It takes a particular kind of occupier to sign up to a new development, but it’s a bold move that can really pay off.
As the first organisations are poised to sign leases in the emerging Canada Water business district, we asked leading agents Richard Howard, Executive Director at CBRE, and Alistair Brown, Head of UK Leasing at Cushman & Wakefield about the benefits of being a pioneer in a new business district.
Being one of the first businesses to move to a new location isn’t for everyone, explains Howard. “The ideal partner must be a business that embraces the benefits of being outside its comfort zone. This is a rare, strategic opportunity for a brand to become a market pioneer, establishing a unique footprint instead of conforming to industry norms. It represents the perfect platform for fundamental, large-scale brand reinvention.”
Moving to an evolving location like Canada Water means being part of a story, like the redevelopment of London’s King’s Cross, says Brown. “It’s that kind of level of activity that we’re seeing in Canada Water, activating the whole area, creating a campus. If you’re a big company, you’ll be a major player, helping to define a really interesting story in the medium to longer term.”
“If you’re a big firm which is dynamically growing, then one of the issues around a constrained campus is that there’s very little opportunity to scale if you want to grow,” explains Howard. “But at a location like Canada Water, you might take 100,000 square feet in one of these buildings then pause as the rest of the building gets let around you, but because British Land also has such a huge pipeline here, there will always be space available for you to grow your business in the area, making it easier to avoid the cost and upheaval of a wholesale move.”
An emerging location like Canada Water offers excellent return on investment in terms of value, as well as being more affordable operationally, says Brown. “The rents at developed locations can start out at half of what they become once the area is established. Occupiers who get in early have the opportunity to benefit from that first mover advantage, from a brand point of view, but also from a cost point of view. And there is now the opportunity for occupiers to be there at the start of Canada Water, and that opportunity is not going to be there forever.”
Just one anchor signing can dramatically transform an area. “British Land has finished Dock Shed and, if market chatter is right, they are about to welcome their first tenants,” says Howard. “This means a theoretical story has quickly become reality. The similarity here to King’s Cross is profound: King’s Cross hit an inflection point when the market finally understood the sheer scale of the project and believed it could be delivered. For Canada Water, that time is right now.”