Should London rise to meet Manhattan?

Copyright: David Lawson - Property Week Nov 1997

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The demise of the Millennium Tower, planned to soar 90 storeys over the City, is unlikely to defuse the row over whether London needs its own  mini-Manhattan.  A heavyweight panel of government advisers has stated that  tower buildings are needed  for London to remain a world city. This directly contradicts views by English Heritage chairman Sir Jocelyn Stevens who set his face against the Millennium Tower and forced a scaling down of City Point, the skyscraper proposed by Wates.

  The smouldering embers of this row will glow more brightly  when City planners consider the revised Wates scheme on December 9. But the real flames will emerge early next year when two major investigations into tall buildings emerge.  Even before Trafalgar House abandoned the Millennium Tower by agreeing to sell  the Baltic Exchange site to  Swiss Re, planners and property professionals were considering whether the skyscraper ban should be eased and where new buildings should go.

  The London Planning Advisory Committee  is setting up 'technical work, brainstorms and consultations' to formulate  new guidelines on tall buildings for the government and local authorities by next summer. The British Council of Offices is also beginning its own  study.  But a powerful group of advisors to LPAC and the Government Office for London which includes owners, occupiers, agents, planners and funds has already set out its stall. The principle for tower buildings in the City has already been established, says the London Office Review Panel (LORP) in its annual  report, quietly produced last month.

 'This policy should be sustained and reinforced in relation to national and international demand and a careful design study as to the location of further towers to enhance the skyline of the City of London and reinforce its international identity,' it says.  Nor will the prospect of towering buildings be confined to the City. It says other areas should be considered where 'clusters of towers might be appropriate'.

  But  arguments for and against towers will be  distorted by  squabbles about supply and demand. English Heritage and other opponents say building sites meet potential requirements, so there is no  need to build upwards. In fact, LPAC's own annual study commissioned from London Property Research, said last week that there is sufficient office development land to meet 'any foreseeable scale of demand.'  Even the highest growth scenario, drawn from figures by  Lombard Street Research,  could be accommodated in the City and its fringes 'without a single occupier going to Docklands or a single new site coming into the development pipeline until [the year] 2005.'

  But  the argument is not simply one of supply and demand, according to Michael Soames, chairman of the British Council of Offices and a leading City agent. 'It is about where occupiers want to go,' he says.  'Many want to be in the centre. The City cannot spread because of surrounding conservation areas and the restriction on views of St  Paul's. But firms often do not want to leapfrog out to areas like Paddington. The only option is to go up'

 Some development enthusiasts suggest  international occupiers will flee London unless it can offer the kind of towers common in New York, Singapore and Tokyo. 'Nonsense,' snorts Alan Winter. 'Name me a  company which has done that.' The reaction is surprising, considering that Winter is property director for Trafalgar House and a prime mover behind the  Millennium Tower.  But he remains convinced that London should allow more towers to provide the modern space it will inevitably need in the next century. 'It is about giving occupiers what they prefer,' he says. 'For instance, we found that occupancy rates in towers were much higher than the rest of the market.'

 Tenants will also pay more, says Rodney Clutton, the Wates City joint chief executive battling to create City Point. An earlier manifestation,  City Tower, a 21-storey block renovated for multi-letting 10 years ago, hit a record 796pounds/sq m (74pounds/sq ft) in the boom. It still leads the field along with towers like the NatWest building and 99 Bishopsgate.

  Clutton and Winter back  LORP, pointing out that towers such as Centre Point, the Natwest building, Canary Wharf - even the blocks in Croydon - have set the principle that high-rise is acceptable. But both accept that new development should be carefully planned in clusters rather than dotted around London.

  'These new studies looking at where towers could be built are long overdue,' says Winter.  In fact, planners have been trying to identify areas where  towers might be suitable for almost 10 years, according to Robin Clement of LPAC. The government backed down in the Eighties because this was seen as a development restriction on areas left off the map. Proposals re-emerged twice earlier this decade before the current study was approved. But the new  guidelines, which will stretch across  the whole of London, do not presuppose more towers will be built. LPAC is contemplating possibilities ranging from retaining existing restrictions to identifying locations for new towers.

 One crucial task will be to clear up a misunderstanding that has  lumped demand for giant financial factories with calls for taller buildings. 'Jumbo' requirements from international financial groups such as Goldman Sachs and Merrill Lynch dominate the market, according to the London Property Research report to LPAC. But LORP was quick to point out that towers are not attractive to elephants.  'A key element of demand for major office towers seems likely to come from those small to medium sized companies which seek a distinct and distinguished address and public image,' it says.

  This 'seedcorn' for future growth looks for floors no bigger than 1,900 sq m (20,000 sq ft) compared with the big plates demanded by financial groups of 4,200 sq m (45,000 sq ft) and above. 'Current experience suggest that London may need tall towers and big buildings but it does not require more fat tall buildings,' says LORP.

  Winter says the Millennium Tower would have fitted that pattern while Soames points out that rising rents will make smaller floor plates more economic for developers. So English Heritage can at least rest easy  that if it loses the battle for the  skyline, at least it will not have to endure the thought of Canary Wharf towers marching across London.

High buildings policy have been reviewed four times since the war, says LPAC. The current investigation by Building Design Partnership, London Property Research, the London Research Centre and Ziona Strelitz Associates is also being backed by a consortium including the the Cities of London and Westminster, Government Office for London, Royal Fine Arts Commission and boroughs such as Camden and Croydon.

 Contact: LPAC - 0171 222 2244

High-rise housing gave tower blocks a bad name back in the system-built era of the Sixties. But residents now fight tooth and nail to live in well designed towers, according to David Goldstone, chairman of Regalian.

  'Tall apartment blocks are common in other world cities like New York, showing that buyers enjoy living in the sky,' he says. Regalian  has achieved up to 2,500 pounds extra per floor for towers ranging from the renovated Falcon Towers council blocks at Clapham Junction to the luxury flats in Peninsula Heights on the  South Bank.

  But a forest of  residential towers are unlikely to spring up even if the tide of opinion changes. 'It would not be feasible outside prime areas,' he says. That rules out an area like Clapham Junction, although Regalian was happy to plan  high-rise flats at Heron Quays, next to Canary Wharf,