Changing character 

The strength of Midtown’s potential is shown by the fact it drew record levels of investment just at the time when, ahead of the European referendum, investors were putting many decisions on ice. Now that Britain has voted to leave the EU, Midtown still has the fundamentals to maintain the momentum – if the right development strategies are employed.  

Precise definitions of Midtown vary.  Here, we consider it to comprise Bloomsbury, Clerkenwell, Farringdon, Holborn and St Giles and Temple. It is not immediately obvious what unites these neighbourhoods but they are developing an increasing amount in common as a new shared ambience grows in Midtown.   

The single most powerful driver of change in Midtown has been the transformation of Farringdon station into a Crossrail hub. When the new train line opens in 2018, Midtown’s constituent parts will be minutes from the hearts of the both the East and West End, as well as one the UK’s busiest transport interchanges.  

Another game-changer for the district is that businesses no longer feel that they have to be based in a certain part of London. If hedge funds can move into Shoreditch and advertising giants Ogilvy & Mather can perch on the South Bank, location-wise anything is possible.  

Hence a succession of new arrivals in Midtown break with the area’s tradition: Some 51% of office take-up in Q1 was from design, advertising, marketing & PR, media, internet and technology & telecoms companies. Examples include advertising agency Publicis Groupe taking the 58,200 sq ft of office space in the Turnmill building on Clerkenwell Road, Student.com acquiring 17,721 sq ft at 7-8 St Martins Lane and Omnicom taking 11,404 sq ft at Orion House. 

In addition, a high volume of the Q1 Midtown deals were in the small-to-medium size range, with the majority (68%) of transactions being 5,000 sq ft and below, and 52% of all transactions being under 3,000 sq ft (Farebrother). 

Our current project to remodel 90 Fetter Lane is a case in point. Whereas the building was previously majority occupied by a single law firm in an area that amounted to London’s ‘legal quarter’, we are repositioning it with a full refurbishment complete with carefully chosen ground floor retail, designed to meet demand for contemporary workspace from businesses with smaller space requirements in a range of sectors: creative, media, technology, professional and financial.

Central point 

Together these smaller businesses are forming a more eclectic, creative and dynamic atmosphere, but one future new occupier is set to truly change the tone of Midtown. The Museum of London’s relocation to Smithfield – scheduled for 2021 - will provide the central point that will cement the area’s place-making.  

The scheme looks set to rejuvenate Smithfield – with some spectacular shortlisted designs revealed in June - while retaining the market, bringing disused buildings back into the mainstream and decisively transforming Smithfield from a zone for late night clubbing and early morning meat trading into a cultural destination.  

The museum’s wider impact will be to pull together the seemingly disparate strands of Midtown into a coherent theme by overlaying the district with a cultural tone. This is particularly because it links together existing cultural assets peppered throughout Midtown, including Universities (London School of Economics, Kings College, UCL), law firms and the green spaces around chambers, the heritage of Fleet Street, Clerkenwell’s design businesses and the British Museum.  

With a cultural ‘anchor tenant’, a rich mix of vibrant business sectors and excellent connections to the City and West End, Midtown starts to look like becoming London’s true central point. These are fundamentals that will not be changed by the vote for Brexit. The prevalence of small to medium size transactions in Midtown also places the district well to withstand any wider real estate market volatility over the months ahead, because smaller transactions tend to be driven more by micro factors than geopolitics.  

Continued place-making 

However, Midtown’s place-making is not complete, so asset managers and developers have a part to play in ensuring that developments are configured carefully and in a coordinated way to reflect and reinforce the emerging Midtown atmosphere. This will, in turn, set up their developments to succeed. Attracting a thoughtfully curated mix of occupiers to Midtown’s offices is therefore crucial to the district truly fulling its potential to become the thriving centre of London.  

With excellent transport links imminent, it is now down to the real estate industry to get the individual buildings right. This means offering workplaces that meet the demands of the modern workforce – none more so than the flexibility-seeking and technology-driven millennial contingent. We’ll be writing more on this in a future post.