Understanding the value of London's built environment

By Kat Hanna, Co-Managing Director for London, Avison Young; Chair, NLA NextGen Committee

When asked about the value of London’s built environment, we are often presented with graphs and tables charting pounds per square foot, house price trends, articles celebrating the number of jobs created by the sector or the total number of new trees planted by development managers in PPE. While these things are important in their own way, if we really want to understand how London’s built environment can contribute to the economic, social and environmental challenges the capital faces, we need to go back to basics.

What is London’s Built Environment?

London’s built environment is first and foremost the residential, commercial, industrial, civic and cultural buildings that constitute our city. It is also the spaces between these buildings, and the infrastructure that supports them, from transport hubs like Waterloo and Euston, main roads to City of London alleyways, and the subterranean soup of tube tunnels, sewage pipelines and utilities infrastructure. Even our green and blue spaces blur the lines between natural and built environment – from the historic Royal Parks to London’s Olympic Park, the banks of the Thames to the city’s canals.

Typically, built environments are defined both by the fact that they are human-made and designed for the purpose of human activity – live, work and play – to deploy the trinity so loved by many of today’s real estate developers. 

Understanding the value of London’s Built Environment

Even within the narrow definition of ‘supporting human activity’, we have more datapoints than ever when it comes to measuring – albeit not necessarily understanding – how Londoners use the capital’s built environment, from square foot of employment space to footfall and visitor spend. What this tells us about value, however, is less straightforward. 

As any good Londoner will know, our attachment to much of the city’s built environment, especially its heritage and culture buildings, is not defined by the frequency of our visits. We simply just like to know they still exist and that they will continue to do so in the future. For some, the privilege of living in a city like London is that much of the time, London’s built environment is the constant yet constantly changing backdrop to our everyday lives. 

London’s status as a global city, and its concentration of finance-related employment means that, for some parts of London’s built environment, value is as much derived from its role as shelter for capital and an option on the future, than it is as shelter for a human being. When concentrated in certain neighbourhoods, this notion of housing as shelter for capital rather than people changes both the value of London’s built environment and who London is for. This is not a moral judgment, but an observation on just how complex the value of London’s built environment is, whether defined in terms of heritage and history, aesthetics and architecture, capital accumulation and commerce. Nor are all these different types of data and measures of value neatly compatible. They do not simply layer on top of one another like some sort of cake. More often than we care to admit, some of these types of value are at odds with one another. This is, as Greg Clark notes, a negotiated city.

London is not, of course, unique in its complexity, although its standing as a global gateway city does set it apart from competitors when it comes to the value of its built environment from the viewpoint of international investors. The increasing volume, velocity, variety of capital, data, goods and people that flow in and out of London, alongside the physical impact of its built environment, particularly on carbon, means that harnessing this mass of existing and potential value is fundamental to addressing the challenges that the city faces. Often labelled as ‘ESG’, these challenges range from the economic (dwindling productivity, uneven wealth distribution) to the social (homelessness, poor mental and physical health outcomes) and environmental (air quality and the adverse effects of climate change).

We must first begin with understanding the role of the built environment in shaping them. Confronting and unpicking this is difficult and at times uncomfortable, for politicians, commentators and built environment professionals. It is much easier to focus on the aesthetic value, or lack thereof, of London’s built environment. It is telling that many of us involved in the built environment have been more animated by Thomas Heatherwick’s campaign against a ‘blandemic’ of boring buildings than we have by the actual pandemic and unsafe buildings.

Why does this matter?

We can criticise ‘ugly’ new blocks of flats and lament poorly maintained public realm, or empty shop units all day long, and we probably should continue to do so. Doing so, however, is to point out the symptoms of where values – in both monetary and moral sense – have become misaligned, or in many instances, were way out of whack in the first place. 

We cannot hope to harness the value of London’s built environment if we focus only on its most tangible manifestations. It is not just the physical ‘built environment’ that influences our everyday lives and the future of London. It is the people, the power, policies and politics behind it: investors, developers, landlords, asset managers, planners, urban designers, architects and the cadre of consultants that surrounds each of these groups. City-shaping is a collective act, albeit one that is messy, complex and frequently uncoordinated. To ignore this is at once unwise, naïve and ingenuous, particularly at a time when solving the challenges that London faces, requires identifying and aligning the interests of so many of these parties.

Providing clarity on what the built environment can achieve is so important. This means being honest that we should not expect the actors most obviously responsible for London’s most recent and future built environment to ‘fix’ all that ails the capital city. It also means being honest about the role that the people, power and politics that comprise London’s built environment can play and how positive change can really be achieved.

Saints, Sinners and Enlightened Developers

Just as London’s physical built environment is a diverse and eclectic mix of character, so too is the built environment in its less tangible form. Not all actors have the same ability or appetite to forge partnerships and movements to achieve the London Plan goal of a more prosperous, equitable and sustainable city (although they would probably agree on the first point).

The ‘good-hearted’ will do so because they care. The enlightened will do so because they can, and because they have made the judgment that on balance, there is commercial sense in doing more than the bare minimum. Some will simply not engage in what it takes to address London’s challenges – it is not their role, and it is not what the organisation or money is set up to do. Realising positive change therefore requires a number of different approaches, many of which are set out in this Agenda.

Firstly, we can communicate why people should care about the built environment and why the built environment should care about people. We can celebrate those who go above and beyond to ensure their projects have the best possible impact on people and planet, whether it’s in providing generous, inclusive and accessible public realm, or working with existing communities to create opportunities for training and employment. 

Second, we can identify and amplify what I call the ‘enlightened’ actors within the built environment. By this, I mean those finding a way to align the commercial realities of real estate development with the focus on net zero, social value and design outcomes. Identifying the ‘who’ is important here, but if we are to really harness the power of the built environment, we collectively need to become more comfortable with talking about the ‘how’. High quality public realm is not maintained by magic – it is the result of decisions and negotiations about design, engineering, service charges, estate management and so on. Delivering good design and meeting the ESG agenda is not ‘fluff’ – it is often technical, detailed and occasionally a bit dull. 

Setting strategies and goals to harness the value of the built environment will not move the dial if they do not encourage, enable or compel those responsible for our built environment to change how they allocate their resources, especially when it comes to capital, but also physical and intellectual. Everything else is just window-dressing at worst, and wishful thinking at best.

What then of the third group of actors responsible for London’s built environment who take no interest or concern for anything beyond short-term commercial outcomes, who either see no reason to take design, environmental and social outcomes into account, or who cannot align the former with the latter? In a city as large as London, not everyone is going to get on board. However, if certain outcomes, decisions and behaviours of the built environment really are ‘must-haves’ in addressing the economic, social and environmental challenges our city faces, then we may need to create or accept legislation that means they happen. Similarly, if there are outcomes, decisions and behaviours taking place at sufficient scale and impact that prevent us from addressing these challenges, we may need to legislate for that too. 

The built environment industry has a huge opportunity to support London’s transition to a more prosperous, equitable and sustainable city. But we will need to work collaboratively, openly and honestly, using all those tools at our disposal, if we are to deliver true value back to the city.

* This article was initially published as an introductory essay to the New London Agenda.

  • Co-Managing Director, London
  • Director of Strategic Advisory