When it comes to the planned redevelopment of its flagship store on London’s Oxford Street, Marks & Spencer is not taking Michael Gove’s intervention lying down.
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?”
I was reminded of his views a few years later 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 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, the Park House scheme made halting progress. The street level retail units let with ease, but by 2015 – 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. When I did, I found myself facing a large Primark store. Reporting back to the agent, she laughed: “It’s not quite the brand association you might 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 pre-let of all 242,000 sq ft of offices at Great Portfland Estates’ Rathbone Square development at the east end of the street.
The scheme was 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 attitudes do play a part. We specialise in evaluating every UK location in terms of hard economic and demographic data. However, we also acknowledge that perceptions will always play a part, especially in major multi-layered cities like London.
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” as landlords sought to mitigate business rates liabilities – the street is now looking ahead to better times. IKEA is opening in the old TopShop on Oxford Circus and HMV is coming back to re-occupy its flagship 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’ project is 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. It’ll be fascinating to see how they fare and how M&S move forward after Gove’s rebuff. Meanwhile, the jury is still out regarding Oxford Street’s attraction as an office location.
Who knows; one day, M&S may feel more sanguine about this setback…
