What next for London’s markets?

The City of London’s decision to combine and relocate Billingsgate, New Spitalfields and Smithfield markets will be a once-in-a-generation catalyst to regenerate a new 100-acre site outside central London. It will also spark a further 54 acres of development on the markets’ existing sites, including the culturally sensitive Smithfield, situated in the heart of the City close to Farringdon Station, which will be one of the capital’s transport epicentres once Crossrail is operational in December. Lambert Smith Hampton has been charged with finding a suitable relocation site, a process predicted to take between six and 12 months, with a focus on the east of capital as far as Romford, Rainham and Dartford by the M25. “That side of London will be best for the current traders and there are a few potential sites out in that Thames Gateway area,” says Jeremy Gardner, director in capital markets at JLL. However, Rory Brooke, head of economics at Savills, warns that relocation too far east could cause issues for the traders whose main customer base currently is within central London.  Parliamentary legislation is required for the City of London to carry out its plans, and it has said a private bill will be submitted in due course. It is anticipated that the progression of the bill will take place at the same time as the search for a new site and the consultation with the various interested parties, so that the City of London will be in a position to acquire the site to progress its plans quickly. The decision in principle to shift the markets to a site further out of central London follows a strategic review, carried out by GVA, Optimal Consulting, BDP, WSP and Experian into how the continued operational success of the markets could be secured. So what could the future hold for the current sites? Smithfield [caption id="attachment_938874" align="aligncenter" width="847"] Image © Ilpo Musto/REX/Shutterstock[/caption] A Covent Garden-style makeover has been mooted for the grade II* listed buildings that currently make up the home of London’s 1,000-year old Smithfield market, EC1. The most likely outcome for the site could be that the City would look for a partner or joint venture, rather than sell it outright, in order to maximise its influence in the area over the long-term as it looks to build the area a cultural centre. It is the only market site of the three earmarked for consolidation within the City’s catchment area. Redevelopment attempts However, the redevelopment of Smithfield market has been a controversial topic, with two previous attempts to redevelop parts of it thwarted. In 2008, developer Thornfield had its plans scuppered by then secretary of state Hazel Blears, who called in and then rejected on heritage grounds the redevelopment of the non-listed General Market building at the far-western end of the market. Prince Charles also waded into the debate, letting it be known that he opposed any large-scale development of the site. Thornfield’s subsidiary, which held the Smithfield interest, subsequently went into administration after Lloyds withdrew its backing at the start of 2010, following its takeover of Thornfield backer HBOS at the height of the financial crisis in 2008. Henderson Global Investors (now TH Real Estate) then acquired the site and began its own doomed attempt to redevelop the western part of the market. [caption id="attachment_938871" align="alignright" width="297"] Click to download[/caption] The government again stepped in, following a campaign by SAVE Britain’s Heritage and the Victorian Society, and refused plans for redevelopment at the market due to concerns over the damage to the conservation area’s character and appearance. TH Real Estate then sold back the site to the City of London for £35m in 2015. The West Smithfield site is now earmarked to become the new home of the Museum of London, funded by the City of London and the London mayor. This marks the start of a new cultural quarter in the area, which also comprises proposals for a new centre of music at the museum’s current home on London Wall. The museum is to occupy the Smithfield General Market, the fish market, the Red House and the Engine House buildings and the basement of the Poultry Market (pictured), but is also exploring the possibility of taking the whole of the Poultry Market building. The museum has said it is aiming to start a public consultation on plans for the West Smithfield site in the autumn, with a view to getting planning approval in 2020 for a 2021 construction start. Meanwhile, Historic England has said it will be working with the City Corporation “to ensure that any proposed change of use would safeguard the significance of this listed building, which is steeped in history and so special to London”. The market’s traders have made no statement about the potential move, but a source close to a previous proposed development says: “The traders realise they need to move, although publicly will deny it, but really they want to get as good a compensation as they can. They still have at least 10-year leases left. The situation with the traders has stymied the site for quite some time.” Perfect location Despite the setback suffered in 2014, TH Real Estate’s director for central London, Clive Castle, says the firm would be interested in looking at the redevelopment of the rest of Smithfield Market, which comprises 210,521 sq ft across three listed buildings. He says: “It’s a very interesting development and Covent Garden has been incredibly successful since the market moved away from there. “It would be nice for the meat market to maintain a presence in one of the buildings, providing meat products to London-based clients like hotels and restaurants, as its presence adds to the authenticity of the area. Look at how successful Borough Market is – it’s a draw. “It’s also next to one of the most well connected Crossrail stations, with Thameslink going north and south complementing the east to west route of Crossrail, so it’s the perfect location for new amenities to take off.” TH Real Estate still has interests in the area, with planning consent for an office-led scheme on the corner of Farringdon Road and Charterhouse Street which Nick Deacon, head of European offices, says could be started next year. Richard Upton, deputy chief executive of U+I, co-funded and supported the campaign to stop TH Real Estate’s plans for West Smithfield. He considers the area to be “very gritty” and hopes it won’t be made into something shiny and prohibitive to the public.  “Cities need grit,” he says. “It’s also a great thing that west Smithfield will house the museum, as it means that it will stay a public space that people can continue to engage with as they have the market.” Billingsgate [caption id="attachment_938873" align="aligncenter" width="847"] Image © Rex/Shutterstock[/caption] Arching around the northern side of Canary Wharf and Wood Wharf, E14, the 13-acre Billingsgate Fish Market is considered the crown jewel of the three market sites earmarked for consolidation. As potentially the most valuable site in terms of development opportunity, it is also the one likely the City of London will look to use to fund the move of all three markets, rather than retaining it for long-term income. [caption id="attachment_938870" align="alignright" width="293"] Click to download[/caption] Canary Wharf Group is very likely to be in the running for the site as a way of expanding its holdings in the Docklands. The group’s Wood Wharf development is well advanced, with two residential towers due to complete between 2019 and 2020 now 85% and 62% sold respectively. However, other big developers in the area such as Ballymore and Berkeley Homes, which owns South Quay Plaza, and Gallliard Homes, which has a 642-home scheme at Harbour Central and a 338-home project at Orchard Wharf, could create a bidding war. The City of London and Tower Hamlets jointly control the site. The City of London owns the freehold of the land, but there is a 999-year lease held by Tower Hamlets, which in turn has granted a 99-year lease to the City, commencing in 1982, according to a report from consultant URS in 2007. In addition the City also pays an annual rent in the “gift of one fish” to Tower Hamlets each year. Mixed-use potential Jeremy Gardner, director in capital markets at JLL, said: “It’s a major site at Canary Wharf right next to the Crossrail station and it’s very underdeveloped in terms of density now and it could be a major office or mixed use scheme, similar to what Canary Wharf Group are doing at Wood Wharf. “It is an incredibly well located, large site that undoubtedly would bear high density and substantial development.” “It’s clearly a cracking site,” agrees Rory Brooke, head of economics at Savills. “It would lend itself to a mixed-use scheme, but the balance of residential and commercial, you’d let the market decide at the time.” He adds: “As everyone knows, there’s a lot of people interested in buying land in London and as it’s a prime site there will be a lot of people interested in it, but I’d have thought it would fit very well with Canary Wharf Group’s estate.” However, one regular customer will find the relocation of the fish market from its Docklands home difficult. Sammy the seal has been visiting the market for around 13 years for a regular meal. New Spitalfields [caption id="attachment_938875" align="aligncenter" width="847"] Image © Tony Larkin/REX/Shutterstock[/caption] The largest of the markets at 31 acres, New Spitalfields, relocated to the site in Leyton, E10, in 1991 from its Shoreditch. Located just north of L&Q and Taylor Wimpey’s housing development Chobham Manor, within the Queen Elizabeth Olympic Park, and the Lee Valley hockey and tennis centre, the site is “one would expect to become mainly housing,” according to JLL’s Gardner. The City of London is thought to have previously looked at combining the three markets on the New Spitalfields site, but ruled it out as the site could not provide the needed capacity. [caption id="attachment_938869" align="alignright" width="272"] Click to download[/caption] However, with Gazeley planning to build a three-storey warehouse in Peruvian Wharf – the first of its kind in the UK – showing what might be possible in the future, and the push by London’s mayor to intensify the use of industrial land, the idea could return to the table as an option. The fruit, veg and flower traders of New Spitalfields market are thought to be in favour of relocating. A spokesperson for the Tenants Association at New Spitalfields Market, said: “The New Spitalfields Market Tenants Association are keen to be involved and support the prospect of a relocation of the three markets to a composite site in the local vicinity.  “We are working with the Corporation of London to ensure that any move will be to the advantage of all tenants.” ‘This is a chance to redefine London’ It is an exciting opportunity to reimagine the sites the markets currently occupy, but I think that’s the easy part, writes Richard Upton, deputy chief executive, U+I. The more exciting opportunity is what the new markets in a new location could become. It’s not just about the market and what happens inside it, but all of the chaos and activity that surrounds it, that makes it personal to us. My father was a City of London policeman at Snow Hill and I remember as a kid going around the market [Smithfield]. The pubs were open all night, there were cafés and other industry. It was a cluster of activity that created a very great place. The reason that a market stays in a place, like Smithfield has for 1,000 years, is because it is fundamental and critical to the soul of what a city is. You always visit a market, wherever you are. Smithfield market was described as “a smooth field where every Friday there is a celebrated rendezvous of fine horses to be sold” by William Fitzstephen, clerk to Thomas à Becket, in 1174. Charles Dickens, in his novel Oliver Twist, wrote that Smithfield was “a stunning, bewildering scene which quite confounded the senses”. “The reason that a market stays in place, like Smithfield has for 1,000 years, is because it is fundamental to the soul of what a city is.” So this decision by the City of London Corporation could be an opportunity for the London mayor to step in and ensure that this is not just a property transaction to reimagine some historic sites, or for an industrial developer to build a big box, but an opportunity for London to redefine itself for the next 1,000 years, so that whoever the next Charles Dickens is can get excited about the place – rather than EG readers getting excited about how much money they can make. The new market site could create a new tourist attraction, or be the centre of a much larger new village or garden suburb that clusters people together, instead of lorries around a nondescript box. It needs to be a market that doesn’t just look inwards as a property function or just a distribution hub, but looks at how an incredible place on the outskirts of London could be created. There are many 100-acre sites, such as redundant golf courses or fringe areas promoted as new settlements by housebuilders, which could be used to create something more like a market town, which has places open all night that can serve the workers at the market and the community, as well as a real vibrant consumer edge. Then you might have something that is a big economic driver as well as a tourist attraction. Perhaps we need to think of it as a socio-economic catalyst for growth in an underprivileged area. All it needs is little vision and effort. To send feedback, e-mail Louise.Dransfield@egi.co.uk or tweet @DransfieldL or @estatesgazette