FTSE 100 property giants urge Burnham to unleash London office construction
London’s leading property giants have urged Andy Burnham to unleash a wave of new office construction in the capital to boost the UK’s stagnant productivity and sluggish growth.
The London Property Alliance (LPA), which represents the capital’s 300 biggest property developers and investors, has written to the incoming Prime Minister urging him to designate central London offices as critical economic infrastructure.
The LPA represents the City and West End property alliances, whose members include FTSE 100 developers like British Land and Landsec, as well as Nasdaq-listed CBRE.
The letter, seen by Morning Wire, blames the UK’s stagnant productivity in part on a shortage of high-quality office space in the capital.
“For too long, productivity growth has flatlined, holding back wages, investment and the tax revenues needed to fund high-quality public services and local infrastructure,” LPA chief executive Charles Begley told Burnham.
London “must be able to deliver the modern workspaces needed for businesses to grow and retain a greater share of the proceeds of growth to reinvest in public transport, affordable housing and public services,” Begley said.
Office squeeze threatening London’s output
The number of major commercial planning applications in central London fell by 54 per cent in the decade to 2023, despite the opening of the Elizabeth Line – which developers hoped would spur on new projects.
As much as 14m sq ft of office floorspace was lost in the five years to 2023, which the LPA says is equivalent to nearly 12 Canary Wharf towers.
This slowdown is threatening London’s ability to attract international companies and retain top talent, the developers claim.
By designating central London offices as critical economic infrastructure, the developments would gain extra weight in planning decisions, the developers said.
“The UK’s leading sectors – including financial and professional services, tech, life sciences and the creative industries – depend on access to modern, high-quality workspace if they are to compete internationally,” Begley said.
Office-based sectors support around 2.8m jobs across Greater London and generate nearly £290bn in economic output every year, according to the LPA.
London ‘should benefit from devolution’
Burnham should also push through long-mooted infrastructure projects like the Bakerloo line extensions and Crossrail 2 to support central London workers, the group said.
The major developers have also urged the incoming Prime Minister to use his devolution plans to support local authorities in the capital.
Burnham has pledged to “rewire” the state by handing more power to local councils and setting up a “Number 10 North” in Manchester.
But the LPA said this devolution drive should spread power across London by handing local authorities more business rates revenue.
“Too often London is conflated with Westminster and Whitehall, yet, like every other great city, London should have the powers and resources to respond to its own opportunities and challenges,” Begley said.