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A Report from the CB Richard Ellis

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© CB Richard Ellis 2006

No part of parts of this report may be stored in a retrieval system or reproduced or transmitted in any form or by any means electronic, mechanical, reprographic, recording or otherwise, now known or to be devised, without prior written consent from CB Richard Ellis.

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The CB Richard Ellis Future Cities research programme examines how a variety of economic, social and political factors are influencing the structure and development of Europe’s leading cities. The programme focuses on major strategic issues and is designed to assist all those with an interest in the built environment to identify longer term trends and structural changes in particular property markets.

Transport Change and the London Property Marketis one of a series

of reports that looks at how major transport infrastructure projects will influence occupation, development and investment activity in a number of European Cities.

For further infomation on the contents of this report, please contact:

Richard Holberton

St Martin’s Court, Paternoster Row London, EC4M 7HP

T: +44 207 182 3348

E: richard.holberton@cbre.com

Samantha Pratt

Kingsley House, Wimpole Street London, W1G 0RE

T: +44 207 182 2501 E: samantha.pratt@cbre.com

For further infomation on the CB Richard Ellis Future Cities Research Programme, please contact:

Nick Axford

St Martin’s Court, Paternoster Row London, EC4M 7HP

T: +44 207 182 3039 E: nick.axford@cbre.com

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Executive Summary

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Section 1.0

Introduction

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Section 2.0

Current Physical Market Structure

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Section 3.0

Current and Future Development

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Section 4.0

Current Transport Infrastructure

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Section 5.0

Major Transport Issues and Opportunities

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Section 6.0

Major Infrastructure Proposals

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London is the economic and financial capital of the UK, and accounts for over 15% of its GDP. The population of the Greater London area has been growing steadily for over 15 years, and has been rising at over 1% per year since the early part of this decade. The population is forecast to rise by a further 10% over the next ten years to over 8 million, with the working age population alone growing by well over 600,000.

The London economy is dominated by service sector activity, with particular emphasis on high-grade internationally-traded financial services. Finance and business service companies employ around 1.3m people in London, and are very highly concentrated within the central area. Net commuting into the central area is on a long-term upward trend, the majority originating in suburban London and the inner South East. It is expected to increase further over the next decade, as a consequence of rising employment and a wage premium relative to the rest of the UK. This will generate increasing demand for transport services in and around London.

The strategic planning framework for London is articulated in the London Plan which aims to provide a spatial development strategy for the capital over the period to 2016. The plan recognises the likelihood of high levels of population and employment growth in the London area, and seeks to accommodate forecast growth within London’s boundaries, without encroaching on the

surrounding Green Belt or London’s own open spaces. It seeks to direct large scale high-density development towards

previously-developed “brownfield” sites that are highly accessible by public transport.

Given the expected level of growth, the plan recognises the need to direct development towards areas of London that are currently under-used or developed at lower densities than the congested central area. Accordingly, the eastern segment of London is identified as a priority area for accommodating future growth and development. This reflects both the current agglomeration of business and world-city functions in the City and Canary Wharf, and the relatively plentiful supply of land in the Thames Gateway area on the eastern side of London.

However much of this area suffers from poor transport provision, so investment in transport infrastructure is crucial to fulfilling this goal. The desire to re-use existing sites for high-density

development has also refocused attention on allowing high-quality tower buildings within the Central London core.

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Construction activity within London has recently passed a cyclical low point and is now showing clear signs of increasing. The distribution of current construction activity reflects the fact that it is easier to undertake large-scale development in the City than in the West End. The geographical pattern of large-scale development proposed for London in the medium-term shows a focus on areas on the fringes of the established commercial core, with particular emphasis on the areas around railway termini and extensions to existing strategic fringe development areas. To an extent this is consistent with London plan goals, although development pressure in the more peripheral parts of the Thames Gateway remains limited and is critically reliant on accessibility improvements.

London’s current transport system carries almost 1 million people into Central London during the morning peak and supports a total of 26 million journeys made in the city each day. Car and

underground usage are generally declining, while bus and rail travel are rising. Despite this, over 40% of those who enter London by rail during the morning commuter peak use the underground to continue their journey, but it is expected that dissatisfaction with the underground network will continue to cause a decline in usage. Similarly, increasing charges for car use in Central London are likely to contribute to the shift to bus and train travel.

Demands for both private and public transport in London have generally risen over for the last ten years or so, and it is widely considered that transport infrastructure has not kept pace with the increasing demands made on it. In particular the capacity and reliability of the central area transport network and high levels of traffic congestion are causes of concern. Improvements to London’s transport system are regarded as highly desirable by residents and workers, as well as crucial to the development aspirations of the London Plan.

There are numerous new transport schemes planned for the London area over the next 10-15 years, some of which have the scope to introduce fundamental shifts in the pattern of accessibility around London. These are mostly focussed on the main rail network but also include a number of local and suburban schemes. While some remain subject to uncertainty over funding and delivery, in combination the proposed schemes could produce far-reaching shifts in patterns of accessibility in Central London and beyond.

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The significance attached to a number of these schemes has grown since the award of the 2012 Olympics to London. While the transport schemes planned for delivery before 2012 are not directly related to the Olympics, the transport demands of the games will clearly heighten the need to deliver on transport commitments. It is likely that those transport schemes that focus most directly on the Olympic stadium area, and by extension, the wider East London area, will be accorded greatest priority over the next six years thereby heightening the accessibility benefit to this part of London.

The main benefits of the planned transport schemes in areas with the potential to accommodate large-scale office development are likely to accrue in key nodes on the edge of the Central London core including King’s Cross, Paddington, the Isle of Dogs, the City Fringe, Farringdon and London Bridge. In this respect the pattern of infrastructure benefits on the one hand and planning and spatial policy goals on the other are self-reinforcing.

More broadly, we identify groups of locations where we expect to see greatest benefit in terms of value and development potential from transport improvements. These are:

A strategic ring of locations at or near existing railway hubs (such as Kings Cross, Paddington, Euston) where development will be facilitated by a combination of the Channel Tunnel Rail Link, Thameslink 2000 and Crossrail and will result in physical expansion of the core Central London commercial area.

A related group of locations towards the edges of established commercial areas, including the fringe of the City and Docklands financial districts. These are generally areas that are well-integrated with the existing commercial core of Central London.

A group of new peripheral nodes, such as White City, Stratford,and Elephant & Castle, some of which are not currently well-integrated with the Central London core, and are therefore more heavily dependent on transport schemes proceeding in order to enhance their connectivity.

A range of suburban areas. Some, such as Croydon and Uxbridge, are established office markets and will see further expansion in their status. Others such as Wembley and Ilford lack substantial commercial markets and will see more marginal benefits as opposed to step-changes as a result of transport improvements.

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There is an established relationship between accessibility and property values. However it is not a straightforward one, and there are some locations in London that command values above those that would be expected purely on the basis of their accessibility profiles. Typically these are the areas where the additional ingredients such as strong image, integration with the rest of London, amenity and cohesion have been achieved most successfully.

While shifts in accessibility are clearly important, therefore, they are not the sole influence on the distribution or appeal of future development opportunities. Alongside the transport improvements identified, the planning policy framework that aims to enhance London’s world city status is a pivotal factor. Two key elements of this, both expected to be retained, are a desire to protect the heritage characteristics of parts of the West End (and the associated benefits of tourism and retailing expenditure) and to support the cluster of high-level financial functions focussed on the City and Canary Wharf.

In addition to these factors, London’s ambitious housing targets mean that many of the areas that could support large-scale commercial development also have substantial residential development targets. In a growing and rapidly evolving city, the greatest opportunities for change in the urban environment will be schemes conceived in areas that both stand to gain in accessibility terms, and are capable of providing a range of civic, leisure and community uses, and a coherent sense of place.

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London is the UK’s major concentration of economic and financial activity, and is expected to experience further substantial growth in population and employment levels over the next ten years. The strategic planning aim of accommodating this growth within London’s boundaries will, among other things, focus attention on areas that are currently poorly served by public transport.

More generally, improvements to the capacity and reliability of the existing transport network are seen as vital to sustaining London’s position as a world city, and there are many new transport schemes planned for the London area over the next decade. These have the potential to introduce major shifts in patterns of accessibility, and hence value, in and around London and to affect the pattern of large-scale commercial development in the London area.

This report addresses some of London’s key transportation issues and opportunities by examining current provision and usage patterns, highlighting some of the problems that currently exist and documenting the main transport schemes proposed. In particular, it focuses on the impact of transport infrastructure improvements on future patterns of large-scale commercial development opportunity in London.

This report is one of a series of similar studies being conducted across a number of European locations by CB Richard Ellis.

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London is the UK’s major concentration of economic activity, and accounts for 17% of UK GDP. The London economy is heavily based on service sector activity, with a particular concentration of high-level international financial services. While there are several well-established suburban markets, the Central London area is the main concentration, and generates very substantial commuter flows from within London and beyond. Net commuting into London is on a long-term upward trend and, with the Greater London population forecast to rise by 10% to over 8 million in the next ten years, further pressure on transport infrastructure will result unless there is significant capacity expansion. As the political and economic capital of the United Kingdom, London is Europe’s richest city and its dominant financial centre. It leads the world in international bond trading, foreign exchange trading and cross-border lending. At £162 billion, London’s economy is larger than that of Finland, Portugal and the Republic of Ireland, and accounts for 17% of the UK’s GDP1.

GGrreeaatteerr LLoonnddoonn is made up of 33 individual boroughs, including the City of London, covers an area of 1,580 sq km2 and has a

total population of 7.3m.

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FIGURE 1: LONDON AND ENGLISH REGIONS

1.www.lda.gov.uk

2.www.visitlondon.com

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Occupational Groups

and Functional

Structure

The CCeennttrraall LLoonnddoonn area within the capital covers only 174 sq km3,

barely 10% of the total Greater London conurbation and is loosely delineated by the loop of the Underground’s Circle line. The River Thames divides the capital into north and south sides, with Central London’s commercial core largely situated to the north of the river. There are four distinct quadrants which make up the Central London market:

The City

The Docklands

The West End

Midtown and Southbank

The London economy is dominated by the service sector, in particular those sectors relating to finance and business services, the public sector, tourism and hospitality as well as the creative and cultural industries. Finance and business service companies employ around 1.3m people in London and 25% of the world’s largest financial companies have their European headquarters in London4. London has

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FIGURE 2: GREATER LONDON AREA AND SURROUNDINGS

3.www.lda.gov.uk

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been highly successful in attracting overseas companies in Europe and currently is the preferred location for more than 13,500 overseas -owned companies from 92 countries.

The CCiittyy ooff LLoonnddoonn forms the historic centre as well as the international financial and business centre of London and is often referred to as “the square mile”. The City houses large banks, investment managers, brokers and securities firms from around the world. This is reflected in the fact that more than 550 international banks and 170 securities houses have offices in London. The majority of the financial occupiers in London (banks and insurance companies) and many of the larger professional services companies (such as lawyers and accountants) are also located within the City. The City contains approximately 69m sq ft (6.5m sq m) of office space accounting for a third of total Central London stock.

During the 1980s, rapid expansion in the financial services sector following deregulation generated unprecedented demand for large office buildings in the City. Planning restrictions within the historic core meant that occupiers, particularly banks, were forced to look elsewhere for modern buildings with large floorplates. This encouraged relocations – initially to areas on the edge of the historic core, but the major beneficiary was the DDoocckkllaannddss market to the east of the City.

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Benefiting from a deregulated planning regime, instituted in order to attract investment to a former docks area significantly in need of regeneration, the area succeeded in attracting a number of major financial sector occupiers. Initially a low cost alternative that thrived due to lack of prime space in the core, today the Docklands area is part of the core Central London market. Since the completion of the Jubilee Underground Line and Docklands Light Railway, increased accessibility has led to key finance, banking and professional services tenants relocating to the area which is now a thriving business and residential community with growing numbers of restaurants, shops and other amenities. At its heart lies Canary Wharf, home to a diverse range of occupiers including a number of leading investment banks and now a major financial district in its own right.

The WWeesstt EEnndd of London has a more diverse occupier base than the City, and is the location of the corporate headquarters for many of the UK’s largest companies. The West End is also the location of the Houses of Parliament, the seat of the UK Government, and the area contains many government ministry buildings and associated agencies. This in turn attracts many representative bodies and other organisations seeking to locate close to government decision-makers. The West End has also long been associated with the creative industries, such as advertising and design, which as a sector generate annual revenues of about £21 billion. The area was originally built as a series of palaces, expensive town houses, fashionable shops and places of entertainment. It still contains most of London's major theatres, and is therefore closely-linked with London’s entertainment industries as well as being a place in which the rich elite resides. The West End is also renowned for its retail facilities which contribute greatly to London’s economy as the second largest business sector and employer in Greater London5. Oxford Street is the busiest

shopping street in Europe, with turnover of £5 billion6, and attracts

around 200 million visitors each year.

The West End commands some of the highest rents in London for offices, retail and residential space, with office space in the Mayfair and St. James submarkets attaining peaks of £85.00 per sq ft in 2001 and retail currently maintaining rents of well over £500.00 per sq ft in prime locations. The West End comprises more than 40% of Central London’s total office stock with approximately 83m sq ft (7.7m sq m). Recent new development at the edges of the West End, in locations such as Paddington and North of Oxford Street, have extended the physical reach of the market and improved values in these areas. Lying between the City and the West End is the MMiiddttoowwnn market, which performs a similar function to the SSoouutthhbbaannkk market, south of the river. Whilst less high profile as business locations, these markets tend to attract occupiers during periods of rapid growth in the London economy, when other markets have less capacity and see sharp price increases that encourage cost-conscious companies to look elsewhere.

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5.London Retail Consortium

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Office rents tend to be lower than elsewhere, and the area has thus historically attracted back office functions associated with the financial services sector in the City. In recent years the profile of both areas has been changing as developers have undertaken large-scale modern redevelopments, attracting major tenants from a range of different sectors. The retail core of the Midtown market is in Covent Garden which is a focus for the marketing and media sector as well as being famous for its shops, street performers, and home of the Royal Opera House.

Manufacturing plays an important, though declining, role in Greater London’s economy, contributing around 11% of London’s GDP, with the concentration of this activity being around the former docklands in London’s East End and in the peripheral locations outside Central London. Whilst most manufacturing industries are under-represented in London its remaining strength is mostly in printing-related activities which account for a third of employment in the sector. However, UK manufacturing industry has been in decline for many years, experiencing a similar long-term decline to that of other world cities in favour of an increasingly service-based economy, particularly those businesses that value the agglomeration benefits of locating in London7. As such it is

the financial and business services sector which has increased rapidly in London over the past decade and now provides a third of all employment8.

The industrial sector is dominated by warehousing rather than production. The UK manufactures a relatively small proportion of the goods it consumes and instead imports them. Furthermore, the UK is consuming more than ever: both are trends which are likely to continue. As a consequence a small proportion of the take-up of “industrial” floorspace is for manufacturing purposes whilst the majority is for storage and distribution (i.e. logistics). Developers tend to concentrate on large units of warehousing space to meet the need for centralised distribution which continues to grow. However, in the South East and particularly in London, much of the stock of brownfield industrial land has been eroded; being let to higher value uses such as retail and residential. As a result of site shortages in Central London, industrial development activity tends to be focussed on the periphery, mainly to the east of London where land is available and communications have been improved. In the Greater London area there are four key areas of warehouse and industrial stock; Croydon to the south, Enfield to the north, and Heathrow and Park Royal to the west.

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7.GLA Economics - The London Labour Market

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London has a wide range of retail locations and there is a huge variety in the quality and scale of shopping destinations. In London’s West End alone there is some 6.9m sq ft of retail floorspace, a significant proportion of which is given over to quality department stores. Where possible, most retailers endeavour to trade in flagship stores in Central London as it offers a comprehensive range of merchandise in the best possible setting, with the average market position of retailers in London being higher than that of its rivals. There is over 1.5m sq ft of retail floorspace in the City, but it is more dispersed than the West End, offers a narrower range of goods and is more dependant on its immediate working population. The primary retail areas in London are: Bond Street, Oxford Street, Regent Street, Covent Garden, Kensington High Street, Kings Road, Knightsbridge, and Victoria.

London’s population has been growing steadily since 1989 and currently stands at 7.3 million, the majority of whom live outside the city centre in the suburbs that make up Greater London. The resident population had been in decline for most of the period from 1940, but has increased rapidly in recent years up 7% between 1991 and 2001 and 1% per annum thereafter. The government’s central scenario is

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FIGURE 4: MAP OF GREATER LONDON

Population and

Labour force

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for an increase of 800,000 people to 8.1 million by 2016 with the working population alone growing by 636,000. The demographic profile of London reflects a young population structure highlighted by its relatively young workforce, with the numbers of those aged under 65 increasing. The break down by borough for inner London population is detailed in table 1.

Most of London’s working population travel to the capital on a daily basis to work, principally from London’s “commuter belt”, the built-up area surrounding and running into Greater London, but not administered as a part of it. According to Oxford Economic

Forecasting (OEF), London provides around 750,000 jobs for

commuters from the rest of the UK. While there is a significant level of out-commuting from London to other regions, the daily net inflow into London, particularly of young people and graduates, has grown by around 25% over the past decade. This contributes to Greater London’s current total labour force of around 3.6 million.

Most of those commuting to work in London live in the commuter belt covering much of the South East and Eastern regions including the “home” counties of Kent, Surrey, Berkshire, Buckinghamshire, Hertfordshire and Essex. It is common for London’s workers, particularly those with families, to live outside London and commute into the capital during the working week. On average those in higher-income occupations commute further than those in lower-income occupations and those in specialised occupations commute further than those in non-specialised occupations.

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TABLE 1: INNER LONDON POPULATION BY BOROUGH

Borough Population

Camden 198,000

City of London 7,186

Hackney 202,817

Hammersmith & Fulham 165,243

Haringey 216,510

Islington 175,787

Kensington & Chelsea 158,922

Lambeth 266,170 Lewisham 248,924 Newham 243,737 Southwark 244,867 Tower Hamlets 196,121 Wandsworth 260,383 Westminster 181,279

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As an area which employs both a specialised and high-income earning workforce, the City of London illustrates well the level of daily inward commuting. The City of London has a resident population of only 7,000 but a daily working population of closer to 300,000. With average earnings in the capital at almost a third higher than the average for Great Britain, it is unsurprising that the number of daily commuters into the capital has been increasing. The origin of City of London workers is shown in table 2.

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Place of Residence Percentage

City of London 2% Inner London 31% London Outer/Suburbs 26% Essex 15% Kent 7% Surrey 6% Other 13%

TABLE 2: ORIGIN OF CITY OF LONDON COMMUTERS10

10.MORI/Corporation of London Survey 2003

11.GLA Economics - Labour market balances and employment in the wider South East (Feb 03)

According to MORI research, only 33% of City workers live in inner London, with a quarter of workers commuting from outer London suburbs. Net in-commuting to London is rising and whilst it fluctuates bi-annually, over the long-term the general trend for commuting into the City of London has been growing at an estimated rate of about 50,000 per decade1111. The Corporation of London estimates that

commuter journeys in London and South East will rise by up to 10% by 2016. If the propensity to commute continues at this rate there will need to be significant improvements in accessibility both into and within London in order to satisfy demand.

There are distinct areas of wealth in Central London, with the corridor to the West and South West of the capital being home to the most affluent section of the population and commanding the highest house prices. Traditionally the East-West divide of wealthier people living in the West and poorer to the East came about due to the UK’s prevailing winds. With much industry located to the East of the London, being “down-wind” of the industrial fumes was undesirable. The West therefore became established as an expensive place to live, a characteristic still evident in the structure of London’s house prices today.

Boroughs that lie south of the river such as Wandsworth, Lambeth, Southwark and Lewisham tend to be home to young graduate workers who have moved to London for work, or young couples and families choosing to live close to Central London employment. Lewisham has good transport links to Canary Wharf and is the base for many Docklands workers.

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While many people may start their careers in London, a significant proportion move to other parts of the UK later in their careers, particularly as they get older and their families grow. It is common for them to move outside inner London into the Greater London suburban area or farther out to the “home counties” and either commute into Central London or transfer their skills into the wider London region. Using house prices as an indicator, Surrey which lies to the South West of Central London commands the highest house prices, with

Buckinghamshire and Hertfordshire homes also achieving prices well above the UK average. All have journey times into Central London of around one hour.

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TABLE 3: INNER LONDON HOUSE PRICES 12

Borough Average Price (£)

Camden £484,772

City of London £329,539

Hackney £259,062

Hammersmith & Fulham £438,368

Haringey £296,840

Islington £345,723

Kensington & Chelsea £827,180

Lambeth £274,918 Lewisham £208,050 Newham £199,408 Southwark £282,095 Tower Hamlets £262,096 Wandsworth £368,853 Westminster £556,540

12.Sources: Land Registry of England and Wales

County Average Price (£)

Buckinghamshire £297,335

Essex £215,239

Hertfordshire £262,970

Kent £213,222

Surrey £325,798

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The main themes highlighted in this chapter suggest long-term growth in demand for transport services in and around London. These are: rising population and service sector employment, continuing

preference for suburban or “commuter belt” residence, and growth in net in-commuting to Central London from a broad range of locations. The next section describes key elements of the policy framework for office development, and the current distribution of development activity around Central London.

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There are a number of separate bodies that have a role in planning and development in London, but the most significant are the Greater London Authority (GLA) and the individual boroughs. The boroughs are required to prepare development plans and to determine planning applications. The individual borough plans, and indeed decisions on individual planning applications, must conform with the London Plan produced by the GLA. The London Plan sets the strategic framework for planning and development in London over the period to 2016. Its key aims are to accommodate forecast growth within London’s boundaries and to direct large-scale high-density development towards previously-developed “brownfield” sites that are highly accessible by public transport. It estimates employment growth sufficient to generate demand for around 85 million sq ft of office space in London over the plan period. The plan identifies the eastern segment of London as the main priority area for future development. However much of this area suffers from poor transport provision, so investment in transport infrastructure is crucial to fulfilling this goal. The desire to re-use existing sites for high-density development has also refocused attention on allowing high-quality tower buildings within the Central London core.

Construction activity within London has recently passed a cyclical low point and is now showing clear signs of increasing. The distribution of construction activity reflects the fact that it is easier to undertake large-scale development in the City than in the West End. The geographical pattern of proposed large-scale development in London shows a focus on areas on the fringes of the established commercial core, with particular emphasis on the areas around railway termini and

extensions to existing strategic fringe development areas. To an extent this is consistent with London plan goals, although development pressure in the more peripheral parts of the Thames Gateway remains more limited and is critically reliant on accessibility improvements.

Since 2000 the Greater London region has been administered by the Greater London Authority (GLA). It covers the 610 sq miles (1580 sq km) of Greater London, covering the 32 London boroughs and the City of London. The authority consists of an elected Mayor and a 25-member Assembly. The GLA was created to improve the

coordination of the various London boroughs and the Mayor, currently Ken Livingstone, is the individual who represents it. The Mayor’s powers (as defined by the 1999 Greater London Authority Act) are limited. His only tax raising powers are congestion charging and rule on residents’ council tax bills. He has a statutory duty to produce a number of strategies including transport and economic development and his actions are scrutinised by the 25-member Assembly known collectively as The London Assembly.

Planning and

Development

Administration

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This is elected via proportional representation, made up of 14 constituencies (shown in figure 6; Labour in red & Conservative in blue) and a further 11 members elected from a party list and has the power to vote to approve and/or amend the Mayor’s budget. The Assembly is also able to investigate issues raised by Londoners or considered important to them and make proposals to the Mayor.

Of the Mayor’s responsibilities his key role is for producing a new planning strategy for London. The name given to this spatial development strategy is The London Plan which brings together all strategies in a spatial and land use context with the intention of creating a cohesive vision and overarching policy framework for London to 2016. Published in February 2004, the London Plan is the first blue-print for development in London since the abolition of the former Greater London Council in 1986. It sets the Mayor’s vision for 2016 and has proved invaluable in guiding developers and others on the future direction for the capital. It has also been instrumental in promoting development providing it is of high quality, sustainable and of benefit to the local community.

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FIGURE 5: LONDON’S PLANNING AND DEVELOPMENT AUTHORITIES STRUCTURE

FIGURE 6: LONDON ASSEMBLY CONSTITUENCIES

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The Mayor has a duty to ensure the Plan complements the plans for adjoining regions and is consulted on strategic applications (broadly categorised as such according to size). The Mayor has two planning roles; he has the power to direct refusal on strategic applications and he produces the London Plan. The London Plan has development plan status which means that boroughs must take account of its policies in their plans and planning decisions. If the Mayor considers that the application does not accord with his policies he can direct the borough to refuse the application. It is expected that the government will soon review the 1999 Greater London Authority Act. This is expected to result in an increase in the Mayor’s powers including those relating to planning, with the possibility of the Mayor being able to grant planning consent.

The London Plan splits London into five sub-regions: central, north, south, east and west.

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FIGURE 7: LONDON PLAN SUB-REGIONS

LUTON STANSTED HEATHROW GATWICK THAMES GATEWAY CITY NORTH WEST CENTRAL EAST SOUTH

Priorities are set for each sub-region and work is being undertaken now on Sub-Regional Development Frameworks which will provide advice on implementing the Plan’s policies. The eastern sub-region is the priority area for accommodating future growth and development. This reflects the current agglomeration of business and world-city functions in the City and Canary Wharf and the availability of land, especially in the Thames Gateway area to accommodate significant economic and population growth. This focus on the east marks a fundamental change after 400 years of westward development. Policies promote sustainable development, in particular in Opportunity Areas (areas considered capable of development accommodating at least 5,000 jobs or 2,500 homes or a combination of the two). There

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are 28 Opportunity Areas. In addition there are fourteen Areas for Intensification, identified as having significant potential for housing and economic development.

Unlike previous plans it is a spatial plan, addressing more than purely land-use matters, and it links transport with economic and planning policy. Policies link accessibility with density, whereby development density is expected to be maximised: the higher the accessibility, the higher the expected density. The London Plan seeks to accommodate forecast population and economic growth within London’s boundaries, without encroaching on the Green Belt or London’s own open

spaces, through high density, mixed-use development, on previously developed sites that benefit from good transport accessibility. A key element of the London Plan is that employment growth is forecast to require an additional 85 million sq ft of office floorspace. Central and East London will accommodate 80% of this expansion with the majority (50%) being focussed in East London. Research undertaken to estimate retail floorspace requirements as a result of the forecast growth in consumer expenditure, estimates that after major new planned centres are built at Croydon, White City and Stratford and further extensions made to Brent Cross, there could still be demand for an additional 1.5 million sq m of retail floorspace, about half of which would be in the central sub-region.

The London Plan is to undergo minor amendments in 2006, principally to update waste policies and increase the amount of new housing each borough is expected to accommodate, and will be reviewed in 2007.

As well as having responsibility for co-ordinating London’s overall development strategy, the GLA also has responsibility for other governmental bodies including Transport for London (TfL) and the London Development Agency (LDA) and has some powers over members of the Metropolitan Police Authority (MPA) which oversees the Metropolitan Police Service and as well as other emergency services units.

T

Trraannssppoorrtt ffoorr LLoonnddoonn ((TTFFLL)) is responsible for transport strategy and operation within London. In addition to setting the long-term strategy, TFL is responsible for the buses and London Underground. It is chaired by the Mayor and the chief executive is former New York transport commissioner Bob Kiley. TFL has been successful in gaining extra funding for transport in London, as well as funding for individual projects such as the proposed Thames Gateway Bridge. TFL has secured powers to borrow to fund additional investment.

T

Thhee LLoonnddoonn DDeevveellooppmmeenntt AAggeennccyy ((LLDDAA)) is the economic regeneration arm of the GLA and is a Regional Development Agency. The LDA’s work is focussed on four themes: regenerating London, supporting people, encouraging business, and marketing and promoting London.

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As well as producing the Mayor’s Economic Development Strategy, the LDA is a major landowner in its own right (predominantly in east London) and enters into joint ventures to facilitate development. The LDA will shortly become a Statutory Consultee on residential developments larger than 150 units.

An Urban Development Corporation (UDC) has been established to accelerate and facilitate development in the Thames Gateway (this complements the UDC set up outside London in the Thames Gateway in Thurrock). The area covered is Barking as well as the Lower Lea Valley. However in light of London winning the bid to host the 2012 Olympics it will not be responsible for delivering these facilities. The UDC will not be fully functional until the bid is determined. Its powers will primarily be masterplanning and development control on major applications for which it will be the planning authority. How these are defined is yet to be determined. The UDC will have a ten-year life span with a review after five years.

The borough administrations are directly elected in local elections and act as the planning authority responsible for delivering a range of services to residents. The boroughs have two planning powers: preparing a development plan setting out priorities and policies and determining planning applications. Although the Mayor can direct boroughs to refuse planning permission on strategic developments, only the boroughs can grant consent. On strategic schemes the borough will consult the Mayor. The Secretary of State retains the right to call in applications for his consideration. As a result of the 2004 Planning and Compulsory Purchase Act boroughs are updating all their plans and producing “Local Development Frameworks” which will include a suite of development documents to be reviewed and updated every three years. Boroughs are also required to produce a Statement of Community Involvement setting out how they will consult stakeholders and what is expected of applicants.

Borough development plans are required to be in general conformity with the Mayor’s London Plan. Before a borough is able to adopt a plan it must consult the Mayor who will confirm whether he considers it to be in general conformity, and if not will suggest changes to be made. The basis of the Mayor’s decisions is whether it is considered that policy differences will harm implementation of the London Plan.

In addition to the appointment of the Mayor who has set overarching planning policy and objectives, the Government has undertaken a major programme of planning reform, reviewing planning guidance and legislation. The 2004 Planning and Compulsory Purchase Act sets the foundations for the new system. The underlying principle is of promoting sustainable development, that is mixed use, high density

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Thames Gateway UDC

London’s Boroughs

Planning and

Development

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development on previously developed sites that are accessible by a range of transport modes including public transport. This approach, and that of seeking to take account of economic, social and environmental concerns, permeates all levels of planning policy. As well as the Mayor’s focus on developing in east London the Government has made the Thames Gateway a priority area for development and regeneration.

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FIGURE 8: THAMES GATEWAY AREA

This is reflected in Government guidance including, the Sustainable Communities Plan (February 2003). As well as identifying suitable areas for major development, the Government has committed to infrastructure investment to support this. Most critically, transport investment and improved accessibility will be critical to bucking the centuries’ old trend of developing to the west of London and making use of a large supply of previously developed sites. Half of all projected office development is in east London which also includes thirteen of the twenty-eight Opportunity Areas which are identified for significant development.

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As a result of the Government’s and the Mayor’s agendas there is a generally more positive approach to planning and development. This in part reflects the Chancellor and Treasury’s concerns that the planning system is holding back economic growth. This does not just relate to commercial development but also the failure to develop sufficient housing and consequent affordability issues. Economist Kate Barker was charged by the Treasury to recommend ways to increase housing supply. Her recommendations such as freeing up surplus employment land for mixed use and residential development are now being widely implemented.

In order to reduce the need to travel and make beneficial use of brownfield sites, there is considerable emphasis on focusing development at transport nodes. For example, major mixed-use developments are currently being brought forward at King’s Cross and Stratford. The Mayor and Government are also encouraging developers to look at opportunities in town centres and near stations. The emphasis on public transport accessibility and mixed-use means that traditional business parks will no longer be considered so appropriate in planning terms. More appropriate will be mid-urban parks such as Chiswick Park to the west of London. Similarly, major out-of-town retail parks will generally no longer be permitted, with a strong focus on new development being located in town centre locations.

The emphasis on increasing development density to make best use of existing sites well-served by public transport has led to increased development of tall buildings (although not tall by international standards). This has required a change of approach in planning and has led to two major Public Inquiries (the Heron Tower and London Bridge Tower on the Southbank), both of which were successful. The result has been recognition that new buildings of outstanding architectural standards can add to London’s skyline and built

environment. This is helped by the popularity of the Swiss Re Tower in the City which is an important addition to London. A number of proposals are being brought forward in the City and surrounding areas. Residential towers are also being looked at, exemplified by a recent proposal at Vauxhall which received consent after a Public Inquiry.

Development activity in Central London is highly cyclical and subject to a range of influences: planning, financial, regulatory and transport-related. Over the past twenty years there have been two periods of very strong development activity: 1989-92 and 2002-04. The first of these was followed by very low levels of development activity spanning the mid 1990s, and a period of similarly weak construction ended after 2004.

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Patterns of

Development Activity

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There are major variations among the different parts of the

Central London market in terms of ease of delivering new buildings. These differences, and the responses of developers to them, are central to understanding the ways in which development patterns have re-shaped London’s commercial office stock. Much of the West End, and particularly its central core around Mayfair and St James, is characterised by historic buildings, small units and a conservation philosophy in planning policy. As a result large-scale development activity has tended to be confined to the edges of the West End. For instance, the Victoria market saw significant large-scale

development activity in the 1970s and 1980s facilitated by demand from energy companies and government. More recently the area north of Oxford Street and particularly along the Euston Road, have seen the development of a number of large buildings. Current construction activity, and the bulk of proposed major development in the West End, is concentrated in the Victoria and Paddington areas, reflecting the difficulty of assembling large development sites in the West End core. In the City area, large-scale development is facilitated by an

increasingly relaxed planning regime and refurbishment opportunities offered by the existence of big buildings with large floorplates. The last major physical re-shaping of the City market occurred in the wake of the deregulation of financial services (“big bang”) in the late 1980s which caused rapid growth in financial sector employment and boosted demand for large trading floors. The development response is exemplified by British Land’s Broadgate scheme above Liverpool Street station which provided large buildings of a quality and specification not available in the core, and expanded the physical limits of the City market eastwards.

The Canary Wharf estate on the Isle of Dogs, although initiated earlier, performed a similar role on a much larger scale in providing large state-of–the-art buildings in the context of a very relaxed

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0 2 4 6 8 10 12 14 16 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 millio n s q f t Proposed Available

Under Construction Speculative Under Construction Pre-committed Completed

FIGURE 9: CENTRAL LONDON DEVELOPMENT COMPLETIONS, 1985-2009

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planning regime and accelerated delivery times. Initially the

development suffered through inadequate transport provision and, in its early phases, had to offer sizeable rental discounts in order to attract tenants. It has now matured into a viable commercial location where headline rents are close to parity with those in the City. It remains the only example in London of the emergence of an entirely new major commercial district (as opposed to major extensions of existing ones) and has succeeded in part because of recent improvements in the provision of transport infrastructure.

Elsewhere, the recent developments at More London south of the City have increased the provision of large high-quality buildings in an area previously characterised by poor quality urban environment and perceptions of distance from existing commercial hubs. These developments are regarded in some quarters as a southward extension of the City and are not comparable with Canary Wharf in terms of either scale or origin. That is they are closer to established commercial locations and benefit from proximity to London Bridge station and underground links.

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The level of development activity across Central London has generally been diminishing over the last three years, reflecting the weakness of tenant demand and falling rents that have characterised most of this period. In recent months, however, strengthening tenant demand has caused significant growth in construction levels. There is now around 10m sq ft of office space under construction in the Central London area. This compares with nearly 16m sq ft in mid-2001, so develop-ment activity is still some way below previous peaks, but showing clear signs of increasing.

The relative ease of developing in the City compared with the West End is reflected in differences in the size of the development pipeline. As shown in figure below, construction activity in the City (4.3m sq ft) is more than twice that in the West End (1.6m sq ft), with the Midtown and Southbank markets accounting for similar totals. Excluding buildings already under construction (that is focussing on schemes that are proposed or consented), we expect the City market to see

completion of a further 3.8m sq ft over the period 2007-09 compared with 1.5m sq ft in the West End, 0.3m sq ft in Midtown, 0.5m sq ft in Southbank and 0.3m sq ft in the Docklands.

Looking further ahead, it is instructive to look at the characteristics of potential developments that are of sufficient size to influence the shape of the London market. Looking at the distribution of potential major new developments certain key features are evident. The majority of these schemes come into one or more of the following categories:

Close to, or integral with, mainline railway termini (e.g., London Bridge, Kings Cross, Waterloo)

Further phases or additions to existing strategic development areas (mainly Paddington and Canary Wharf vicinity)

Eastern and northern City fringes (e.g., Aldgate Union, Bishopsgate Goods Yard)

High density developments in the City core, mostly tower developments or wholesale redevelopments of strategic City core sites

Figure 12 below shows the details of major commercial development nodes in and around Central London, where there are identifiable clusters of development schemes that may come forward over the next ten years.

Other than the last of these categories, most of these major groups of schemes are in highly-accessible locations that are on the fringes of existing market cores. Thus, while we do not expect the emergence of another entirely new commercial district the future pattern of development could well see a physical extension of the Central

London market, as well as the appearance of new forms of development in existing core areas. The role of transport infrastructure

developments will be pivotal in driving this.

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The Current

Development Cycle

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m

FIGURE 11: DISTRIBUTION OF CONSTRUCTION ACTIVITY, Q2 2006

FIGURE 12: KEY STRATEGIC DEVELOPMENT LOCATIONS IN LONDON

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London is served by an extensive multi-modal transport system that supports a total of 26 million journeys each day. Car and under-ground usage are generally declining, while bus and rail travel are rising. The busiest rail terminals are those that interconnect most easily with other transport modes (including Victoria and Kings Cross) while the greatest reliance on business commuter traffic is at

Fenchurch Street and Cannon Street on the eastern side of London. London’s major airports are served directly by dedicated rail links into Central London and are expected to see significant growth in air passenger capacity. In general, demand for travel into and within London is expected to continue rising, placing further pressure on the existing transport capacity.

London is served by an extensive public transport network which combined with private transport routes carries more than 1 million people into Central London during the morning peak (07.00 to 10.00 hours). This network includes five international airports, 14,000 km of roads and the oldest metropolitan underground network in the world. The combination of these complex networks facilitates the flow of people through the capital and contributes to the 26 million journeys made in the city each day13. London’s public transport is arranged into

six zones with Central London being in zone 1 and zone numbers rising as you journey away from the centre. The majority of journeys made within London are made by public transport as, by virtue of its size and the introduction of a congestion charge, it is often quicker and cheaper than travelling by car. Foot passengers and cyclist numbers in particular have been on the increase in recent years as popular modes of travelling around London.

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TABLE 5: MODAL TRENDS IN TRIPS WITHIN LONDON

13.London Travel Report 2004: figure based on an average weekday in Autumn 2003

Year Rail Underground/DLR Bus Taxi

2000 1.7 2.0 2.5 0.2

2001 1.7 2.0 2.0 0.2

2002 1.7 1.9 2.9 0.2

2003 1.8 1.9 3.2 0.2

2004 1.7 2.0 3.4 0.2

Year Car Motorcycle Bicycle Walk

2000 10.6 0.2 0.3 5.4 2001 10.6 0.2 0.3 5.5 2002 10.7 0.2 0.3 5.6 2003 10.7 0.2 0.3 5.6 2004 10.6 0.2 0.4 5.6

Daily average number of trips by Public transport (millions)

Daily average number of trips by Private transport (millions)

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Since 2002, the number of people travelling on the underground and using cars has fallen, while travel by bus and overland rail has increased. Greater London’s national railways carry an estimated 1.4m passengers to and from the capital every day making London the hub of the UK’s rail network. Rail services in the UK are run by a set of private train operating companies and the nine London mainline stations are operated by Network Rail which is regulated by the Office of Rail Regulation. Through this management structure they run services from the 570 local railway stations which serve the capital. Over 70% of all mainline rail journeys in the UK start or finish in London14with Liverpool Street station accommodating the highest

proportion of annual visits – passenger and non-passenger – at approximately 120 million, whilst Cannon Street station supports the largest proportion of business commuter passengers (75% of its total throughput). Generally, the busiest rail terminals in Central London are primarily those which act as a hub of interconnectivity between transport modes, either for Underground or the Docklands Light Railway (DLR) interchange (Waterloo and King Cross) and/or for major bus routes (Victoria and Euston).

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FIGURE 13: LONDON’S OVERLAND RAIL AND UNDERGROUND TUBE NETWORK

14.Association of Train Operating Companies

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Of the estimated 454,000 people who enter London via rail during the morning peak (0700-1000), 42% use a London Underground transfer to complete or continue their journeys. This number increases somewhat when looking at the underground alone however, with almost 340,000 people using only London Underground and DLR services to complete their journeys in London. This illustrates the importance of the underground infrastructure to transport flows through the capital.

The spatial distribution of underground journeys does differ from other modes of transport however. 82% of all journeys made by

Underground start or end in fare zone 1 and over a third are wholly made within fare zone 1. This is in contrast to the distribution of bus journeys, which are spread more evenly across zones and rail journeys which tend to be used for longer distance journeys. Any upgrades to the tube that can be made within zone 1 to alleviate the acute capacity problems will therefore have a significant impact on travel times within this zone.

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FIGURE 14: ANNUAL AND MORNING PEAK IN-FLOWS OF PASSENGERS

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As well as those hubs of transport which have direct connections to the underground system, those mainline network railway stations which can offer direct access to London’s airports, are of increasing

importance since they expand London’s accessibility to the international community. There are three such hubs in Central London all offering fast, efficient direct rail route services to Greater London airports:

Completed in 1998, the Heathrow Express route runs direct from Paddington mainline station and offers a 15 minute non-stop journey to the UK’s largest airport.

The Gatwick Express operates directly from Victoria station offering a journey time of around 30 minutes to London Gatwick.

Trains bound for Stansted airport depart every 15 minutes from Liverpool Street station in the City of London.

London’s airports handle more than 114 million passengers a year15

(2001), which is almost three times as many as in 1981, and several London airports are continuing to expand their air passenger capacity as well as their potential rail and underground links. This is

exemplified by London City Airport which under new plans will be incorporated into the Docklands Light Railway (DLR) route. Linked into London Underground system at Bank station and Tower Gateway, the DLR, which opened in 1987, was originally intended as a small-scale railway to serve the modest developments expected at that time in the Docklands area. The Canary Wharf development, however, greatly increased its importance. Initially serving just 15 stations, the DLR has been extended three times and now carries around 45 million passengers every year. It is a key link between East London and the rest of the city.

The modal share structure of travel within London, as with many large cities, is time dependant. 43% of average day travel in London is by private car or motorcycle but the majority of this occurs in the inter-peak and evening periods, when the share of public transport use is correspondingly lower. Public transport share is greatest during the morning and evening peaks while at night the share of other modes including taxis and minicabs increases. Whilst famous for its “black cabs” the proportion of taxi share on the roads is less than 1% and car and motorcycle travel whilst falling, still far outweighs all other modes of transport.

However, measures introduced by London’s Mayor to discourage car use in the Capital, such as the congestion charge, have seen a reduction in car usage across London. As a consequence, the level of bus usage has been increasing, as has the number of buses and coaches operating in London. The rate of growth in bus journey numbers has been faster than for other modes of transport in recent years and in the first quarter of 2005 reached 7%. In each period16

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15.www.statistics.gov.uk/cci

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bus travel now accounts for 126 million passenger journeys, almost double that accounted for by tube. Increasing charges for car use in Central London and the proposed extension to the congestion charge zone are likely to see this shift to bus and train routes grow.

Demands on both private and public transport in London have risen unabated for the last ten years or so, a trend which looks set to continue. Sharp increases in public transport use from 1983 onwards with the introduction of travelcards, zonal fares, improved services and better economic conditions, have swollen daily commuter numbers. However a lack of financial commitment and structured planning policy has meant that public transport in particular has not kept pace with the increasing demands made on it. Improvements to London’s transport infrastructure are, therefore, high on the agenda of London-based businesses and their employees.

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London’s key issues in this area centre on the capacity, and reliability, of the public transport network, and on traffic congestion levels. The adequacy of the public transport system regularly features in surveys as a major source of dissatisfaction among London businesses and households, and the average commute into Central London is nearly an hour. Improvement to the capacity of the transport network, and the reliability and punctuality of the existing network, is therefore vital to sustaining London’s competitive position. The tube network has seen a 25% increase in usage since the early 1990s, which has put pressure on an ageing stock. Capacity bottlenecks are also evident on parts of the rail network in and around London.

Road congestion is also a key issue, with traffic speeds in Central London declining since the late 1990s. A congestion charge was introduced in the central area in 2002. There are proposals both to extend the area of charge and to increase its level. This appears to have reduced car traffic in Central London, but may have further heightened the pressure on public transport.

One of the key factors in identifying potential areas of commercial property development and increased occupier activity in the London area will be transport capacity. Issues to do with the adequacy of both road capacity and public transport are of concern to investors and corporate occupiers alike. This is mostly because of the heavy reliance of London’s labour force on the public transport network.

The adequacy of the public transport system is a highly prominent issue in London and routinely features as a major negative in surveys of households and businesses. A recent CBI/KPMG survey17

identified transport as the major drawback to doing business in London with over 75% of respondents rating the quality and reliability of public transport in London as no better than “patchy”, and highlighting a need to prioritise and manage transport projects more effectively. MORI18, the opinion research company, found that in

2003, businesses and senior City-based executives expressed rising concerns about poor public transport and about traffic flow. The City Corporation estimates that transport delays already cost City-type firms approximately £230m per year and with total employment estimated to rise by over 1m between 1999-2025 (CEBR19), there is a real threat

that without significant improvements to its transport network, London’s advantages as a world city for business and finance will be eroded. With demand for transport of all types expected to continue to rise in line with population and employment, the issue of suitable transport provision capable of supporting demand is a serious one. The condition of the tube and rail network has continued to decline and although there are capacity increases planned - on the tube, the national railway network and at airports - the apparatus to finance and manage these large scale projects is not yet fully in place20.

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17.London Business Survey, April 2005

18.Corporation of London Survey 2003 undertaken by MORI

19.Centre for Economics and Business Research

20.London’s Place in the UK Economy, September 2002

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The average length of journeys to work in Central London is 56 minutes compared with an outer London average travel time of just 32. On some routes into London the average road speed is just 2.9 km per hour; slower than a horse and cart in Victorian London. Overall, road traffic in London increased by 7% in the decade between 1993 and 200321but almost all the growth was in the first

half of this period. Total traffic has seen a reduction in mean flows on major roads since 1999, but there has been an increase on minor roads in this period while road traffic speeds have been decreasing since the late 1990s.

The congestion charge, introduced in early 2002 whereby drivers are charged for bringing their car into the central area during peak travel hours, is an attempt to reduce private car usage in the central area.

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FIGURE 15: MAP OF CONGESTION CHARGING ZONE AND PROPOSED EXTENDED ZONE AREA

21.London Travel Report 2004 P

Prrooppoosseedd CCoonnggeessttiioonn CChhaarrggee bboouunnddaarryy eexxtteennssiioonn C

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This measure has met with a mixed-response, but the introduction of charging does seem to have eased road congestion. The initial charge for entering the congestion charge zone was £5 (c €7) but this has recently been increased to £8 (c €12) between the charging hours of 7am and 6.30pm Monday to Friday. There are proposals both to extend the area over which the charge applies - due to be implemented in February 2007 - as well as a recent proposal from the transport secretary to charge motorists by the mile for travelling on London’s most congested routes.

Whilst the effect on traffic and pollution in London was initially dramatic, the economic impact felt particularly by some local business within the congestion zone has also been marked. The congestion charge is having a particularly adverse impact on small businesses in all sectors, but most notably in the retail sector. Many retailers believe that a downturn in tourists and leisure shoppers as a result of the introduction of the congestion charge has been responsible for a downturn in trade. Transport for London argue that this downturn occurred as a result of coinciding with a general downturn in the market and that the dip in retail sales growth in early 2003 has now largely recovered22.

However other evidence suggests that many small businesses have seen a rapid reduction in trade and have been forced to relocate outside the congestion charge area. Those affected have mostly been smaller traditionally family-run businesses that rely on a steady level of local and passing trade. As both these have been affected by the congestion charge it is not hard to see why some business have reported as much as a 35% slump in sales. Research conducted by the RICS however implies that to date congestion charging has not had any significant effect on property prices. They have conducted an independent study which asserts that there has been no attributable shift in capital values.

The relative importance of public transport has risen as the number of private cars entering Central London has fallen. However, across London there is a difference in satisfaction across different types of public transport, with the priorities for improvement varying between residents and Central London workers as against those expressed by businesses and City executives. London Underground in particular has witnessed a decline in satisfaction among its users in recent years, with punctuality and reliability cited as key areas for improvement by almost 50% of those asked in the Corporation of London Survey of 2003. This is mostly due to the fact that tube usage has seen a 25% increase particularly since the early 1990s. London's underground system suffers from being the oldest in the world with smaller more unreliable carriages and signalling systems not designed to carry the volume of passengers it does today. One of many problems on the underground is the heat with temperatures of 38°C (100°F) on some lines in mid-summer.

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22.Based on London Retail Consortium data and TfL study of John Lewis

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In October 2004 the Mayor announced proposals for a £10 billion, five-year investment programme to give London a 21st century transport system. This includes plans for new air-cooled tube trains and the renewal and upgrading of tube signalling and communications systems. Extensions to many lines including the East London and Metropolitan Lines are also planned.

Buses provide another area of concern and whilst lower priority than the issues with the tube and rail, an increase in bus passenger volumes of 30% over the past ten years has raised concerns over reliability and punctuality. In response to this Transport for London has begun to introduce a greater number of bus services and zoned off additional areas for bus lanes. The introduction of congestion charging has increased bus speeds in the zone area which are reported to be 15% faster23 while more effective enforcement of bus

lanes and the introduction of pay before you board has also helped make journeys in Central London faster.

The current rail network is almost at full capacity for commuter traffic entering and moving around London. With delays and cancellations commonplace and service quality under increasing pressure from rising passenger numbers, it is something that needs to be addressed urgently. The next section highlights major infrastructure proposal planned for the London area over the next 5-10 years, and discusses their possible impacts.

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There are numerous new transport schemes planned for the London area over the next 10-15 years, some of which have the scope to introduce fundamental shifts in the pattern of accessibility around London. Crossrail is the single most important and carries a good deal of political support, although funding uncertainties remain. Thameslink 2000 appears the most vulnerable in funding terms. There are likely to be a number of local and suburban impacts. However the main benefits in areas that could accommodate large-scale office development are likely to accrue in key nodes on the fringes of Central London including King’s Cross, Paddington, Isle of Dogs, the City Fringe, Farringdon and London Bridge. In this respect the pattern of infrastructure benefits on the one hand and planning and spatial policy goals on the other are self-reinforcing.

There is a large number of proposed transport infrastructure schemes in London and the Greater London area which will ensure that the urban geography of London will undergo significant changes over the medium to long term. Greater access to labour via reduced commuting times, combined with a policy agenda skewed towards sustainable, mixed-use working environments provides the opportunity

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FIGURE 16: PLANNED TRANSPORT INFRASTRUCTURE FOR GREATER LONDON AREA

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for previously unconsidered or under-developed fringe locations, and more central sites in need of regeneration, to become significant employment centres and future growth areas.

New termini and intermediate stops outside the central core represent opportunities to open up peripheral areas for additional employment use. While some of these are local in nature, there are others that are of sufficient reach and importance significantly to alter accessibility patterns and hence the desirability of occupation and development at particular locations.

The second phase of the CTRL will link Kent Thameside with St Pancras and is due to open in 2007. It will facilitate international travel to and from Central London, particularly to Paris and Brussels. The new line passes through the Thames Gateway and will enhance the economic viability of a number of designated “brownfield” regeneration sites, such as Stratford. The scheme will greatly expand the labour catchments of such locations, making them more attractive to corporate occupiers. The scheme will also act as a catalyst for development in the Kings Cross area and, subsequently, on adjacent sites along Euston Road. The area around Ebbsfleet (not currently an established office location) will also benefit by being brought within 15 minutes travel time of Central London.

Thameslink 2000 is a strategic rail infrastructure project intended to enhance the busy, existing Thameslink network throughout London and the South East of England. It will allow for an increase in the frequency of the cross-London rail link between St Pancras and Blackfriars from 8 to 24 trains per hour at peak times. It will allow for longer trains and a frequent, high-quality service across Central London and deliver a substantial increase in peak-time passenger capacity. If the Government gives the go-ahead on Network Rail’s proposal, it will expand the network throughout the South East from 50 to 169 stations. There is widespread in-principle support for the scheme, but clearly the original completion date of 2006 will not be met. In fact delivery before 2010 is considered unlikely.

The main areas e

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