By Vanessa Clark, Partner of Sinclair Clark
The Ruskin Square development is a game-changer for Croydon. A new skyline now greets the thousands of passengers who travel through East Croydon Station daily, immediately improving perceptions of the quality and scale of regeneration being delivered in the town.
HMRC taking the entirety of the 184,000 sq ft development at 1 Ruskin Square – the first of the government’s 13 new state-of-the-art regional centres around the country – was a huge moment for the town.
The first 600 members of staff, who were previously based in Southern House, have made the short move to the new offices and the new building will become home to 2,700 HMRC employees by 2021.
Having cut the ribbon to officially open the development, HMRC says its new office will enable it to be become one of the most digitally-advanced tax authorities in the world and executive chair Edward Troup said: “This building is a great place to work.
“Ultimately, bringing teams together gives us the opportunity to work differently and more effectively, and that is part of making HMRC a tax authority fit for the future.”
That was the single biggest factor in a bumper year 2016 for office take-up, beating most years in Croydon’s history.
In addition, Superdrug took 52,000 sq ft of newly refurbished space at 8 Bedford Park, which includes a striking new entrance onto Sydenham Road.
In further progress, Renaissance has recently attracted cloud software company Solium which took 10,414 sq ft. With quoting rents now at £34.50 psf this demonstrates a positive uplift for the asset manager M&G from the £22.50 psf the Grade A development attracted when Abstract Securities shrewdly developed it speculatively and, brought it to the market four years ago.
An increase in rents across the board reflects a striking fact that, behind the headlines, office availability reduced to an all-time low during 2017.
A major contributor to the reduction is the lingering effects of permitted development with 27 buildings formerly classed as B1 (used for business), poised for, or, in the process of being converted to residential.
While a host of new developments are also bringing thousands of new homes to the market, there is little in the pipeline to suggest there are sufficient offices being built which will meet Croydon Council’s stated aim of providing jobs for residents living in the borough.
Within the consented pipeline the second major office phase being brought forward by Stanhope and Schroders will bring more office space – and more prestige – again being suitable for a government department or as a corporate Headquarters but it will take time before the new buildings evolve naturally to offer additional space for companies seeking say a floor.
Guildhouse Rosepride’s new consent at One Lansdowne allows for a further 317,000 sq ft of Grade A offices, while Freshwater is at a pre-application stage for a seven-storey 120,000 sq ft headquarters building in George Street.
Added to this, Menta has plans for an office component within their next phase of residential /mixed use towers delivery and on adjoining land.
The occupier market will continue to be led by structural demand such as lease breaks and expiries. The same structural events may provide a much-needed source of space returning to the market.
Take up and therefore demand, has dipped this year compared to last year but, when it returns to its normal level, it would be comforting to see more stock coming to the market to offer existing occupiers some churn. It would be disheartening to see occupiers forced out of the town because of a lack of supply.
- Vanessa Clark of Sinclair Clark consultant surveyors is an expert on Croydon’s commercial market.