Marks & Spencer is not taking Michael Gove’s intervention in the planned redevelopment of its flagship store on London’s Oxford Street lying down. But ultimately, in a location which has a chequered history of office development, a rethink of its plans may be a blessing in disguise.
Many years ago, I was having lunch with a London office agent who mentioned in passing that he’d just been appointed on a new office development on Oxford Street.
My words of congratulation were met with a roll of the eyes and the explanation that ‘no one really wants an office on Oxford Street’. His take was that neither occupiers – nor their visitors – relished the process of ploughing through a sea of shoppers and tourists to get in and out of an office. “It doesn’t scream quality does it?”, was his withering verdict.
I was reminded of his views in 2013 when a group of Qatari investors led by Amanda Staveley took over the Park House development at the west end of Oxford Street. Ironically, given more recent events, the scheme was built across the road from the M&S flagship store, and when unveiled was trumpeted as the ‘largest office development in Mayfair for a decade’.
Leaving aside for a moment the question as to whether Oxford Street can ever really feel like part of Mayfair (perhaps tellingly Landsec had happily sold the scheme out to Staveley and her partners), the Park House development made halting progress. The street level retail units let with ease, but two years after completion only around 15% of the 165,000 sq ft office component had been let.
At that time, I asked an agent why this was and was told to go to the new building’s entrance and then turn around. I did this and found myself facing a large Primark store. When I later reported back to the agent, she laughed and said: “It’s not quite the brand association you want when emerging from your pricey West End office, is it?”.
At pretty much the same time as Park House continued its search for tenants, Facebook signed up for a prelet of all 242,000 sq ft of offices at Great Portland Estates’ Rathbone Square development at the east end of Oxford Street.
That scheme created the first new London square for a century but its configuration showed no desire to connect with Oxford Street. Greeting the news of the Facebook letting, West End office experts nodded and commented: “Well, it’s close to Oxford Street but it’s not on it is it?”.
As is so often the case with a property’s location, a miss is as good as a mile and prevailing attitudes play a part. We specialise in evaluating every UK location in terms of hard economic and demographic data, but also acknowledge that – especially in multi-layered cities like London – perceptions will always influence occupier attitudes.
Oxford Street is clearly a great retail environment that is in transition. After the trauma of many store closures and the arrival of multiple ‘American candy stores’, the street is now looking ahead to better times with IKEA opening in the old TopShop on Oxford Circus and HMV coming back to re-occupy its flgaship store next to Bond Street station. Meanwhile, Westminster City Council has just unveiled plans to revamp the street by reducing traffic and increasing space for pedestrians.
And, of course, just west of Oxford Circus, John Lewis is also progressing a major redevelopment of its store to create more than 300,000 sq ft of offices. Presumably, along with their partners – Hines and Korea’s National Pension Services – JLP won’t be too sad if M&S’s project is delayed or ultimately out of the picture.
But if both do eventually go-ahead, they have the ability to help tilt Oxford Street away from its predominant shopping mono-culture. In the meantime, M&S has taken up legal cudgels to challenge Gove’s rebuff, and the jury remains out regarding Oxford Street’s attraction as an office location.
Who knows: one day, M&S may feel more sanguine about this setback and the thinking time it provides…
This viewpoint first appeared in the Autumn issue of Property Chronicle