Wandering around central London over these past few weeks has reminded me a little of the run-up to the Olympics in 2012 when the capital underwent a major spruce up as investments were made in roadways and other core infrastructure in order to impress the world’s TV viewers and the influx of overseas visitors.
During a recent stroll down Regent Street, for instance, I found numerous large planters placed on widened pavements and many newly installed cycle ways across various parts of London that are massively helpful in ensuring the city becomes greener, more pedestrianised and, generally, a lot more liveable.
This time it is the not only the overseas visitors that the capital will be looking to impress but also commuting office workers, returning EU nationals, and the many “Londoners” who have decamped to less urban locations or back to their families to see out covid-19.
As well as the enhanced pathways and new cycle lanes, the closing of roads for hospitality is also greatly welcomed. It is hoped the continental vibe this move gives to central London will continue with the extension of road closures beyond the scheduled September end date.
To help this process of bringing London back to life, the mayor has launched a £6m campaign to encourage domestic and international tourists back to the capital by putting on various events that showcase the capital’s public spaces and its “cultural riches”. Such actions are a counter to a worrying – scaremongering – recent report from Ove Arup that was commissioned by the Greater London Authority. It suggested three scenarios, including one with tourist numbers not climbing back to 2019 levels until 2031, 100,000 jobs being at risk over the next two years, and a worst-case scenario of returning central London office workers reaching only 40% of pre-covid-19 levels.
This paints a near-apocalyptic picture but I’m simply not buying it. For instance, one of the key conclusions of the report is that more people need to live in central London. We’re already seeing evidence of the appeal of living in the capital return strongly. More super-prime homes were bought in the capital than in any other city in the world in 2020. The total was only 5% down on 2019, according to Knight Frank, which found New York sales fell a hefty 48% while in Hong Kong it was down 27%. Things have been picking up across the whole of London property market, as rental levels have dropped, with new lettings agreed in the central area for the three months to February jumping 17% compared with the same period the year before, according to LonRes.
But far more important is London’s pulling power to younger people who give it that much-needed vibrancy, vitality and disposable incomes that they are willing to spend on leisure and hospitality. Again, we have positive evidence here as real estate business JLL found 87% of the new tenancies in Zone 1 agreed over the past year have been signed by people aged 18 to 39 who have been taking advantage of the lower rent levels. This skew towards the younger demographic is compounded by the fact only 51% of central London residents fall into this age grouping.
London has always been a great place to live and work for young people, and this evidence supports my view that this will very much continue post-covid-19. The capital will also benefit from many more people returning to commuting into the city than is being forecasted. Having had zero office life for more than a year, it is all too easy to say things will never be the same again. Investors will know that for every inflated bubble market about to pop there will be myriad commentators and economists suggesting it is different this time. History has repeatedly shown it never is.
Yes, there will be the very welcome opportunity for more flexible working but much of the working patterns we had before will return because, despite some of the undoubted negative aspects to office life (ie. commuting), it does provide many upsides. That’s why it has remained in place for so long. Clearly, it would be wrong to say we will return to exactly what we had before but I feel there will be a whole lot more of the same than there will be differences – apart from more planters on wider pavements perhaps.
Certainly many of the characteristics typical of pre-covid-19 central London have been returning over the past few weeks, including some tentative returns to offices and growing numbers of people out and about enjoying the top-class eating and drinking establishments for which the city has rightly been renowned.
Glynn Davis, editor of Retail Insider
This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.