Bustling and brimming with people. Buzzing with ideas, burning with ambition. This is the central London I have always known and loved for over 30 years. Never would I imagine it being anything else, nor would I contemplate it being the weakest link of the UK economy. Nothing would worry me about its prospects.
Yet this is upon us, with a vengeance. Central train stations are cavernous in their emptiness, as commuters find not only a seat but whole trains to themselves. Bus stops are deserted, tubes are quiet. The City, Holborn, the West End, Victoria, Westminster are all shadows of the past. Sandwich bars are silent, coffee shops are closed, and wine bars are washed out. Restaurants are rotting, nail bars have been nobbled and office buildings look obsolete. People, where are the people?
They say that past performance is no guide to the future in the world of investing, but we have always taken it for granted that London leads and the rest of the country follows. But what if London has hit the buffers in top gear and someone has put the gearstick into sharp reverse? The rest of the country has effectively been out of lockdown for many weeks now, only the government and media are still obsessing with it. Regional cities, towns large and small, are noisy and active again, but not London.
Speaking to lots of London office-based workers, and the tales have the same tune. We are not returning until October, or the New Year. We have let the office lease go, and are all staying at home. We are planning to hot desk in co-working centres next year.
It hit me like a thunder bolt this week as I strolled the ghostly streets. Tourists will not return this year, nor will international bankers, overseas students, nor general visitors. Smart hotels are not planning to reopen soon, nor many restaurants. The effect of this has not really hit the news nor peoples’ consciousness. Pret reopened shops then shut them again at weekends, only being open for a few hours each weekday, whilst closing others for good.
Footfall, where is the footfall? Without it, there will be a structural change to transport and all the shops, bars and cafes around these busy hubs.
Undoubtedly, central London faces an eery, bleak winter ahead, particularly the property market. Residential is swamped with flats and houses to sell and let. Rents in central areas have fallen 20-30 per cent in 3 months with further falls likely if people don’t return in September.
Lots of people who left London at the start of lockdown have decided not to return, given up their leases and may just come in 2 days a week. Office rents face a dramatic slump as demand disappears; they could fall by 30 per cent or more. Many lesser office buildings will be converted to residential despite the oversupply of flats.
Retail will struggle more than ever, rents will slide even further until most are turnover based. Values will fall, with some distressed owners being forced to sell. Not a pretty picture. Forests of cranes will disappear.
Into this storm, London needs a proactive, business-minded approach from its elected Mayor and team. Selfies, soft policing and blaming the Government is not a recovery strategy.
London, and the country, needs you to rise to the challenge Sadiq, urgently. We need you to shout from the rooftops for business to come back to the office.
Scream from the spires to reopen museums, theatres and attractions. Sing for the tourists to return. Signal that all public transport will be free for 6 months. Martin Luther King had a dream; we need Sadiq to sell his London dream to the world. Now.