CoStar Column: Do better roads mean bigger rents?

By Jules Hind - Thursday, January 04, 2018 11:04

The resignation of the Government’s ‘Infrastructure Tsar’, Lord Adonis, has brought into focus the continued need for a co-ordinated approach to the delivery of everything from roads and railways to super-speed broadband, writes Union Street Partners' Jules Hind as he particularly focuses on improvements at London's South Bank.

From Vauxhall to Waterloo, various infrastructure projects are being progressed that should have a real impact on the smooth running of the South Bank.

Transport for London (TfL) is taking the lead with a series of bold plans. It’s working with Lambeth Council on initiatives that will reconfigure the huge gyratory road system that currently dominates Vauxhall, and bring more connectivity both for pedestrians at street level and to road users. The once forbidding Waterloo roundabout is also set to be calmed further by 2020, with the adoption of a two way ‘peninsula’ system, along the lines of Elephant & Castle.

TfL has also revealed plans to abolish the roundabouts at either end of Lambeth Bridge in order to improve conditions for walking, cycling and public transport through what it calls ‘the intimidating junctions’.

Making the connection

A major selling point for any office building is its transport connectivity so it stands to reason that infrastructure enhancements will contribute to a properties attractiveness and, all other beings equal, the level of rent it can command.

When the Jubilee Line was extended south of the Thames, connecting Waterloo to London Bridge and on to Canada Water and Canary Wharf, there was a demonstrable uptick in rents throughout the South Bank. In that context the forthcoming opening (or is it reopening?) of the platforms in the former International Terminal at Waterloo will increase the station’s capacity by an estimated 30%. All of which makes the neighbourhood more reachable for more people – timed to perfection for the new and extended home for Shell, WeWork’s largest London hub and, in due course, the wholesale redevelopment of Elizabeth House by HB Reavis.

We need a map

From a broader perspective, the development of London’s infrastructure is so pivotal it clearly needs co-ordination. So - without entering the debate over financial devolution for London - is there not a case for the Mayor of London/TfL to perhaps take over co-ordination of major infrastructure projects?

Too often, it seems, there are parochial arguments and negative lobbying around crucial projects that would benefit the whole of London. The wonderful prospect of a new pedestrian link between Pimlico and Nine Elms has stalled whilst Wandsworth and Westminster juggle their local stakeholders and other interested parties. World renowned architects drew up beautiful, delicate structures spanning the Thames, opening one of our Capital’s most significant urban regeneration areas, anchored by Battersea Power Station and the new US Embassy but everything has stalled.

To the east of the capital, a much-needed cycle and pedestrian link between Rotherhithe and Canary Wharf may perhaps be a step closer, with a ‘navigable’ bridge (allowing vessels to pass beneath) being TfL’s preferred option.

In the light of all this activity and the other projects which will be needed, the time is right for a London Infrastructure Agency that would be charged with co-ordination and attracting partnership funding from the sort of major institutional investors who specialise in infrastructure.

This new agency and its work could be financed by the GLA committing to send a greater proportion of business rates revenue to HM Treasury if, in return, central Government helps fund London’s ‘infrastructure infrastructure’ alongside other global investors.

Whilst great steps are being taken with improving some of London’s roads, rail, bridges, tunnels and transport terminals, the demands on the city are going to be so great in the next decade and beyond that a co-ordinated approach is essential.

Jules Hind, Union Street Partners

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