Government urged to deliver HS2 to support economic growth
- The Elizabeth line has sparked almost 200,000 new office jobs and the opening of 171 hotels, 2,666 new food and beverage outlets and 12 museums
- 51% of central London office take up in 2023 has been within a 10-minute walk of Elizabeth line stations
- 70% of all BREEAM rated ‘Outstanding’ office developments completed in London have been built in locations served by the Elizabeth line
- Open letter to Transport Secretary calls on the Government to bring a ‘swift conclusion’ to its two-year review of the Euston HS2 terminus and move the project forwards at pace
The success of the Elizabeth line has been vital to the creation of world-class public realm, new cultural amenities, sustainable office buildings and the catalyst for investment and growth – says a new report by the London Property Alliance.
Authored by Knight Frank, the latest data shows how it has helped to drive London’s post pandemic recovery, contributing to above-market rental growth in office submarkets, including Farringdon (46%), Bond Street (37%) and Liverpool Street (37%).
But the benefits of the line stretch across the capital and beyond, with offices within a 10-minute walk of its stations outperforming local markets. The infrastructure project has also seen almost 200,000 new office jobs created in the submarkets served by its stations. The Elizabeth line has acted as a catalyst for investment and regeneration, leading to 171 hotel openings, 2,666 new food and beverage outlets and 12 museums.
The London Property Alliance, which commissioned the research and represents the capital’s leading developers, landlords and investors, said the report findings demonstrate the positive economic and social benefits of infrastructure investment, urging the government to push ahead with schemes such as HS2, in order to support national economic growth. The Government’s plans at Euston station have been delayed and have been described as ‘floundering’.
In an open letter to the Secretary of State for Transport, Mark Harper, the Alliance calls on the Government to bring a swift conclusion to its two-year review of the project and move forwards with its plans for a HS2 hub at Euston at pace.
Euston’s regeneration is expected to result in the curation of a new mixed-use destination, sparking demand for offices, shops, homes as well as other commercial facilities set around green spaces. Moth balling the scheme, would put such crucial regeneration plans to one of central London’s most commercially important areas, at risk.
In addition, recent reports that the connection to Manchester is also under review would clearly undermine the wider objectives of project and erode its ability to fulfil its economic potential.
Charles Begley, Chief Executive, London Property Alliance, said: “The Elizabeth line has been truly transformative and shows how important continued investment in our transport infrastructure is in order to drive economic growth. It is globally renowned as an exemplar of engineering and design excellence, which has led to tangible benefits to London’s commercial success.
“We urge the Government to provide the certainty business needs and move forwards with plans for the HS2 Euston terminus and deliver HS2 in full. This is critical if we are to enable economic growth in London and core UK cities served by the line.
“Euston’s new terminus would also bring socially and economically impactful regeneration across 60 acres of central London, an area yet to realise its potential despite its proximity to one of the UK’s leading knowledge clusters. Leaving vast tracts of it in limbo for years or decades to come would be a retrograde step and a disservice to both the capital and country.”
Shabab Qadar, London Research Partner at Knight Frank, commented: “The outperformance of submarkets along the Elizabeth line has been driven by London’s increasingly diverse occupier base and prime buildings in these areas attracting global corporates at attractive rental levels. Given the scarce supply of new or refurbished stock in these locations, and demand focussed on sustainable, mixed-use buildings near public transport, we forecast a space shortfall of 6.5 million sq ft over the next four years.”
Key stats at a glance
- Office submarkets, including Farringdon (46%), Bond Street (37%) and Liverpool Street (37%), record above-market rental growth
- Annual take up across all office districts has averaged 6.3 million sq ft since 2013, 13% above the long-term average, whilst enjoying 6% inflation-adjusted prime rental growth
- 51% of central London office take up in 2023 has been within a 10 minute walk of Elizabeth line stations
- Elizabeth line locations are outperforming on pre-let transactions with 40% of space due for completion by 2026 already leased compared to 30% for the rest of London
- Above average take up surges in Paddington (150%) and Bond Street (65%), driven by financial firms, with a 6.5 million sq ft space shortfall expected across the network over the next four years
- Since the opening of the Elizabeth line, the five-day weekly average for office occupancy levels has risen by 11 percentage points
- Approximately 40% of the 6.4 million sq ft of office space completing along the Elizabeth line between now and 2026 has already been pre-let, 10% above the London average, driven by companies committing to new corporate headquarters.