A new study from the Westminster Property Association (“WPA”) and Arup has found that a more ‘balanced and flexible’ approach to planning could address a sharp decline in major development projects in the West End and deliver an additional 14m sq ft of commercial space and create 87,000 new jobs over the next twenty years.
The research, Delivering Good Growth in Westminster, is published amid concerns that a sustained decrease in development activity will threaten the West End’s position as a key business district and impact tax revenues that fund services in the area and across the UK.
According to the WPA, Westminster’s Central Activity Zone (CAZ), which contributes 14% of London’s economic output (GVA) and 13% of jobs, has experienced a 3.7m sq ft loss of office floorspace since 2019, despite the opening of the Elizabeth line and continued demand for modern workspace. [Meanwhile, neighbouring boroughs Camden and Southwark have seen a 9% increase in office floorspace]. In addition, Westminster has seen an 81% decrease in major planning applications since 2016.
The study, which is the first of its kind in Westminster, examines how different approaches to planning policy, sustainability and conservation could impact development and economic output to 2045.
Under a best-case ‘balanced growth’ scenario, whereby planning policy encourages both retrofit and sustainable redevelopment, the research shows that an additional 14m sq ft of commercial space could be delivered, including 7.7m sq ft of office space, 2.5m of retail space and 2.4m sq ft of hotel accommodation, alongside 9,300 homes. This would deliver £31m per year more in GVA, at an annual growth rate of 1.4%. The increased level of development would create an estimated 87,000 additional jobs and generate £850m in additional S106 and CIL payments to be invested in local infrastructure, public realm and affordable homes.
Under a ‘business as usual’ scenario, with no major change to planning policy, it is projected that 7.2m sq ft of commercial floorspace would be delivered – half the level anticipated under a ‘balanced growth’ scenario – and just £10.9m in additional GVA per year. The model shows that 7,300 homes would be delivered.
Meanwhile, in a ‘checks on growth’ scenario whereby policy is weighted more heavily towards conservation, Westminster could see a 6.3m sq ft decline in commercial floorspace over the next twenty years, including an additional loss of 8.3m sq ft of office space. This would see jobs decline by over 68,000, and GVA decline at an annual rate of 0.2%. However, under this scenario, the study finds that 7,900 additional homes would be delivered through increased conversion of vacant office space.
For the full analysis you can read the report here.
Marcus Geddes, Chair of Westminster Property Association (and Managing Director, Workplace at Landsec) said: “Westminster is a key economic engine of London and the UK. This study lays bare the huge impact planning policy can have on social and economic prosperity.
“As Arup’s analysis shows, a more balanced approach that weighs heritage, environmental and economic factors, has the potential to unlock significant benefits. Good growth has the capacity to provide much-needed funding for public sector services and infrastructure by creating sustainable workspaces that will attract leading employers.
“The worst-case scenario, in which policy is weighted more heavily towards conservation could see a catastrophic decline in employment space that would threaten the West End’s status as a leading global business district.”
Further Reading:
Report: Delivering Good Growth in Westminster
Report: Good Growth for Central London
