trending Market Intelligence /marketintelligence/en/news-insights/trending/GOqAhh4D7AFjK3BaeCZw8g2 content esgSubNav
In This List

Are Boris Johnson's planners about to get tougher on tall buildings?


FIMA EUROPE 2023: Exploring the Intersection of Data, Governance, and Future Trends in Finance


Infographic: The Big Picture 2024 – Energy Transition Outlook


Essential IR Insights Newsletter Fall - 2023


Masters of Risk | Episode 6: Masters of Risk-Jennifer Reynolds

Are Boris Johnson's planners about to get tougher on tall buildings?

TheGreater London Authority has recommended the rejection of and Ballymore'scontroversial Bishopsgate Goodsyard development in London's Shoreditch forplanning permission, citing a litany of "unacceptable" design flaws,according to an April 8 report.

Thedensity, height and massing were deemed unsuitable by Mayor Boris Johnson'splanning team. Johnson has been a particular supporter of the project, havingcalled it in back inSeptember 2015, taking the decision out of the hands of Hackney and TowerHamlets local councils in order to deliberate on its future himself. City Hallhas been a champion of the commercial property industry during Johnson's timein office, and the mayor has pushed through a number of projects that have beenhighly unpopular with local councils and campaign groups alike. 'sNorton Folgateredevelopment on London's City fringe is one example: Johnson overruled thedecision of Tower Hamlets council in January, and the scheme is now set to goahead.

REITssuch as British Land and Hammerson have, to a large extent, been basking in theapproval of London planners in recent years. But is the resounding"no" that the GLA has given Bishopsgate Goodsyard a sign that thatthere is change in the air at City Hall?

"Borishas called in 15 other schemes in his years in office and all have beenapproved," Jeremy Freedman of More Light More Power, a lobby group thathas been opposing Bishopsgate Goodsyard, said in an interview.

"Neverbefore has City Hall's own planning team said 'No, this is ridiculous.' For Boristo go against his own planning team, two local councils and tens of thousandsof people who do not want the development to proceed, is madness. This isregeneration in reverse. It's degradation."

Theplans have had a substantial pushback from the general public. A petitionduring the public consultation period garnered over 10,000 signaturesin February. And in an unprecedented move for a local authority, HackneyCouncil launched a campaign that included adverts on buses calling for thescheme to be rejected.

TheBishopsgate Goodsyard site has been derelict for 50 years. The Hammerson/BallymoreJV entered into a binding agreement to buy the site in 2002 after the ownerRailtrack (now Network Rail) went into administration in 2001. It is designedby British architect Terry Farrell and features seven residential towers of upto 46 stories each.

Thereare a number of reasons why the scheme has proved so contentious. One is thelack of community facilities, cultural space and affordable housing (affordablehomes make up 10% of the scheme), Freedman said, and the other is the questionof "right to light," an issue which is both practical and symbolic.The towers would cast a long shadow over Arnold Circus and the Boundary Estate,an 1890s residential development that was the U.K.'s first social housingproject built on the site of the Jago, one of the city's most notorious slums.

"Itwas built on to bring people out of the Jago and into the light. We didn't makeup the phrase 'More Light More Power.' It's actually inscribed on the town hallin Shoreditch," Freedman said.

Thenews of the Bishopsgate Goodsyard's rejection comes shortly after another majorscheme nearby, 22Bishopsgate, won a rights of light dispute earlier in April. TheCity of London Corp.'s Planning and Transportation Committee (a separate entityfrom the GLA) voted in favor of Axa Investment Managers – Real Assets andLipton Rogers' 1.4 million-square-foot development, ending a long-runningdisagreement with neighboring landlords.

However,there are signs that there has been a shift in public sentiment regarding tallbuildings in London, especially high-end residential towers, Mark Cleverly,partner at Arcadis LLP, said in an interview.

"Isense that there has been more of a public challenge to residential buildings.There are a lot of questions about who will be living in these buildings, andwhether they are for local people to live in, or just for wealthy investors.The public perception of these schemes is often that they are too commercial andtoo opportunistic," he said. "Boris has been associated with beingvery pro-development. But a lot of high-rise development has come online duringhis term in office."

It'scertainly true that there are a lot of high-rises in the works. According to aMarch 9 reportfrom New London Architecture, there are an additional 119 new tall buildingsplanned for London since the same month in 2015. That makes a total pipeline of436 buildings, according to the report. The borough of Tower Hamlets, whereBishopsgate Goodsyard is located, has the highest number of tall buildings inthe works, with a total of 93 either in planning or pre-application stage.

The worseninghousing crisis in London and the southeast has undoubtedly heightened thedebate around tall residential building, Cleverly said.

"Thepolitical thermostat has been turned up on this issue," he said.

Interms of share price, Hammerson seems to have been unaffected by the news.Shares closed at £575.50 on April 7, the night before the rejection wasrecommended. They had risen slightly to £589.50 at the end of April 8. At closeof play April 12 (by which point the markets would have had the chance toabsorb the news) the price was at £587.50.

"Weare disappointed that the GLA's report has recommended the scheme for refusal.The Goodsyard is one of central London's most important strategic sites whichwe believe will contribute to the long-term growth and success of London,"a spokesperson for Hammerson said in a statement emailed to S&P GlobalMarket Intelligence.

CityHall declined to comment, and Ballymore could not be reached.

Londonappears to be at a particular cultural moment in which awareness of the housingcrisis is high, and a growing fatigue with tall buildings is starting to setin. Perhaps it's no coincidence that one of the films that British cinema goerscould enjoy over the Easter weekend was High-Rise, an adaptation of the J.G.Ballard novel, in which the residents of an avant-garde (yet rather ominous)London skyscraper descend into anarchy and violence.

Atany rate, it's not curtains for Bishopsgate Goodsyard yet — the project willcome before a public hearing at City Hall on April 18.