Has Covid killed the skyscraper? A more hybrid London beckons

The last thing London must need when it struggles from lockdown is a new 62-storey skyscraper looming over the heart of the City. That is what it has got at 22 Bishopsgate, complete with 60 lifts and space for 12,000 office-bound workers. Unlike other towers, its vastness is so bland no one has thought of a name for it, though I did see “The Wodge” the other day. It comes on stream along with 15 million more square feet of offices — equivalent of 30 Gherkins — planned at the height of the recent boom. Their only welcome is from photographers picturing waste paper blowing down empty City streets.

London property has always progressed by boom and bust but this year’s bust looks unprecedented. Take-up of new office space is reportedly the lowest on record. The accountants Deloittes are predicting a fall of 15 per cent in demand and surveys suggest that after lockdown 70 per cent of workers will be seeking a four-day office week or less. That would mean a fifth fewer offices. The only post-Christmas decorations just now are to-let signs everywhere.  

The truth is that no one knows what is about to happen to London property, but the most common prediction is that the skyscraper is dead. Even the first most famous one, Centre Point, stands half empty after its converted flats failed to sell. Why Mayor Sadiq Khan approved the 22 Bishopsgate monster two years ago is a mystery. Like Boris Johnson’s beloved Battersea development, demand for these buildings was way past its peak. Khan might at least have pondered how many new houses he could have had for 62 storeys of surplus skyscraper.  

Busts are never all bad. After the Plague and Great Fire of London in 1666 it was estimated that a third of the houses rebuilt in the City were still not occupied six years later. Thousands of Londoners had moved out to Westminster and the suburbs — much as estimates are that 300,000 may being moving out now. But the houses were eventually occupied for new uses, as banks and shipping merchants. Likewise after the Blitz factories and warehouses vanished but office blocks took over. Cities change.

London’s returning workers of 2021 will at least get lower prices. The rental crisis appears to be dissolving. Zoopla recently recorded a Baker Street flat down from £4,312 a month in May to £2,600 in November, and a Bethnal Green house down from £3,000 to £2,200. This is significant as house prices elsewhere in the South-East are still rising. Since office rents are certain to plummet — aided by some Brexit exodus to Europe — living and doing business in London could be getting a whole lot cheaper.  

However, what the property supplements are preaching is a change in the nature of “office business”. The mystique of the 9-5 day five days a week may be over. Workers really will be calculating where they need to be behind their screens. They will want a “wellness environment” in smaller adaptable buildings. They will like pavements and open spaces, working in cafes and pubs, caring about where to be at lunch and after work. It is what sociologists call the “hybrid city”.