 sqm B8 (employs 4 people) 631 sqm B1(employs 88 people)

25 – 27 Dalston Lane (Opportunity Site J2) – Ref 2012/1695

Hotel (C1) NA 3,257 sqm (90 rooms)

Car park (Sui Generis)

1,161 sqm NA

55 Dalston Lane – Ref 2012/2379

Residential (C3) - Private NA 396 sqm (3 units) Employment (B1) 743 sqm (and 440sqm

live/work)

548 sqm (440sqm live/work)

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3.59 There are also several schemes proposed to be delivered by both the private sector and Hackney Council in the short term (within 5 years) which is a strong indicator of demand for floorspace to accommodate tech city related businesses within Dalston. Such schemes include:

 The Dalston Community and Creative Quarter – the Council is currently pro-actively taking forward comprehensive development of Council owned sites in the heart of Dalston to deliver a vibrant, exciting quarter with a community and creative focus that builds on the existing character and community/creative uses within the area and meets identified needs for additional start up as well as grow-on space for existing businesses and those wishing to locate within the area. This scheme will deliver approximately 3,000 sqm of new floor space to accommodate start up and grow on businesses as well as approximately 2,000 sqm of new retail and leisure uses to support the new businesses. Soft market testing with an extensive range of potential development partners has further confirmed the appetite for such floorspace within Dalston. In particular, local evidence from existing anchor start-up floorspace provider ‘Colourworks’ indicates that they are currently at full capacity with some floorspace being let at approximately £30 per square foot, which is significantly higher than average rents of around £15psft in the area.

 Thames House and adjacent site on Dalston Lane – These large privately owned sites within the PEA are likely to be delivered in the short term and will provide approximately 3,000 sqm each (6,000 sqm combined) of new floorspace to attract new businesses.

3.60 In additional to new B1 floorspace coming on-line Dalston has a growing leisure and night time economy to support the creative industry. For example, the Kingsland Shopping Centre Site (large, centrally located site) is likely to be re-developed in the short term to provide a mixed use scheme with a new public realm through the town centre. This major redevelopment is likely to deliver approximately 20,000 of new retail floorspace and approximately 8,000 of this will be leisure related in the form of new cafes, restaurants and bars with spill out spaces onto the new vibrant public realm.

3.61 The catalyst for the above development delivery is not only the demand created by infiltration of Tech City related business that are attracted into Dalston, but also the recent transport infrastructure upgrade provided for the 2012 Olympic and Paralympic Games. Such infrastructure upgrades include a new London Overground station Dalston Junction with direct connections to The City as well as improvements to the existing London Overground railway (formerly North London Line) including new trains with increased capacity and frequency. From the above, it is clear that the London Plan 2011 designation of Dalston as an Area of Intensification is justified. In total the Dalston AAP envisages 1,768 new homes, 15,880 sqm of

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employment and 32,797sqm of retail floorspace over the life of the plan.

Hackney Central

3.62 Like Dalston, Hackney Central’s (Mare St PEA) existing employment floorspace is being upgraded as part of the planning process. Examples of recent schemes are included below –

195-205 Richmond Road - Ref 2009/3002

Existing floorspace (m2) Proposed floorspace (m2)

Residential (C3) - Private NA 4568 Residential (C3) – Affordable NA 2335 Employment (B1) 3604 2436 A1/A3/B1 NA 370 A1/A3 Na 227 13-18 Sidworth Street - 2012/1641

Residential (C3) - Private NA 2261 Residential (C3) – Affordable NA NA Employment (B1) NA 1,100 Employment (B2) 1,100

Westgate Centre Westgate Street London E8 3R – Ref 2012/2222

Residential (C3) - Private NA 1109.35 Residential (C3) – Affordable NA 1109.35 Employment (B1) NA 803 B1/B8/sui generis 630

3.63 Hackney Central also has a healthy cultural and creative quarter focused around the town hall square, Hackney Empire and Picturehouse along with a growing night time economy. London Fields / Mare Steet PEA has a significant number of industrial and B1 floorspace which are continually being upgraded through the planning process suitable for small to medium sizes businesses which are the corner stone of emerging new growth in Tech City.

3.64 This PEA in particular shares many similar characteristics with parts of Shoreditch in its early days of Tech City growth and also benefits from its close location to Broadway Market which is one of the more vibrant local markets in London.

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3.65 Hackney Central is also the location of the emerging Fashion Hub concept which is to be located in the Homerton PEA to the north east of the town centre. The scheme is to be delivered over several phases and will incorporate monies secured from the Mayor’s Regeneration Fund (£1.5m secured for phase 1) along with Council investment. Network Rail is also investing £3.8m into phase 1 and 2 of the scheme. In total the fashion hub will provide 400 jobs across over 5,000sqm of retail and employment floorspace. The B1 floorspace will provide flexible workshops for manufacturing retail apparel and will sit alongside more established retail brands.

3.66 Not only will the Fashion Hub help regenerate the Homerton PEA it will have wider benefits on the Hackney Central town centre through diversifying its retail offer and attractive new investment and jobs into the area. While the Fashion Hub is strictly not part of the Tech City cluster it has been demonstrated throughout this submission that retailing, hospitality and leisure users positively co-locate with Tech City.

3.67 Like Dalston, Hackney Central is included within an adopted Area Action Plan which outlines a pro-growth strategy identifying the opportunity to deliver 1,221 homes, 14,268sqm of employment / office and 24,708sqm of retail floorspace over the next 15 years.

Hackney’s policy approach to Employment Land

3.68 The Government’s planned blanket approach to change of use from office to residential will have a detrimental impact on Hackney’s nationally significant employment land of Shoreditch, Dalston and Hackney Central as outlined in Appendix 1. The Council’s employment policies are based on robust evidence which has been found sound as part of the Examination in Public to the Council’s Core Strategy which was adopted in November 2010. The Council is in the process of providing further policy clarification to support the strategic policies of the Core Strategy as part of its Development Management Local Plan. These policies are responsive to Hackney’s local context while being consistent with the regional aspirations of the London Plan, the requirements of the NPPF and ensuring enough employment land remains in the borough to service the nationally significant business and finance sectors and the increasingly important tech city concept. 3.69 The Council’s NPPF-compliant policies are flexible in that they take

account of market signals through the submission of marketing evidence when seeking to release employment land; requiring a marketing strategy to ensure any new employment floorspace is designed with end users in mind and therefore will be let, as well as wider issues around economic viability. Together these policies essentially seek to allow mixed use development in the borough’s Priority Employment Areas (PEAs) where higher value uses such as

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floorspace than what existed on the site previously. In many instances the provision of new market-ready floorspace enables the employment generation of the site to be enhanced significantly even when, in floorspace terms, the amount provided is equal to or less than that which existed previously on the site. It is also important to note that Hackney’s entire employment land designations cover only 6.1% of the Borough’s land area, this includes the CAZ designation (CAZ covers 2.7% of the Borough’s land area). The CAZ and the areas identified northwards to Dalston and Hackney Central / London Field which make up this exemption bid total approximately 4% of Hackney’s entire area. 3.70 This approach to refreshing existing poorer quality employment floorspace through mixed use redevelopment is consistent with the Council evidence base which confirms that a large proportion of the Council’s existing floorspace is not fit for purpose, primarily dated industrial space. In essence it is believed the Council’s employment policies strike the right balance between providing better quality employment floorspace along with other uses where appropriate such as housing. The success of this policy approach is evidenced by tables 2 and 3 below which shows that between 2008 and 2012 over 1500 dwelling units have been delivered (completed) in PEAs. This represents 27% of the borough’s total units (of 5736) completed during this period which is made even more significant by the fact that only 6.1% of Hackney’s total land mass is designated for employment purposes. The bulk of this housing has been delivered in the PEAs subject of the Cat A bid being Shoreditch, Wenlock, Kingsland, Mare Street, Dalston and Homerton.

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Table 2: Completed development within PEAs

3.71 In addition to new housing, redevelopment in PEAs during this period also yielded in excess of 7500sqm of A class uses, over 7000sqm of D class uses and nearly 300 hotel rooms. This uplift has been delivered alongside a net uplift of over 16,000sqm in B1 floorspace during a period characterised as one of the worst recession in a generation. This rate of delivery is a testament to the resilience of Hackney’s office market and the success of the Council’s employment policies. As can been seen from Table 3 the composition of live planning applications (or pipeline) within the PEAs is similar with 1349 dwellings, over 9,000sqm of A class and over 18,000sqm of D class uses granted planning approval. Again this uplift in other uses is accompanied by nearly 59,000sqm of B1 floorspace which again demonstrates the strong demand for new office floorspace in the borough moving forward.

Net gain/loss (sqm) unless otherwise specified

B1 B2 B8 C3 (units) A1 A2 A3 A4 A5 D1 D2 C2 C1 (bed rooms ) SG Floor space Red Square 815 0 -909 17 0 0 0 0 0 0 0 0 0 0 Belfast Road 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Prout Street 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shackle well 210 0 0 1 0 0 0 0 0 0 0 0 0 0 Theydon Road 0 0 228 78 0 0 0 0 0 0 0 0 0 0 Tilia Street 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Hackney Downs 0 0 0 1 0 0 0 0 0 0 0 0 0 0 Anton Street -175 0 0 23 0 0 0 0 0 0 0 0 0 0 Homerto n -2225 0 -3806 249 -937 641 0 0 0 0 0 0 0 -546 Dalston -2207 -595 -838 149 0 0 0 0 0 1222 0 0 0 0 De Beauvoir 0 0 0 1 0 0 0 0 0 0 0 0 0 0 Mare Street -1358 307.00 -2724 328 437 -152 84 0 0 1796 152 0 0 -184 Kingslan d 3328 0 2652 350 710 0 225 0 0 0 0 0 0 0 Wenlock 2319 548 6132 134 378 378 -205 0 0 2543 1323 0 0 -2465 COMPL E T ION S: Prio rity Emp lo y men t Areas Shoredit ch 15586 0 -6733 198 2774 2393 785 0 0 -1228 1350 0 283 1124 Total 16293 260 -5998 1529 3362 3260 889 0 0 4333 2825 0 283 -2071 Borough as a whole 3451 -10104 -22570 5736 10059 2959 2961 -2470 -76 46545 5646 2654 288 -5679

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Table 3: Development pipeline in PEAs

Hackney’s housing delivery

3.72 An added reason for seeking an exemption to the Government’s changes in Hackney is the borough’s current rate of success in terms of consistently exceeding its London Plan derived housing targets. The borough’s current housing target is 1160 dwellings per annum. Over the past 5 years (2007/08 to 2011/12) the borough’s housing completions has totalled 7281 new homes which on average equates to 1456 new homes per annum. The Council’s ability to continue exceeding its housing target over the next 5 year is also secured by proactively designating land for housing purposes. Table 4 below shows that land designated for housing across Area Action Plans, the Sites Allocation Local Plan, approved as outstanding planning permissions and the Council’s estate renewal programme should deliver approximately 8065 dwellings over the next 5 years between 2012 and 2017. This is 39% higher than 5800 dwelling that will be required based on Hackney’s currently annual London Plan target. Further housing projections are available over the long term within each of these housing streams.

Net gain/loss (sqm) unless otherwise specified

B1 B2 B8 C3 A1 A2 A3 A4 A5 D1 D2 C2 C1 (bed room) SG Floor space Red Square 0 0 0 2 0 0 0 0 0 0 0 0 0 0 Belfast Road 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Prout Street -38 0 0 77 0 0 0 0 0 0 0 0 0 0 Shackle well 0 0 0 3 419 -38 0 0 0 0 0 0 0 0 Theydo n Road 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tilia Street 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Hackne y Downs 0 0 0 0 0 0 0 0 0 0 -419 0 0 0 Anton Street 0 0 -395 9 459 0 0 0 0 0 0 0 0 0 Homert on -6573 487 232 6 160 0 0 0 0 8466 0 0 0 -50 Dalston -354 0 0 7 0 0 0 0 0 312 0 0 70 -590 De Beauvoi r 0 0 0 0 0 0 -36 0 0 0 0 0 0 36 Mare Street 917 0.00 -3604 124 630 0 298 0 0 1585 144 0 0 262 Kingsla nd 1945 0 -2879 212 92 0 282 190 0 -1248 190 0 0 -250 Wenloc k -2932 -11950 517 1147 866 256 -119 0 5124 0 0 498 -1342

PIPELINE: Priority Employ

ment Areas Shoredi tch 66002 -400 -824 392 3720 185 2022 -1309 24 2535 1514 0 908 -6321 Total 58967 87 -19420 1349 6627 1013 2822 -1238 24 16774 1429 0 1476 -8255 Boroug h as a whole 16027 5 -6814 -24992 6103 12277 757 2815 -3297 -703 66707 3597 9173 1794 31346

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Table 4: Projected housing delivery (2012 – 2017)

Five year supply consists of: Projected net new dwellings 1st April 2012 - 31st March 2017.

Estate Renewal Projects 318

Hackney Central AAP 775

Dalston AAP 529

Manor House AAP 143

Hackney Wick AAP 608

Supply from Site Allocations 2331 Outstanding Planning Permissions (after 84% implementation rate is applied) *

2361**

Returns from Vacant 1000^

Total 8065

London Plan Target 5800

NI159 Percentage 139%

3.73 Importantly, sites located within Priority Employment Areas are also designated as having potential for others uses, such as residential, alongside employment floorspace, both within adopted Area Action Plans and the emerging draft Site Allocations Local Plan (SALP). Of the 62 sites identified in the SALP as having strategic importance or having capacity for significant development, 33 are located in PEAs and are expected to generate 4390 homes over the next 15 years in addition to non residential floorspace including B1. A list of the SALP sites located in PEAs is outlined below in Table 5.

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Table 5: Strategic sites (identified in Hackney Sites Allocation Local Plan) located in PEAs and having potential to deliver housing PEA Ref Name Site Area (Ha) Refurbishment / New build Indicative Commercial and other non residential floorspace (SQM)

Indicative no of residential units Estate Renewal Programme

Mare St 15 King Edwards’s Road 0.26 New build 30

Wenlock

16 St Leonard's Court and adjacent land 0.55 New build 72

Sites within the Shoreditch

Wenlock ₂₇ _{213-215 New North Road} _0.27 _{New build} ₇₇₆₂ ₇₁

Shoreditch

95 12 - 20 Paul Street 0.40 New build 18026 165

Shoreditch

99 102 – 110 Clifton Street 0.26 New build 4429 40

Shoreditch

100 64 - 80 Clifton Street and 4 - 8 Holywell Row 0.17

Refurb and

New build 3741 34

Shoreditch

101 Holywell Row at Junction of King John Ct 0.35 New build 13362 122

Shoreditch

103 35 – 45 Great Eastern Street 0.11 New build 5472 50

Shoreditch

107 Telephone Exchange, Shoreditch High Street 0.22 New build 8275 76

Shoreditch

108 Bishopsgate Goodsyard, Shoreditch High Street 1.25 New build 135033 462

Shoreditch

115 EDF Energy Substation Site, 10 Appold Street 0.50 New build 24194 221

Shoreditch

121 110 Tabernacle Street 0.38 New build 14505 132

Shoreditch

122 Old Street Magistrates Court, 337 Old Street 0.23

Refub and New

build 7512 69

Shoreditch

125 Street block bounded by Curtain Road, Worship Street 1.70

Refurb and

New build 50568 432

Wenlock

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Wenlock

127 Crown House, 145 City Road 0.33 New build 52949 484

Shoreditch

128 Land bounded by Curtain Road / Hewett Street 0.72 New build 24433 223

Shoreditch

130 Site at Junction of Shoreditch High Street and Commercial St 0.37 New build 6695 61

Wenlock

131 Shoreditch Police Station, 2- 4 Shepherdess 0.28

Refurb and

New build 9218 84

Shoreditch

137 84-90 Great Eastern Street 0.21 New build 14443 132

Shoreditch

138 Site bounded by Clere Street and Tabernacle Street 0.18 New build 6658 61

Shoreditch

139 Site of 5-13 (9consec.) Holywell Lane 0.30 New build 5474 50

Wenlock

159 15-21 New North Road 0.24 New build 6503 59

Wenlock

160 Site bounded by Corsham Street and Brunswick Place 0.43 New build 14955 137

Shoreditch

204 10-50 Willow Street 0.19 New build 5129 47

Wenlock

207 22 Micawber Street 0.31 New build 11802 108

Wenlock

208 1-3 Wenlock Rd N1 7SL & The Brewery Ind Estate 0.22 New build 8206 75

Wenlock

209 (Unit A-F) 18-42 Wharf Road 0.68 New build 36982 338

Shoreditch ₂₃₃ _{113-137 Hackney Road} _0.27 _{New build} ₈₇₇₆ ₈₀

Shoreditch

244 1-14 Long Street 0.54

Refurbish and

New build 12152 111

Hackney Central and Environs

Mare St ₁₆₆ _{Land bounded by Mare St, Warburton Rod} _0.52 _{New build} ₁₃₉₃₈ ₁₂₇

Mare St

271 164-170 Mare Street 0.12 New build 1597 15

Sites in north Hackney Prout St

256 Tram Depot, 38-40 Upper Clapton Road 0.59

Refurb and

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Residential vs Office values

3.74 The above information demonstrates that the Council’s policies have been successful in delivering new and better quality employment floorspace along with a significant quantum of other uses including residential. Residential values in Hackney have continued to appreciate despite the financial crisis. Most of the borough benefits from public transport accessibility levels of 6 (PTAL 6 being the highest possible) which was recently improved further by the opening of the ELLX in 2010. Crossrail will further support Hackney as a viable office location once implemented.

3.75 Office values on the other hand, whilst having held up reasonably well in Hackney, have not increased to the same degree as residential. This has further exacerbated the differential in land values between office and residential floorspace. The Government changes will probably therefore result in schemes that would have previously been viably delivered as mixed use schemes, including a significant proportion of B1 floorspace, coming forward as purely residential schemes.

3.76 To help highlight this case the Council has sought to compare employment and residential land values in certain PEAs throughout the borough. This analysis demonstrates that residential values are considerably higher than office values in all instances. In order to compare ‘like for like’ office rental values (psqft) have been capitalised to give a sale value which can be compared against residential sale values (psqft). These are tabulated below.

Table 6: Average sales values of resi v office floorspace

Area Average resi

values £s per sq m Average resi values £s per sq ft Average office rental values £s per sqft Shoreditch N1/EC2 6,535 700 25 to 38 Haggerston E2 5,020 550 18 Dalston E8 5,651 525 15

Hackney Wick E98 4,306 400 n/a

Clapton E5 4,009 438 X

N16 and Hackney Central 5,382 500 13 to 15

Finsbury Pk/Woodberry N4 5,113 475 X

Stamford Hill N15 4,306 400 X

8

Excludes the area previously covered by the Olympic Delivery Authority which was transferred to the Mayoral Development Corporation (‘MDC’) on 1 April 2012. From 1 October 2012, the MDC will be a planning authority and a CIL charging and collecting authority.

London Borough of Hackney