Further Alterations

to the London Plan

2014

Consultation draft

Purpose of the Further Alterations to the London Plan (FALP)

• Develop concept of the Plan as the ‘London expression of the National Planning Policy Framework’;

• Provide robust, interim planning framework to address the key housing and employment issues arising from a substantial increase in population and to support recession recovery, until the long term implications of these are clear

• Minor changes in terms of fact; changes in national policy; support for the Mayor’s Housing and other strategies and where relevant address other advice to the Mayor eg from the Outer London Commission.

London’s demographic challenge

• London population 2001 (revised):7.34 mil• London population 2011 (Census):8.17 mil

= 83,000 pa increase

BUT

London Plan 2011 – 2031 assumes 51,000pa

AND

new GLA trend projection 2011 – 2036 suggests 76,000 pa, and over 100k in earlier years….

London’s demographic challengePopulation growth 1971 - 2036

London’s demographic challengeAge structure change 2011 - 2036

London’s demographic challengeDistribution of population growth 2011 - 2036

London’s employment growth

Distribution of employment growth

The office policy review process• Trends and emerging market issues NB recession:

structural cf cyclical changes• Quantum of growth• Nature of growth• Distribution of growth• Key issue: CAZ and competing land uses• Key issue: Outer London - managing consolidation and

PD rights• Other policy issues eg ‘mega-schemes• Market testing• Plan, monitor and manage

Market data: supply and demand

Office starts, Central London, 1984-2011

Market data: supply and demand

Availability and take-up, Central London, 1990-2011

Market data: supply and demand

Central London office rents, 1980–2011 (2011 prices)

Market data: benchmark 1

Ratio: permissions to average previous three years starts

Market data: benchmark 2

City availability ratio versus headline rent, 1986-2011

Employment and floorspace forecasts

Borough 2011 2031 2011 - 312011-31

% change

London 1,741,382 2,174,478 433,096 25%

City 296,577 358,946 62,369 21%

Westminster 317,967 370,319 52,352 17%

Camden 134,257 179,887 45,630 34%

Tower Hamlets 127,374 162,424 35,051 28%

Southwark 106,474 136,943 30,469 29%

Islington 98,751 127,243 28,491 29%

Hackney 30,620 39,959 9,339 31%

Office employment forecasts by borough, 2011-2031

Employment and floorspace forecasts

Borough2011-31 floorspace

(Sq m NIA)2011-31 floorspace

(Sq m GIA)

London 5,098,405 6,454,862

City 734,203 929,541

Westminster 616,291 780,258

Camden 537,161 680,075

Tower Hamlets 412,616 522,394

Southwark 358,685 454,116

Islington 335,401 424,637

Hackney 109,941 139,191

London needs an additional five million sq m by 2031

Prospects for non-CAZ office centres

London office stock change, 2000-12

Concentration of growth in Tower Hamlets and the City is clear. Fringe boroughs of Camden, Southwark and Islington increased by c 200,000 sq m.Relatively low growth in Westminster. Outer London’s demise is clear.Croydon and Harrow each experienced a loss of over 100,000 sq m.

Prospects for non-CAZ office centres

Office floorspace completions in Outer London, 2000-08

In 2008, no new office buildings were built in nine of 20 Outer London boroughs. In any of the five years leading up to 2008, between 10 and 13 Outer London boroughs delivered no new office construction.The picture was particularly acute in the East London boroughs.

Workstyles and occupation densities

2.5 million sq m; 381 properties; 1,331 floorsMean: 10.9 sq m

Occupancy densities, BCO research 2013

SectorDensity

sq m NIACorporate 13.1Professional 12.3Public 12.1TMT 10.5Financial 9.7

London’s mega schemes: first generation

London’s mega schemes: second generation

Office to residential

StageNumber of

sitesB1 floorspace losses (sq m)

Residential units

Completed 767 -505,800 11,400

Started 379 -515,100 13,200

Not started 1,019 -654,700 14,400

Total 2,165 -1,675,600 39,000

London floorspace losses 2009-2012

Office to residential

Borough% of B1 floorspace losses

Total (sq m)Completed Started Not started

Westminster 31 19 16 -361,500

Tower Hamlets 7 5 12 -138,200

Croydon 8 8 4 -104,600

City 2 2 9 -82,700

Lambeth 4 8 3 -77,700

Kensington & Chelsea 2 11 2 -77,200

Camden 5 5 4 -76,600

Islington 3 4 6 -73,000

Southwark 2 3 7 -69,500

Hammersmith & Fulham 3 1 6 -62,500

London (sq m) -505,800 -515,100 -654,700 -1,675,600

Loss of B1 to residential - % of total London losses

Hybrid office/industrial activity

Audio-visual equipment installation Maintenance contractorCash and carry Manufacturer of sweetsDesign and manufacture of applied arts Oriental food supplierE-trading Recording equipment repairEvent catering Short-run digital printingFreight forwarding Specialist provider of gift wrappingGraphic design Wine importer

Production SupportAssembly Management and administrationCraftwork Goods dispatch/receipt

Customisation Customer support (call centre)Design Customer consultation

Engineering DemonstrationFood preparation Retail & wholesale salesGraphic design Sales & marketingMaintenance Technology

Packing TrainingPrinting Software developmentRepair Showroom

Storage & consolidation Entertainment and hospitality

Conclusions from LOPR 12

Occupiers• Structural slowdown in office economy = lower demand

growth.• Changes to business process + workstyles = spaceless

growth.• Public sector rationalisation.

Business geography • Looser business geography, with shifting and emerging

clusters.• Further concentration of business activity in mega schemes.• Less demand in Outer London? Less demand in West

London?

Workplace• Working practices: flexible working styles; utilisation.• Diversity of stock (quality, size, location) for a diverse

occupier base.• Loose fit buildings: economic, lower spec, flexible space.

Conclusions from LOPR 12

Property market • Implications of the mega scheme pipeline: plenty of capacity.• Outer London: further decline? 1960s/1970s stock a lost

cause?• More refurb and less new build?

Spatial planning policy• Capacity is not the issue: issue is more sensitive spatial

policy.• TMT: you can’t plan creativity!• Mixed use space and how to integrate office space.

The known unknowns• Employment forecasts and economic change?• Hub airport strategy: potentially huge impact on west London

offices? • The impact of resi values on marginalising commercial

activity?

Retail policy review process

• Trends and emerging market issues NB ‘austerity’, population, multi channel

• Quantum and nature of growth: independent assessment

• Distribution of growth• Key issue: town centres first – London approach• Key issue: retail and resi - integrated action• Other policy issues eg out of centre, PD rights• Market testing• Plan, monitor and manage

The drivers of change: assessing the balance between retail supply and shopping demand

Existing demand

population and spend

Existing Retail supply

Pipeline of Retail

developments

Improved Retail space

efficiency

Population growth

Economic growth

Major Retail development

nodes

Loss to

Internet

DEMANDSUPPLY

“Special forms of trading” assumptions – projected share of non-store retail

sales

Demand - residential spend by centre 2011

Demand - tourist spend by centre 2011

Demand - commuter spend by centre 2011

Supply - current floorspace provision

Supply - current vacancy

Supply - current pipeline

….and also in the wider city region (nb ‘Duty to Cooperate’)

Experian scenarios = ‘what if?’

…. and, for example, adding in 4 (or 8) major development nodes

Growth scenarios

Scenario 2011 £18.6 bll. 2036 £bll:

Gross floorspace requirement 2011 – 2036 mll sq m

Net floorspace requirement 2011 – 2036 mll sq m

Baseline £39.2 2.2 0.94

Pipeline £39.5 1.6 0.37

4 Nodes £39.6 1.6 0.40

8 Nodes £39.8 1.7 0.48

Quality adjustments

£39.7 1.7 0.48

…gives, at LB level, for the ‘Pipeline’, a net balance of…

…or for the ‘8 Nodes’ scenario, a net balance of …..

… or for the ‘Quality Adjustment’ scenario, a net balance of…

…. also available at centre level eg if all pipeline constructed and 4 nodes ….

Brent Cross, Westfield, Westfield Stratford & CroydonBase spend 2036 top shopping centres

Croydon gainsIt impacts Kingston, Bromley, Sutton and Bexleyheath

Westfield Stratford It impacts Stratford and Ilford

The 2011 Plan town centre network: is a network based approach still the best to

achieve the Mayor’s objectives?

“How should the town centre network respond to changing levels and patterns of consumer

expenditure”

• Do these scenarios reflect what might actually happen? Alternatives?

• Retain existing ‘town centre first’ policy • How far can we go with existing policies/SPG

in addressing these challenges?• Are the challenges so great that we need to

change existing policy through FALP?• If so, how and over what timescale?

How can the housing potential of town centres be realised? Existing policy…

• Accommodating residential development in town centres

• Housing from surplus offices (redevelopment / conversions)

• Implementation of mixed use and housing

• Housing density

…and average household size increasing from 2.3 to 2.5….

• 2011 London Plan assumed household size would decline from 2.34 to 2.19 persons to 2031

• approximated to 34,000 extra (and generally small) households pa

• BUT• 2011 Census shows 2.47 average across London with a lot of

local variation• GLA projection suggests c40,000 pa more households 2011 –

2026 …and housing requirement could be 49 - 62k pa

• General housing implications: higher overall requirement with more small households in some places, more big (over crowded?) ones elsewhere?

….what role can town centres have in addressing this need?

• Great uncertainty over long term future pop and hhld growth

• Must plan responsibly/sustainably: considerable capacity already therefore not GB development/new town

• Emerging SHLAA suggests conventional approach may find capacity for +32k pa

• BUT how to fill the gap between this and need: key roles for town centres and Opportunity/ Intensification Areas

…..possible policy approaches and mechanisms for town centre

intensification• Link with response to reconfiguration of town centre

economic/social roles • Retail and office floorspace contraction; social, service and civic

expansion?• Varies by centre type - and local circs• …. and with PTAL• Flexibility to go to the top of the density range (and above in some

circs?)• How to reconcile with local character objectives• How to enhance quality of the centres themselves – for C21st• What partnership/funding arrangements required?

The policy response….

Consultation draft Further Alterations to the London Plan

The office policy response: Further Alterations to the London Plan

• “where justified by local and strategic office demand and supply assessments and in areas identified in the LDF as having a particular need for local office provision, provide protection for small scale offices (under 500sqm) within the CAZ.”

• “where justified by local and strategic office demand assessments and in areas identified in LDF as having a particular need for local office provision, require residential proposals within the CAZ which would otherwise result in the loss of office space to make a proportionate contribution to provision of new office space within, or nearby, the development.”

The retail/ town centres policy response: Further Alterations to the

London Plan

• Update retail need figures taking account of changes in consumer expenditure behaviour

• Net comparison need 0.4 – 1.6 mll sq m cf 1.3 – 2.2 mll sq in 2011 Plan

• Strong cross ref to Policy 2.15 on different approaches to development in small, medium sized and larger centres

• Links London Plan policy to proposed retail PD rights criteria

• Planning criteria to help manage ‘negative clusters’ eg of betting shops, takeaways

Town centre network

Potential future changes to the town centre network

12 week public consultation from 15 January to 10 April 2014

FALP launch event at City Hall on 31st January 2014 at 2pm

Series of consultation events with voluntary sector, business sector, POS event, the wider South East, 5 London sub region.

EIP late summer 2014

Final publication spring 2015

FALP Timetable

Questions?