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					Study of Small Business Workspace Provision in Hackney




                         ANCER SPA
                     DEVELOPMENT, REGENERATION
                       & PLANNING CONSULTANTS




               Study of Small Business Workspace
                      Provision in Hackney

                               Final Report

                               Prepared for


                       London Borough of Hackney


                                   By


                 ANCER SPA (London and South East) Ltd




                             September 2006




Final Report                        1
ANCER SPA
Study of Small Business Workspace Provision in Hackney



                                     CONTENTS

                                                                           PAGE
                                                                             NO.
       EXECUTIVE SUMMARY                                                       5

1      INTRODUCTION                                                           13

1.1    Scope and Purpose of Study                                             13

2      APPROACH AND METHOD                                                    14

2.1    Establishing Definitions                                               14
2.2    Assessment of Demand for Small and Medium Sized Business Units         14
2.3    Assessment of the Supply of Small and Medium Sized Business Units      14
2.4    Factors Affecting the Price of Small Business Workspace                14
2.5    Development of Strategic Model                                         15
2.6    Identification of Mismatches Between Supply and Demand                 15
2.7    Identification of Required Interventions                               15


3.     ECONOMIC STRUCTURE AND TRENDS                                          16

3.1    Sectoral Structure                                                     16
3.2    Trends in Hackney’s Small Business Sector                              17
3.3    Business Start Up Rates                                                20
3.4    Space Occupancy and Relocation Expectations of Hackney                 20
       Businesses
3.5    Projected Changes in Employment                                        21
3.6    Conclusions on Business and Employment Trends                          22

4.     FACTORS AFFECTING DEMAND FOR SMALL BUSINESS WORKSPACE                  23

4.1    Overview                                                               23
4.2    Demand Patterns by Location                                            23
4.3    Demand from Outside Hackney                                            24
4.4    Accommodation in Short Supply                                          24
4.5    Development Potential                                                  25
4.6    Invest in Hackney Enquiry Data                                         25
4.7    Findings from Managed Workspace Operators                              28
4.8    Summary of Demand by Workspace Typology                                29
4.9    Areas of Unfulfilled Demand                                            31
4.10   Findings from Recent Strategic Studies                                 32
4.11   Conclusions on Workspace Demand                                        33

5      FACTORS AFFECTING SUPPLY OF SMALL BUSINESS WORKSPACE                   34

5.1    Overview                                                               34
5.2    Managed Workspace and Business Incubators                              34
5.3    Live-work Units                                                        37
5.4    General Commercial Workspace                                           38
5.5    Supply of New Small Business Workspace                                 44
5.6    Quality of Workspace                                                   46
5.7    Council Policies Affecting Workspace Supply                            51
5.8    Planning Policies Related to B1 Re-provision                           52
5.9    Workspace Development Economics                                        53
5.10   Development Practices                                                  54
5.11   Conclusions on Factors Affecting Supply                                55

6      PRICE AND AFFORDABILITY OF WORKSPACE                                   57

6.1    Current Rental Levels and Freehold Sales Prices                        57
6.2    Affordability Levels                                                   58
6.3    Minimum Development Costs                                              59

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7      STRATEGIC DEMAND AND SUPPLY MODEL                                     61

7.1    Overview                                                              61
7.2    Basis of the Model                                                    61
7.3    Overall Demand Assessment                                             65
7.4    Overall Demand by Size of Unit                                        68
7.5    Assessment of Demand by Sub-Areas                                     70
7.6    Floor space Availability                                              72
7.7    Guidelines for Maintenance and Updates of the Model                   72

8      AREAS OF MISMATCH IN SUPPLY AND DEMAND                                73

8.1    Overall Comparison of Floorspace Supply and Demand                     73
8.2    Analysis of the Strategic Model: Matches and Mismatches by Size and    77
       Availability of Unit
8.3    Area Based Analysis                                                   77

9      FACTORS AFFECTING FUTURE WORKSPACE PROVISION                          79

9.1    Sources of Workspace Demand                                            79
9.2    Evidence of Market Failure                                             80

10     OPTIONS FOR ADDRESSING DEFICIENCIES IN SMALL BUSINESS                  82
       WORKSPACE

10.1   Intervention Options                                                  82
10.2   Sector Based Approaches                                               83
10.3   Marshalling Demand and Orchestrating Supply                           84
10.4   Working with Deliverers                                               85
10.5   Area Based Strategies                                                 85

11     SCOPE OF PROPOSED INTERVENTIONS                                       87

11.1   On-Site Interventions                                                  87
11.2   Off-Site Interventions                                                 91
11.3   Merits of Alternative Interventions                                    92
11.4   Establishing Coordination Capacity within the Borough Council          99
11.5   Development Coordination Functions                                     99
11.6   The Case for Establishment of a Development Trust                     100

12     Conclusions                                                           103

12.1   Key Findings                                                          103
12.2   Recommendations                                                       103

       APPENDICES

1      Map                                                                   106
2      Case Studies of Mixed Use Planning Applications                       109
3      Development Economics of Hornes House                                 128
4      Strategic Model                                                       131
5      Analysis of Floorspace Supply, Demand and Excess/Shortfall by Area    138




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                                          List of Tables

Table                                           Title                                     Page No
Table 3.1    Trends in Micro and Small Business Structure and Employment, 1999-2004*           18
Table 3.2    Forecast Employment Levels Changes in Hackney (2001 –2016)                        21
Table 3.3    Forecast Employment % Growth Rates in Hackney (2001 – 2016)                       21
Table 4.1    Current Enquiries for B Class Uses by Sector and Use Received by Invest in        26
             Hackney, Dec 2005 – Feb 2006
             Sqft
Table 4.2    Summary of Enquiries Received by Invest in Hackney by Use Class                   26
Table 4.3    Summary of Enquiries Received by Invest in Hackney by Size and Use Class          27
Table 4.4    Profile Of Demand By Workspace Typology                                           29
Table 4.5    Profile of Properties Subject to Unfulfilled Demand in Hackney                    31
Table 5.1    Profile of Managed Workspace and Incubator Schemes Identified in the              34
             Hackney Area, March 2006
Table 5.2    Snapshot of Small Business Workspace Supply, Hackney Borough, February            40
             2006
Table 5.3    Locations of Sample of Planning Applications                                      44
Table 5.4    Total floorspace by LAD and Age for Each Bulk Class                               48
Table 5.5    Local Authorities with Highest Vacancy Rates in 2003/2004                         49
Table 6.1    Examples of Asking Prices and Rents for New Build Workspace Units                 56
             In Hackney Sub-Areas
Table 6.2    Indicative Asking Rental Levels for Workspace Across Hackney Sub-Areas            57
             £/sq ft
Table 6.3    Indicative Freehold Sales Prices for Workspace Across Hackney Sub-Areas           57
             £/sq ft
Table 6.4    Costs of alternative development options                                          58
Table 7.1    Projected Net Floorspace Demand Growth                                            61
Table 7.2    Assumptions on Take Up Rates By Type and Use By Sector                            62
Table 7.3    Locational Preferences of Hackney Businesses                                      62
Table 7.4    Projection of Annual Floorspace Requirements by Sector                            65
Table 7.5    Projected Net Floorspace Demand Growth by Sector and Use Class                    66
             (Annual Average 2006-2016)
Table 7.6    Assumptions on Floorspace Demand by Size                                          67
Table 7.7    Projected Net Floorspace Demand Growth by Sector, Use and Floorspace              68
             Size
             (Annual Average 2006-2016)
Table 7.8    B Class User Business Units Sector and Area                                       70
             Hackney Borough, 2006
Table 7.9    Projected Annual Floorspace Demand by Sector and Area                             71
             Hackney Borough
Table 8.1    Overall Comparison of Projected Annual Floorspace Supply and Demand in            72
             Hackney

Table 11.1   Guidelines on Alternative Interventions                                           93




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Study of Small Business Workspace Provision in Hackney


EXECUTIVE SUMMARY

1.     Purpose of the Study
The Study of Small Business Workspace Provision in Hackney was commissioned to
provide an evidence base concerning the demand and supply of B used class
workspace for small and medium sized businesses within Hackney, which could
support the production of the borough’s local development scheme and related core
policies and area action plans. Its purpose is also to assist with the assessment of
individual planning applications and to support the council at public enquiries.

This is especially critical in Hackney which is a Borough characterised by a sizeable
and highly dynamic creative sector, a high proportion of ethnic groups with
entrepreneurial interests and the need to balance the area’s role in consolidating its
‘City of London’ function with that of maintaining and enhancing the competitiveness
of the small business sector.

Accordingly, key requirements set out in the brief were as follows.

     To develop coherent definitions of small and medium size businesses and
     workspace in the Hackney context.

     To evaluate/profile the current demand and supply for small and medium size
     business units in Hackney.

     To develop a thorough understanding of the price (freehold and leasehold) of
     current small and medium size workspace in the Borough.

     To identify the offer/price (freehold and leasehold) at which developers are
     willing/able to provide small and medium size business workspace

     To create an interactive model or matrix with weightings assigned to each factor

     To assess where there are significant disparities between supply viability and
     business demand.

Following this the requirement was to explore and make recommendations on what
interventions are available to increase the availability and accessibility of space to
target new and existing small and medium sized businesses. This would need to
address both on site and off site interventions.

To address these needs, the final requirement of the study was to develop a range of
options as to how planning contributions for off site employment projects should be
managed.

2.     Recent Economic Trends
The number of jobs in Hackney grew by 29% to 90,600 between 1996 and 2002
significantly outgrowing employment growth elsewhere in East London, Greater
London and the rest of the country.

       Hackney is rapidly evolving into a favoured location for professional and other
       business services, particularly within the micro-business sector.

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       The creative industries generally are an important sector, highly concentrated
       in South Shoreditch but with a presence across many other parts of the
       borough.

       Other services have become a significant area of job growth again more
       markedly in the micro sector.

       Micro-business distribution activities have generated large numbers of new
       jobs whereas in the small (11-49) sector, the level of activity is declining.

       Small manufacturers (11-49) are tending to close whereas many of those in
       the micro-business sector appear to be consolidating. It is likely that the
       micro-business manufacturers include a number of start-ups in the designer
       maker industries including fashion, furniture and ceramics.

       The transport, communication and storage sector is becoming increasingly
       prominent in the small business sector.

Hackney demonstrates a relatively strong entrepreneurial culture which in part
reflects the diverse ethnic mix of the local population.

Of the businesses that are considering relocation over the next 5 years, (34% of all
businesses), 76% are expecting to leave Hackney. A quarter of the Borough’s
businesses are therefore at risk.

3.     Patterns of Small Business Workspace Demand
The area of greatest demand and take up is South Shoreditch. Typical requirements
are for offices or studios of mainly between 500 – 1,000 sq. ft (46 – 93 sq m) or from
1,001 – 2,000 sq ft (93 – 186 sq m) principally for media, design and business
services and some fashion, with 3,000 sq ft (279 sq m) being the typical upper limit.
Most require managed workspace or serviced offices on flexible terms.

The main area of unfulfilled demand appears to arise from these businesses seeking
serviced B1 accommodation of below 1,000 sq ft (93 sq m). One agent reported
some 80 – 100 current requirements for this type of property in Shoreditch, which
cannot be met.

There is some movement northward from the South Shoreditch area and small
clusters of creative industries are emerging in Dalston and Hackney Central.

There is very limited demand experienced by agents elsewhere in Hackney due to
poor public transport, particularly underground connections; limited facilities for staff
and the generally unappealing nature of these areas. (See map of employment
areas, Appendix 1).

4.     Factors Affecting the Supply of Small Business
       Workspace
4.1    Managed Workspace

Managed workspace is a key element in the spectrum of workspace available to
small and medium enterprises. It provides the sort of premises that new businesses
want, on terms which meet their needs and with the support services that help to
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secure their continuing success and at a price they can afford. They may also
provide core activities such as shared office services, equipment, security and
possibly some business support and advice. Managed workspace schemes in the
Borough offering units of under 500 sq ft (46 sq m) have been successful and have
let well.

4.2    Live Work

Whilst there is a continuing role for live-work, it is in reality suitable for very well
established and successful businesses who can afford to purchase premises at the
prices developers demand.

4.3    General Commercial Space

Some 900,000 sq ft (83,635 sq m) of workspace is currently available, of which some
just under 620,000 sq ft (57,615 sq m) is available in the South Shoreditch area.

South Shoreditch has just under 380,000 sq ft (35,312 sq m) of office space, 140,000
sq ft (13,010 sq m) studio space and 100,000 sq ft (9,293 sq m) of industrial space
available. In comparison, there is very limited availability of units under 1,000 sq ft
(93 sq m) (about 20,000 sq ft – 1,858 sq m) reflecting strong demand evidence in this
size range. It is also notable that there is very limited new office space, although
some 70% is second-hand stock refurbished to a reasonable standard.

Hackney Wick, Hackney Central and Kingsland Basin/Kingsland Road account for
the other main concentrations of available floorspace, each accounting for between
65-90,000 sq ft (6,040 – 8,363 sq m) available in each of these areas. Hackney Wick
also contains significant amounts of vacant land. There is a copious amount of
second-hand office space and of vacant industrial units.

4.4    Mixed Use Developments

The majority of proposals for mixed use development are concentrated in South
Shoreditch although a significant number are in locations outside the main
employment areas. Whilst demand is strong in South Shoreditch, in the opinion of
developers, too much space is being built in the wrong locations.

The sizes of units available in many of these schemes are generally suitable for
occupation by SMEs. Those that are not, are large floor spaces that have not been
subdivided.

Many of the mixed use developments included in the review of planning applications
have vacant units. Hackney has the second highest vacancy rate in commercial and
industry property in the country. However, not all of this is currently available and on
the market.

4.5    Affordability

Rents affordable by cost sensitive business activities would normally fall within a
range of between £7 and £12 per sq ft. This would indicate that in areas within the
borough outside South Shoreditch, asking rents are, in fact affordable. However for
cost sensitive businesses seeking a base in Shoreditch or Hoxton, this indicates a
sharp difference between affordability and price.


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5.           Projections of Future Workspace Demand and Supply
A strategic model has been constructed as part of the study for projecting future
demand for small business workspace, set against projected supply. Broken down by
use, this indicates the following net annual requirements.

              Offices                                     574,906                        52.87%
              Studios                                     279,769                        25.73%
              Light Industrial                           123,,792                           11%
              General Industrial                             1829                         0.17%
              Warehouse Storage                           107,153                         9.85%
              Total Sq ft                               1,087,449                          100%
              Total Sq m                                  101,055                          100%


The overall profile of supply set against projected demand is set out in Table 8.1.



         Overall Comparison of Floorspace Supply and Demand in Hackney
                                      Sqft
                                                                            B1c      B2       B8
                                                                            Light General Warehou
                                          B1a                     B1b       Industri Industri sing and
Use                                       Offices                 Studio    al       al*      Storage Total
Estimated Annual Supply


1-500 sqft                                               11056       4503       399       0      4190     20148
501 - 1000 sqft                                          20707      14453      7202       0         0     42362
1001 - 2000 sqft                                        151484      70470     68140       0         0    290094
2001 - 3000 sqft                                         73747      42459     47293       0         0    163500
3001 - 4000 sqft                                        101500      16596     43782       0         0    161878
4001 - 5000 sqft                                         65723      24565     52844       0         0    143132
5001-10,000 sqft                                        140690      33793     82880       0         0    257363
10-15,000 sqft                                           29835 32022 79656                0         0    141513
TOTAL                                                   594743 238861 382197              0      4190   1219990

Projected Demand (including exceptional
demand for South Shoreditch)
1-500 sqft                                               85693      67923     17669     110      7587    178982
501 - 1000 sqft                                         134978 108567         27784     164     11445    282938
1001 - 2000 sqft                                         80346      43859     17159     226     13453    155043
2001 - 3000 sqft                                         40636       8816      9077     197     11078     69805
3001 - 4000 sqft                                         28445       6171      6354     138      7755     48863
4001 - 5000 sqft                                         21944       4761      4902     106      5982     37695
5001-10,000 sqft                                         60954      13224     13616     296     16618    104707
10-15,000 sqft                                          121909 26448 27232              591     33235    209415
TOTAL sq ft                                             574906 279769 123792           1829    107153   1087449
Sq m                                                (53424.96)

Excess/Shortfall


1-500 sqft                                               -74637     -63420 -17270      -110     -3397   -158834
501 - 1000 sqft                                         -114271     -94114 -20582      -164    -11445   -240576
1001 - 2000 sqft                                         71138      26611     50981    -226    -13453    135051
2001 - 3000 sqft                                         33111      33643     38216    -197    -11078     93695

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             Overall Comparison of Floorspace Supply and Demand in Hackney
                                          Sqft
                                                                               B1c      B2       B8
                                                                               Light General Warehou
                                               B1a                   B1b       Industri Industri sing and
Use                                            Offices               Studio    al       al*      Storage Total
3001 - 4000 sqft                                             73055     10425     37428    -138     -7755    113015
4001 - 5000 sqft                                             43780     19804     47942    -106     -5982    105437
5001-10,000 sqft                                             79736     20569     69264    -296    -16618    152656
10-15,000 sqft                                                -92074    5575 52425       -591     -33235    -67902
TOTAL                                                          19837 -40907 258405 -1829         -102964    132542
* Agents do not tend to separate out B1 light industries and B2 uses when marketing purposes,
 the same being largely true for B8 uses too.



In broad terms, the above indicates an annual supply of 1,200,000 sq ft (111,514 sq
m) of available space, set against a demand of 1,087,000 sq ft (101,013 sq m) with
an overall excess supply of 132,000 sq ft (12,267 sq m). Within this broad picture of
over supply, there are some major areas of mismatch, particularly for B1 properties
of under 1,000 sq ft (93 sq m) and for B2 and B8 space generally, which are under
supplied.

6.           Evidence of Market Failure
There is clear evidence of market failure in the supply of small business workspace in
Hackney. This evidence is made up of a complex inter-relationship of factors.

      i)        Projections thrown up by the strategic model indicate a shortfall in the
                availability of good quality units below 1,000 sq ft (93 sq m) for offices,
                studios and light industrial across all sub-areas of the borough.

      ii)       Most purpose built small business workspace schemes are over-
                subscribed, where they are in appropriate locations such as South
                Shoreditch and Dalston town centre;

      iii)      New offices and light industrial space are in short supply across the
                borough.

      iv)       Whilst a number of B1 developments have taken place, many as part of
                mixed use schemes, levels of vacancy remain high for five principal
                reasons.

                a) Current price levels are relatively high and above the level many
                   prospective occupiers can afford.

                b) The floorspace areas provided are unlettable because they are too
                   large. In such cases, developers have built out the B1 provision to
                   satisfy the policy requirements but have not sub-divided the units into
                   smaller sizes which match demand.

                c) Some such developments are in predominantly residential areas,
                   some distance away from mainstream commercial centres well-served
                   by public transport and shops in safe, high quality environments.
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             d) Often the quality of space provided in new build does not match the
                demand (i.e. poor quality shell and core).

             e) Developers are not proactively marketing the workspace element of
                mixed use schemes.

     v)      Notwithstanding the under-supply of new and small units across the
             borough, there is considerable over-supply of intermediate sized units (i.e.
             from 2,000-10,000 sq ft) (186 – 929 sq m) in South Shoreditch, the area of
             the borough where demand is greatest. Much of this over-supply has
             scope for adaptation to smaller units and for longer term provision of
             move-on space, but this is likely to require intervention if properties of the
             appropriate small unit size are to be provided. The over-supply should
             also be preserved as this feeds major demand for inward investment into
             the area from media, design and business services companies.

The overall picture is of a property market which is out of balance, with strong
demand for small units at the right price remaining unfulfilled, whilst there is an over-
supply of space which is not let due to it being of the wrong size or location or offered
at too high a price. Taken together there could appear to be a clear case for
intervention in order to address this market failure.

7.        Intervention Options
Given the market failure identified, there is a clear need for intervention to address
the mismatch between demand and supply.

     •    Inward investment demand from business services, design and media
          businesses seeking suitable premises in South Shoreditch is not being met.

     •    Hackney is therefore prone to losing 25% of its businesses over a five-year
          period. The main reasons are due to shortage of space to expand and the
          high costs of space. Intervention could help retain a large proportion of these
          businesses.

     •    There are a number of key growth sectors, such as business services and the
          creative sector businesses whose demand for small workspace cannot be
          met affordably. Intervention could address this need and help consolidate
          Hackney’s latent strengths in these sectors.

     •    Intervention could address over-supply, which is a wasted resource in the
          face of the strength of demand for small business workspace.

There is an opportunity to locate many types of businesses, which are cost-sensitive
into sub-areas of the borough other than South Shoreditch. Intervention could lead
to the right types of space being provided at suitable cost in the right environments
within these sub-areas.




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8.      Recommended Actions
Such intervention needs to be based on a series of focused actions.

     1. Policies should be set in place or maintained to preserve employment uses
        within the areas where demand for business workspace is prominent.

     2. Developers should be encouraged to configure or reconfigure the space
        provided on-site to make it more suitable and appealing to SME occupiers.

     3. In other areas which are characterised by high concentrations of residential
        development, sites which are remote from main employment areas can be
        selectively released from employment uses, provided that contributions
        towards re-provision are made where appropriate. This should be subject to
        preserving sufficient business, industrial and warehousing space to meet
        demand in line with projections from the strategic model and/or more
        localised market intelligence that may emerge in the future

     4. The Council should focus on off-site interventions, whereby financial
        contributions received for loss of employment in one part of the borough can
        be directed towards replacement space in another, provided that a legal basis
        for this can be established. This should be the priority target for funding
        contributions emanating from the Councils SPD Contributions Policy.

     5. A coordination mechanism should, in the first instance be set up within the
        Council. This should comprise two officers responsible for advising on and
        administering the pool development funding from Section 106, specifying the
        scope of up employment growth schemes, particularly those related to
        affordable workspace then coordinating their delivery. Those posts could be
        funded from this pool of financial contributions.

     6. An arms length corporate vehicle, in the form of a development trust should
        be established as the vehicle for acquiring, owning, funding, developing and
        letting properties which meet the demand for small business workspace
        where the private sector is failing to do so.

     7. This vehicle should focus on identifying and acquiring suitable sites and
        buildings, working up suitable development schemes and working with
        appropriate not for profit or private sector deliverers to implement and operate
        these schemes.

     8. Through these two mechanisms, as a priority, workspace schemes should be
        initiated in South Shoreditch to address the identified shortage of small
        business office and studio space there. The key focus needs to be in
        providing good quality space subdivided onto units of up to 500 sq ft and
        between 501 – 1,000 sq ft (47 – 93 sq m).

     9. This should include the development of managed workspace centres, ideally
        of 20 – 25,000 sq ft (1,859 – 2,323 sq m) both to meet the needs of specialist
        sectors and for general users. A supply of general “workspace only” offices
        and studios of between 500 sq ft (46 sq m) and 3,000 sq ft (279 sq m) should
        also be delivered through these mechanisms.


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   10. Such intervention needs to centre around addressing the collective needs of
       individual sectors, particularly the business services, media and design, or
       where this is not appropriate, marshalling the demand from other suitable
       groupings of end users with similarly identified workspace needs.

   11. More managed workspace schemes should then be initiated in Dalston and
       Hackney Central, focusing on the provision of start up units of under 500 sq ft
       (46 sq m) and in the longer term expansion units up to 3000 sq ft (279 sq m).

   12. Policies should be set in place or maintained to preserve employment uses
       within these areas.

   13. In other areas, which are characterised by high concentrations of residential
       development, sites which are remote from main employment areas can be
       selectively released from employment uses, provided that contributions
       towards re-provision are made where appropriate. This should be subject to
       preserving sufficient industrial and warehousing space to meet demand in line
       with projections from the strategic model and/or demand identified from
       localised market intelligence that may emerge in the future.

There is now an opportunity for the Council to take forward these proposals. In so
doing, it can bring about the successful consolidation and growth of a number of
specialist business sectors, unlocking current constraints on their potential
development and leading to greater dynamism, vibrancy and sustainability within the
local economy.




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Study of Small Business Workspace Provision in Hackney


1.     INTRODUCTION

1.1    Scope and Purpose of the Study

The Study of Small Business Workspace Provision in Hackney was commissioned to
provide an evidence base concerning the demand and supply of B used class
workspace for small and medium sized businesses within Hackney, which could
support the production of the borough’s local development scheme and related core
policies and area action plans. Its purpose is also to assist with the assessment of
individual planning applications and to support the council at public enquiries.

The study follows on from the Atkins Employment Growth Options Study, (March
2006), which found that given the central role of small businesses in Hackney and
the prominence of many companies serving local communities, there is a particular
need to assess the suitability and affordability of existing workspace provision relative
to need. In being more proactive in meeting the needs of businesses, it is important
to highlight that future planning and economic development policies must give more
detailed consideration to the type, quality and price of business premises rather than
a simple measure of aggregate floorspace supply relative to the forecast quantum of
demand.

This is especially critical in Hackney which is a Borough characterised by a sizeable
and highly dynamic creative sector, a high proportion of ethnic groups with
entrepreneurial interests and the need to balance the area’s role in consolidating its
‘City of London’ function with that of maintaining and enhancing the competitiveness
of the small business sector.

Accordingly, key requirements set out in the brief were as follows.

      To develop coherent definitions of small and medium size businesses and
      workspace in the Hackney context.

      To evaluate/profile the current demand and supply for small and medium size
      business units in Hackney.

      To develop a thorough understanding of the price (freehold and leasehold) of
      current small and medium size workspace in the Borough.

      To identify the offer/price (freehold and leasehold) at which developers are
      willing/able to provide small and medium size business workspace

      To create an interactive model or matrix with weightings assigned to each factor

      To assess where there are significant disparities between supply viability and
      business demand.

Following this the requirement was to explore and make recommendations on what
interventions are available to increase the availability and accessibility of space to
target new and existing small and medium sized businesses. This would need to
address both on site and off site interventions.

To address these needs, the final requirement of the study was to develop a range of
options and identify a preferred option as to how planning contributions for off site
employment projects should be managed.

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2.     APPROACH AND METHOD

2.1    Establishing Definitions

The definition of SME businesses for the purpose of this study was discussed with
council officers and through mutual agreement this was determined to include micro
businesses (defined here as businesses of 1 to 5 employees) and small businesses
(defined here as businesses of between 6 and 25 employees. This is the basic focus
of this study. In broad terms we have taken workspace units of up to 10,000 sq ft
(929 sq m) as the absolute limit of space/size relevant to this range of small
businesses for B1 uses, (office and light industrial), B2 uses and 15,000 sq ft (1,394
sq m) in the case of B8 users to reflect the requirements of these small businesses.

2.2    Assessment of Demand for Small and Medium Sized Business Units

Current demand evidence has been generated from discussions with a number of
commercial property agents, a review of enquiries received by Invest in Hackney and
interviews with operators of managed workspace. A range of documents have also
been reviewed to gather evidence of the demand for small and micro business
workspace and its relationship to local economic development issues, key sectors
within the borough and related planning policies.

2.3    Assessment of the Supply of Small and Medium Sized Business Units

The supply profile has been developed from the extensive survey of B class property
currently available, drawn from data supplied by Invest in Hackney and from
properties advertised by all commercial property agents active in the Hackney area.

Our approach to supply has, in the light of the requirements of the brief and the
findings of the Employment Growth Options Study, concentrated on the type, size,
quality, location and where possible, the price of the workspace. Our research is
concerned with workspace that has recently been or is currently being developed in
the Borough, whilst also taking account of currently available workspace of all grades
of quality.

In parallel with this, the nature of new build and refurbished workspace supply has
been examined in detail through review of a sample of mixed-use planning
applications submitted over the last seven years. Case studies of these planning
applications were undertaken to explore the take up and success of mixed use
schemes coming forward in the Borough. These have mainly, although not
exclusively, covered proposals for development within Defined Employment Areas.

2.4    Factors Affecting the Price of Small Business Workspace

The study has sought to develop an understanding of sales prices and rents for
business workspace within the borough. This considers on one hand the price at
which each main type of business workspace is available new or second-hand, and
on the other, some understanding of what different type of user of the space can
afford to pay. The study has sought to develop an understanding of the construction
costs of various categories of business workspace. Consideration has also been
given to the factors which can distort prices, such as hope values for residential use.



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2.5      Development of Strategic Model

Forward projections of demand on an annualised basis have been developed from a
review of local economic statistics and business databases together with economic
and survey data and projections from the Atkins Employment Growth Options Study
in order to project an annualised profile of demand by sector, size, use class and
condition of property. The strategic model has been developed by assessing
evidence regarding the propensity of Hackney businesses to relocate within the
Borough, employment growth projections identified within the Atkins Employment
Growth Options Study and reasoned assumptions regarding the demand by sector of
use and quality.

2.6      Identification of Mismatches between Supply and Demand

These two profiles have then been compared in a structured manner to arrive at a
picture of the extent to which supply matches demand, or where there are
mismatches in supply relative to projected requirements. This has led to the
identification of market disparities.

2.7      Identification of Required Interventions

Based on the issues thrown up by these findings, a series of intervention options
have been identified for different geographical areas and appropriate proposals put
forward.

These consider:

-     on-site interventions, i.e. qualitative issues related to physical workspace needs
      (i.e. design specifications etc) and business or operational needs (i.e. technology,
      management etc).

-     off-site interventions, such as potential financial contributions for lost floorspace
      when an appropriate level of useable employment floorspace is not provided on-
      site as part of developments on former employment sites and the options for
      spending / managing the pool of such contributions to support small and medium
      sized business.




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3.     ECONOMIC STRUCTURE AND TRENDS

3.1    Sectoral Structure

The number of jobs in Hackney grew by 29% to 90,600 between 1996 and 2002
significantly outgrowing employment growth elsewhere in East London, Greater
London and the rest of the country.

Key sectors within the local economy are highlighted below.

          Banking, Finance and Business Services

The economy is dominated by banking, finance, insurance and business services
accounting for over a third of total employment and for around 55% of B use class
employment. Within this broad sector, other business activities represents the most
significant employment sub-sector covering such services as professional services,
management consultancy, renting of vehicles and equipment, software consultancy,
repair of office machinery, advertising, industrial cleaning and labour recruitment.
Many of these activities are suited to locations which are cost efficient with good
access to central commercial areas and a labour supply with varied occupational
characteristics. This sub-sector has grown substantially over the last five years and
is likely to remain a major source of growth over the next decade. For this reason
Hackney’s employment sites will continue to be an important base for many of these
service activities.

          Distribution and Hospitality

Distribution hotels and restaurants and transport and communications account for a
quarter of all jobs. Hackney has some 4,000 wholesale trade jobs and warehousing
remains a relatively important activity within the borough. Warehousing has
increased in its use of floorspace and this trend is expected to continue significantly
over the next decade given Hackney’s gateway role and its importance in servicing
other parts of the London economy.

          Manufacturing

In contrast, the proportion of employment in manufacturing dropped from 15% to 7%
between 1991 and 2002. This decline was significantly greater than that for London
as a whole indicating that industrial restructuring is taking place in Hackney
significantly faster than parts of London. There is, therefore, an imperative to facilitate
diversification of the local economy and the creation of new jobs to compensate for
declining sectors. However, the Atkins report highlights the fact that industrial
restructuring in the borough is reaching a mature stage and the extent to which
obsolete manufacturing land transferred to other uses as a result of decline can be
expected to slow in the future. Despite a significant decline in employment levels in
manufacturing between 1991 and 2002, the number of business units in this sector
decreased only marginally. This indicates that small manufacturing/light industrial
activities remain important to the Hackney economy, particularly those of a high-
value nature.

          Creative Industries

Hackney has developed a growing role as a location for the creative industries,
particularly in such activities as advertising, architecture, crafts, leisure software,

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fashion, music and the visual performing arts, publishing, radio and TV and film and
video. This agglomeration is very likely to be related to Hackney’s close proximity to
the concentration of financial services and related commercial activity in the City of
London. In 2003, the sector employed a total of 9,510 people across 1,520
enterprises in Hackney accounting for roughly 10% of employment in the borough
and almost 13% of all businesses. The creative industries are most heavily
concentrated in the southern-most tip of the borough, around South Shoreditch.

3.2     Trends in Hackney’s Small Business Sector

3.2.1   Findings from Atkins Employment Growth Strategy

The Atkins Employment Growth Strategy found that the number of business units in
the employment band 1 – 10 in 2002 was 7995 out of a total of 9050 (88%).

Broken down by size of business, the structure was as follows.

        1-10 employees : 7995

        Just over 800 businesses (9%) employed 11-50 employees.

        190 businesses (2.1%) employed 51-250 employees

        57 employed over 250 (0.6%).

The Atkins study found that the expansion of Hackney’s business base between
1991 and 2002 took place at a rate twice that of employment growth. The number of
businesses in the Borough almost doubled during that period. It indicates the
increasing importance of small enterprises in accommodating employment growth.

Small businesses are over-represented in Hackney relative to Greater London and
the national average, with large firms being less significant to Hackney in relative
terms. The Atkins Business Survey found that most businesses of 1 – 10 employees
have been in the borough for an average of 10 years, but there is a proliferation of
newly established firms, with 43% having been based in the borough from 1 – 5
years.

3.2.2   Recent Trends in Business Structure of Small Businesses

Table 3.1 below sets out more recent trends in Hackney’s business and employment
structure in 1999 and 2004 highlighting key changes during this period.




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                                                         Table 3.1

        Trends in Micro and Small Business Structure and Employment, 1999-2004*

                                                                    Business Units                    Employment
                                                                                 %                                     %
                                                              1999 2004 Change Change 1999           2004       Change Change
1-10 Employees
A : Agriculture, hunting and forestry                              *     *      *                *          *        *          *
B : Fishing                                                        0     0     0                0           0        0       0%
C : Mining and quarrying                                           *     *     *                *           *        *          *
D : Manufacturing                                               921    714   -207   -22.5%   3,191    2,237       -954     -30%
E : Electricity, gas and water supply                              *     *     *         *      *           *        *          *
F : Construction                                                254    229    -25    -9.8%    712       476       -236     -33%
G : Wholesale and retail trade; repair of motor vehicles,
                                                              1,583 1,526     -57    -3.6%   4,483    3,973
motorcycles and personal and household goods                                                                      -510     -11%
H : Hotels and restaurants                                      397 468       71     17.9%   1,603    1,573        -30      -2%
I : Transport, storage and communication                        229 194      -35    -15.3%     749      526       -223     -30%
J : Financial intermediation                                    213 124      -89    -41.8%     724      417       -307     -42%
K : Real estate, renting and business activities              2,511 3,204    693     27.6%   5,819    6,298        479       8%
L : Public administration and defence; compulsory social           *     *     *                *           *        *
security                                                                                 *                                      *
M : Education                                                   139    69    -70    -50.4%   772    328           -444     -58%
N : Health and social work                                      265 309       44     16.6% 1,210 1,448             238      20%
O : Other community, social and personal service activities   1,028 1,206    178     17.3% 2,140 2,477             337      16%
P : Private households with employed persons                      0     0      0               0      0              0       0%
Q : Extra-territorial organisation and bodies                     0     0      0               0      0              0       0%
Total                                                         7,555 8,074    519        4 21,443 19,850          -1,591     -7%


11-49 employees
A : Agriculture, hunting and forestry                             0      0      0                0        0           0
B : Fishing                                                       0      0      0                0        0           0
C : Mining and quarrying                                          0      0      0                0        0           0
D : Manufacturing                                               179     82    -97   -54.2%   3,679    1,717      -1,962   -53.3%
E : Electricity, gas and water supply                              *     *     *         *      *           *        *
F : Construction                                                 27    23      -4   -14.8%    604       472       -132    -21.9%
G : Wholesale and retail trade; repair of motor vehicles,
                                                                138    114    -24   -17.4%   2,766    2,355       -411    -14.9%
motorcycles and personal and household goods
H : Hotels and restaurants                                       61     75     14    23.0%   1,295    1,523        228     17.6%
I : Transport, storage and communication                         24     35     11    45.8%     474      892        418     88.2%
J : Financial intermediation                                     42     30    -12   -28.6%   1,026      635       -391    -38.1%
K : Real estate, renting and business activities                133    178     45    33.8%   2,773    3,704        931     33.6%
L : Public administration and defence; compulsory social           *     *     *                *           *        *
security                                                                                 *                                      *
M : Education                                                    87     68    -19   -21.8% 2,351 1,820            -531    -22.6%
N : Health and social work                                       65     98     33    50.8% 1,308 2,130             822     62.8%
O : Other community, social and personal service activities      30     53     23    76.7%   589 1,266             677    114.9%
P : Private households with employed persons                      0      0      0              0      0              0
Q : Extra-territorial organisation and bodies                     0      0      0              0      0              0
Total                                                           807    773    -34       0 17,494 16,961           -533          1
*Includes all employment
       Source: Annual Business Enquiry


     *Data suppressed

     Some significant differences can be highlighted amongst different sectors and size
     categories.


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Within the grouping of businesses of 1-10 employees, the number of businesses
grew by 519 between 1999 and 2004 from 7555 to 8074. This was made up
principally of a massive increase of 693 of firms in the real estate, renting and
business activities sub-sector (this is a wide ranging sector which includes estate
agencies, renting of goods, computer and related activities, research and
development and other activities such as business management consultancy). There
was also an increase of 178 businesses in community, social and personal service
and activities. This was offset by a reduction of 200 manufacturing businesses, 25 in
construction, 57 in wholesale and retail trade and repairs, 35 in transport and storage
and 89 in financial intermediation.

Within the grouping of business of 11-49 employees, the number of businesses fell
by 34 from 807 to 773 over this period. This included a loss of almost 100
manufacturing businesses and 24 in distribution, and 12 in financial intermediation,
offset by an increase of 45 in other business activities and 23 in other services with
small increases in transport, storage and communication.

3.2.4   Recent Trends in Employment Structure of Small Businesses

During the period 1999-2004 period, the employment structure has followed the
same direction of change for both size categories of businesses.

        The loss of jobs amongst manufacturers was significant with just under 3,000
        jobs being lost within the sector between 1999 and 2004. The loss of jobs in
        the smaller manufacturers was 950, considerably less the 1960 lost amongst
        those in the 11-49 employee category (30% v 53%). This decline has affected
        most sub-sectors, though there are small amounts of growth in design
        oriented trades such as furniture and in office and computing machinery.

        The smaller distribution businesses tend to have employed more people,
        despite the number of such businesses having fallen, whereas job losses in
        the larger category are in line with business closures.

        Transport and communications businesses have increased employment in
        the 11-49 size band by over 400 jobs, though those in the 1-10 category have
        reduced jobs by over 200.

        Financial intermediation firms have experienced job losses in both size
        bands.

        Within real estate, renting and business activities, employment grew by 3000
        jobs in the 1-10 employment size band and 930 in the 11-45-employee
        category, indicating massive growth in the micro-business economy in the
        sector.

        Employment in other services (which includes activities of membership
        organisations not elsewhere classified, recreational, cultural and sporting
        activities and other service activities) grew by 337 and by 1270 in the 1-10
        and 11-49 employee categories respectively. Much of this growth is in the
        sport and recreational sector.




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3.3       Business Start Up Rates

Hackney demonstrates a relatively strong entrepreneurial culture which in part
reflects the diverse ethnic mix of the local population. According to the Atkins
Employment Growth Options Study, there was a relatively high number of VAT
registrations and deregistrations (1020 and 955 respectively in 2002). Net
registrations have averaged out at about 100 per year. This indicates the importance
of economic development policies to capture growth potential from local
entrepreneurial activity, emphasising the need for strong business advice and access
to affordable premises. Hackney also has a rate of self employment which is
marginally higher than the regional and sub-regional average. Hackney Business
Venture are understood to advise about 400-500 prospective business start ups per
year.

3.4       Space Occupancy and Relocation Expectations of Hackney Businesses

The Atkins Business Survey undertaken in August 2004 covered 500 businesses
across the borough according to a representative sample by size and sector. The
business survey highlighted a number of key facts of relevance to future property
demand.

      Those in the 1 – 10 employment size band occupy an average of 202 sq metres
      (2,170 sq ft).

      17% occupy premises dedicated for small and specialist firms and of these 71%
      occupy managed workspace and 24% have serviced accommodation.

      For 65% of businesses surveyed at least some of the workforce lives in
      Hackney, with 31% stating that the majority (over 50%) of their workforce lives
      within the Borough. 62% have customers in central London, around half of all
      businesses have both suppliers and customers in Hackney.

      41% of businesses have plans to expand within the next five years, though this
      varies between sectors.

      68% of those planning to expand would require more floorspace. Of these, 25%
      are planning to expand on site. At least, 67% would need to move to a different
      site.

      In the employment band 1 – 10, on average, 34% of businesses are
      considering relocation within the next five years. Of these:

      -    32% are considering moving elsewhere in Hackney
      -    26% are considering moving to a surrounding area
      -    30% are considering moving to other parts of London and
      -    17% are considering moving outside London.

      The main reasons for considering relocation are lack of space (44%), high rents
      (25%) and high rates (18%).

      9% of all businesses considering relocation will want space for new specialist
      firms, 50% managed workspace, 19% serviced offices 19%, incubators 13%


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       and 6% warehouses. (These findings are, however, based on a very small
       number of responses).

The Atkins Business Survey identified preferences in terms of the type of areas
businesses would like to move to. These findings are set out in Section 7, Table 7.4.

3.5      Projected Changes in Employment

The Atkins Employment Growth Options Study (March 2006), projects employment
changes across the borough between 2001 and 2016. This indicates relatively strong
growth in transport and communications with more moderate growth in banking,
finance and business services and distribution, with substantial falls in construction
and manufacturing. The decline in manufacturing, is however, relatively small in
relation to the overall size of employment within the borough, projected at 3% in each
of the 5 year periods between 2006-11 and 2011-16.

                                             Table 3.2

           Forecast Employment Levels Changes in Hackney (2001 –2016)
Category                2001-2006           2006 –2 011           2011 – 2016           2001 - 2016
Agriculture       and                  -8                    -1                    -1                   -10
fishing (A & B)
Energy and water                      -13                    -5                    -3                    -2
(E)
Manufacturing (D)                   -1179                  -273                  -259                 -1712
Construction (F)                    -1149                  -393                  -274                 -1816
Distribution, hotels
and restaurants
(G & H)
Transport         and               3951                  4164                  5499                  13614
communications (I)
Banking,      finance               1653                  4164                  4545                  10362
and insurance etc (J
& K)
Public                              1127                  1120                  1144                   3392
administration,
education         and
health (L, M, & N)
Other services (O)                  1434                  -948               -2267                    -1780
Total                               6366                  9434              10,196                    25996

                                             Table 3.3

          Forecast Employment % Growth Rates in Hackney (2001 – 2016)
      Category            2001-2006           2006 –2 011           2011 – 2016           2001 - 2016
Agriculture      and              -40.5                  -80                  -7.9                  -4.5
fishing (A & B)
Energy and water                    -46.4                 -35.1                 -34.4                  -9.4
(E)
Manufacturing (D)                   -11.8                  -3.1                  -3.0                  -1.2
Construction (F)                    -42.2                 -24.9                 -23.2                  -7.1
Distribution, hotels                  4.0                  11.2                  11.4                   1.7
and restaurants
(G & H)
Transport        and                51.7                  35.9                  34.9                    7.1
communications (I)
Banking,     finance                 4.9                  11.7                  11.5                    1.8
and insurance etc
(J & K)
Public                               5.7                   5.4                   5.2                    1.1
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                                         Table 3.3

         Forecast Employment % Growth Rates in Hackney (2001 – 2016)
      Category         2001-2006          2006 –2 011      2011 – 2016      2001 - 2016
administration,
education        and
health (L, M, & N)
Other services (O)               31.7              -15.9            -45.3             -3.3
Total                             6.9                9.6              9.4              1.7
Source: Atkins Employment Growth Strategy

3.6     Conclusions on Business and Employment Trends

From these findings a number of conclusions can be drawn:

        Hackney is rapidly evolving into a favoured location for professional and other
        business services, particularly within the micro-business sector.

        The creative industries generally are an important sector, highly concentrated
        in South Shoreditch but with a presence across many other parts of the
        borough.

        Other services have become a significant area of job growth again more
        markedly in the micro sector.

        Micro-business distribution activities have generated large numbers of new
        jobs whereas in the small (11-49) sector, the level of activity is declining.

        Small manufacturers (11-49) are tending to close whereas many of those in
        the micro-business sector appear to be consolidating. It is likely that the
        micro-business manufacturers include a number of start-ups in the designer
        maker industries including fashion, furniture and ceramics.

        The transport, communication and storage sector is becoming increasingly
        prominent in the small business sector.




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4.        FACTORS AFFECTING DEMAND FOR SMALL BUSINESS WORKSPACE

4.1       Overview

This section sets out a qualitative and quantitative assessment of demand. It is
based on anecdotal evidence and broad estimates of demand provided by local
commercial agents, enquiry data provided by Invest in Hackney and anecdotal
information provided by managed workspace operators about levels of enquiries
received for their units.

It seeks to provide a reasonable indication of:

      -   what types of businesses are seeking workspace amongst the main
          commercial areas of Hackney (a map of the Hackney Employment Areas is
          provided in Appendix 1)
      -   the types and sizes of units they are seeking and broadly in what quantities,
          area by area
      -   types of workspace considered to be in short supply

From this, an attempt has been made to illustrate the different typologies of
workspace unit by use, size and other key characteristics and to highlight the types of
demand which remain unfulfilled. Reference has also been made to recent strategic
studies which corroborate these findings.

4.2       Demand Patterns by Location

4.2.1     South Shoreditch

The area of greatest demand and take up is South Shoreditch. Typical requirements
are for offices or studios of mainly between 500 – 1,000 sq. ft (46 – 93 sq m) or from
1,001 – 2,000 sq ft (93 – 186 sq m) principally for media and design activities and
some fashion, with 3,000 sq ft (279 sq m) being the typical upper limit. Commercial
property agents consulted have stated that the majority of these businesses are
reluctant to commit to long leases and require managed workspace or serviced
offices on flexible terms. The demand from these sources is particularly high, with
100 such enquiries per year not being untypical amongst a number of agents. One
particular agent reported receiving 3 – 400 such enquiries annually. The demand is
particularly strong for either offices or workspace in refurbished, characterful
buildings. The latter would mostly be in the form of Victorian warehouse and
industrial buildings which have been completely or partially refurbished and
subdivided into offices or studios, normally by floor. If available, old school buildings
or churches would prove equally popular.

Related to this, there have been several acquisitions of old industrial and warehouse
buildings intended for conversion into business centres or sub-division into studio
type floors of 1,000 – 2, 000 sq ft (93 – 186 sq m) or into managed workspace
business centres which would be subdivided into smaller units, mostly of under 500
sq ft (46 sq m).

There is a very small demand for light industrial space, with some agents reporting
about 30 such enquiries per year. This relatively small demand is understood to
reflect the low availability of such space, suggesting that demand would rise if more
light industrial premises were available.


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4.2.2   Kingsland Road and Dalston

Demand and take up in Kingsland Road or Dalston has included:

           -   accountants and solicitors requiring offices;

           -   there are a number of artists, a gallery and design businesses that
               have located to the Kingsland Basin/Kingsland Road area.

This would tend to support the view that there is some movement northward from the
South Shoreditch area. There is also evidence that two clusters of creative industries
are emerging in Dalston, notably along Shacklewell Lane/Arcola Street and a second
focused around the Dalston Culture House and Gillett Street. This would suggest
that location is not necessarily a critical factor for these businesses that may be
attracted by the relatively lower rental costs in Dalston and to a lesser degree, Mare
Street.

4.2.3   Hackney Central

Demand has been identified from solicitors, accountants, ICT businesses and other
businesses which support City functions in Hackney Central, typically requiring
offices of between 500 and 1,500 sq ft (46 and 139 sq m). An 8,000 sq ft (743 sq m)
office building has also recently been acquired within the area for use as a training
centre.

4.2.4   Elsewhere in Hackney

There is very limited demand experienced by agents elsewhere in Hackney due to
poor public transport, particularly underground connections; limited facilities for staff
and the generally unappealing nature of these areas.

The main area of demand for office space outside of the South Shoreditch area
appears to be from the voluntary sector.

Some take up is from businesses of an industrial nature requiring B1, B2, B8
premises of 250-2500 sq ft (23 – 232 sq m), who are likely to be displaced by the
Olympics but who need to stay within the area. These have been looking at such
locations as Dalston, Stamford Hill, Hackney Central or elsewhere in Hackney Wick.
One agent reported receiving half a dozen enquiries over the past 3 months. A
number of such businesses are understood to be looking at alternative locations
outside Hackney, further out to the East.

4.3     Demand from Outside Hackney

The principal source of demand for workspace from outside the area is from media
and design activities, most of whom are seeking space in Shoreditch. There is also
some demand for professional services such as solicitors and accountants seeking
high street locations.

The banking and finance sector, though not a user of small workspace, is
nevertheless significant as a source of inward investment in the large office sector,
there being a growing pattern of large office development, ranging from between
25,000 and 500,000 sq ft (2,323 and 46,464 sq m) on the Borough’s southern border
adjacent to the City.

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4.4     Accommodation in Short Supply

The main area of unfulfilled demand appears to arise from media and design
businesses seeking serviced B1 accommodation of below 1,000 sq ft (93 sq m).
(Serviced accommodation would normally include a shared reception, switchboard,
security and all inclusive charges covered rates and services and in some cases
cleaning). One agent reported some 80 – 100 currently unfulfilled requirements for
this type of property in Shoreditch.

4.5     Development Potential

Several agents highlighted the scope for development of additional business
workspace in Shoreditch for units of 500 – 1,000 sq ft (46 – 93 sq m) and 1,000 –
2,000 sq ft (93 - 186 sq m). This would need to be through conversions rather than
new build as this would not be considered commercially viable at achievable rents.
Rents typically achieved on these types of property are about £16-17 sq ft second-
hand and £20 sq ft for new space. In this part of London, rents are not high enough
on new build schemes to equate to sufficiently high development values attractive to
developers. For this reason, the tendency has been to refurbish older industrial
buildings for office and studio uses.

4.6     Invest in Hackney Enquiry Data

4.6.1   Basis of the Enquiry Data

The demand data for the B class uses produced by Invest in Hackney (IIH) provides
a very useful profile and insight into the enquiries from small businesses, particularly
start ups. They also cover inward investment, though the volume of such enquiries is
limited given that rents in the more attractive parts of the borough have risen
significantly in recent years.

An analysis of the IIH data over a three-month period indicates there were 56 current
requirements totalling 118,100 sq ft (10,975 sq m). (refer to Table 4.1).

4.6.2   Demand by Sector and Use

The enquiries are broken down across the following sectors of activity.

        The largest single source of demand is for professional and business
        services, which had current requirements for 37,200 sq ft (3,457 sq m) (32%
        of total demand) of which just under half was for B8 use; the rest being for
        offices.

        This was followed by manufacturing with a current requirement for 23,400 sq
        ft, (2,175 sq m) 20% of total demand, but with about three quarters of this
        being for B8 use.

        The creative and cultural sectors, made up of design, media and digital and
        performing arts businesses had current requirements of some 24,000 sq ft
        (2,230 sq m) of demand, this being predominantly for offices or studios. This
        also included a single requirement for 5,000 sq ft (465 sq m) as a film studio
        requiring light industrial or B8 use.


Final Report                              25
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Study of Small Business Workspace Provision in Hackney


         Demand from distribution uses accounted for a total of 13,100 sq ft (1,217 sq
         m), 11% of total requirements.

Factors behind the demand for B8 space are likely to include the requirement for
large areas for archive storage and furniture storage in the case of professional and
business services firms and storage of stock in the case of manufacturers. Creative
businesses tend to have a large requirement for storage of their products and
materials, and in the case of filming and performing arts activities, for large, open
plan spaces for a flexible range of uses.

It is notable that there is a range of requirements for education and training activities
and for a range of voluntary and social attractions. These would ideally make use of
community buildings, but a number of such organisations wish to consider office,
studio or even industrial space. It is also notable that a number of those requiring
space have specified the need for ground floor offices, as in the case of designers
and some social support organisations or D1/D2 premises, either for educational
uses or for creative sector or business services activities.

The table below summarises the demand patterns by size and type of user.

                                                Table 4.1

  Current Enquiries for B Class Uses by Sector and Use Received by Invest in
                         Hackney, Dec 2005 – Feb 2006
                                     Sqft
                              B1 a           B1 b           B1c/B2       B8           Total
Sectors
Distribution                            0              0          350         12750       13100             11%
Design and Visual                     600           8700            0          1550       10850              9%
Education and Training               4500              0         2500             0        7000              6%
Manufacturing                           0              0         8400         15000       23400             20%
Media and Digital                    1800           4500         5000             0       11300             10%
Misc                                  500              0            0             0         500              0%
Performing Arts                         0           3000            0             0        3000              3%
Professional Business
Services                             19700             0             0        17500       37200             32%
Transport                                0             0             0            0           0              0%
Voluntary Sector/Social
Services                            9200                0        1050          1050       11300          10%
Total                              36300            16200       17300         48300      118100         100%
Sq Metres                        3373.29
                                    31%              14%         15%           41%            100%


From this it can be seen that requirements by use class can be broken down
approximately as follows:

                                                Table 4.2

        Summary of Enquiries Received by Invest in Hackney by Use Class
                                                                                  Sqft               %
B1 (a) Offices                                                                    36,300             31%
B1 (b) R & D/Studio                                                               16,200             14%
B1 (c) Light Industrial and B2 General Industrial                                 17,300             15%
B8 Warehousing and Storage                                                        48,300             42%
Total                                                                             118,100            100%




Final Report                                           26
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Study of Small Business Workspace Provision in Hackney


4.6.3   Demand by Size and Use

An analysis of the size ranges sought by various types of user showed that the most
popular size range by individual requirement is below 500 sq ft (46 sq m) (Table 4.3).
This size range was required by 20 businesses demanded over this period (36% of
enquiries), but representing only 6% of total floorspace demand.

The next most popular size range was 1001 – 2000 sq ft, required by 16 businesses
(29%) who required 20% of total floorspace demand. Only 4 requirements of
between 10,000 sq ft and 20,000 sq ft (929 and 1,859 sq m) accounted for 48% of
total floorspace demand.


                                                  Table 4.3

     Summary of Enquiries Received by Invest in Hackney by Size and Use
                                  Class
                                                                                                  Total No. of
                                 B1 a       B1 b       B1c/B2 B8           Total       Total Sqft Requirements
    1-500 sqft                    2600       2050        1325 1250            7225            6%
        Total No. Requirements     8          6          3        3                                    20
    501 - 1000 sqft               3450       1950        1675     550         7625            6%
        Total No. Requirements     4          2          2        1                                     9
    1001 - 2000 sqft              8500       6700        4300 4000           23500           20%
        Total No. Requirements     5          5          3        3                                    16
    2001 - 3000 sqft              3000       5500        5000         0      13500           11%
        Total No. Requirements     1          2          2                                              5
    3001 - 4000 sqft
        Total No. Requirements     0          0          0        0           0                         0
    4001 - 5000 sqft              4750             0     5000         0       9750            8%
        Total No. Requirements     1          0          1        0                                     2
    5001-10,000 sqft                    0          0         0        0            0          0%
        Total No. Requirements     0          0          0        0                                     0
    10-15,000 sqft               14000             0         0 42500         56500           48%
        Total No. Requirements     1          0          0        3                                     4
    Total sqft                   36300 16200            17300 48300 118100                  100%
    %                              31%       14%          15%     41%        100%
    Total No. Requirements             20         15         11       10                                         56
    %                              36%       27%          20%     18%                                       100%


4.6.4   Location Preferences

The IIH data gives broad indications as to where in Hackney these businesses are
prepared to consider locating.

        The EC and N1 areas are of interest to a proportion of businesses across all
        sectors including some manufacturers and distribution businesses.

        Design and media businesses are interested in the Shoreditch (EC2, EC1
        and N1 areas) where they have the budget. This is true of 50% of cases. A
        higher proportion – around two thirds, seem prepared to consider the E9
        (Hackney Wick) and E8 (Hackney Central and Dalston) areas.



Final Report                                            27
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Study of Small Business Workspace Provision in Hackney


       Distribution and manufacturing businesses are predominantly interested in
       the E9 (Hackney Wick) and E8 (Hackney Central and Dalston) areas.

       Professional and business services tend to be predominantly interested in the
       E8 (Hackney Central and Dalston) areas, otherwise the Shoreditch (EC2,
       EC1 and N1 areas).

       Social support activities tend to be most interested in the (Hackney Central
       and Dalston) areas.

4.7    Findings from Managed Workspace Operators

There are a number of small managed workspace operators within Hackney ranging
from those specialising in specific sectors (e.g., the Power Station for creative
businesses; the Accelerator, London Metropolitan University and the Innovatory for
ICT and digital media, schemes such as the Fire Station which tends to attract
solicitors, security companies, advertising and general office users and The Works
which caters for all types of small businesses but has attracted many creative firms).

In terms of total lettable floorspace, these range from around 1,000 sq ft (93 sq m) to
normally no more than 7,000 sq ft, (650 sq m) offering units of between 150 sq ft up
to 700 sq ft (14 – 65 sq m) with 200 – 250 sq ft (19 – 23 sq m) being the most
commonly offered size.

Most of these schemes are all fully let or at 90% occupancy and cannot satisfy the
demand. Having said that, there would appear to be slightly weaker demand where
such schemes are outside the main South Shoreditch areas. In the latter areas
enquiries for space can reach as high as 180 per year, but with the general trend
being about 1 per week (i.e., 50 per year) per scheme. The number of enquiries
tends to reflect the amount of lettable space in each scheme. Some of these
operators, particularly in the not-for-profit sector, are considering plans for additional
workspace schemes.

These include:

       A private sector developer, who has recently developed three workspace
       schemes in the Borough, (in Dalston, Cambridge Heath and Hackney Wick)
       who may consider developing other such properties.

       One operator is considering options for existing space due to the change in
       planning policies affecting height restrictions.

       2-3 other operators are considering further acquisitions, but plans are at an
       early stage.

These operators are not able to be specific about size and location as most
prospects will be opportunity led according the buildings which may become
available. The operators specialising in the creative and media sectors have
indicated high demand for managed workspace centres, indicating that a large
proportion of such users are flexible in terms of the geographic location in which they
are prepared to operate. Many operators highlight the need for interventions to
provide more information on what space is available and/or measures to bring
forward the refurbishment and re-use of derelict shops, buildings and land within the
area.

Final Report                               28
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             Study of Small Business Workspace Provision in Hackney



             4.8       Summary of Demand by Workspace Typology

             The table below attempts to summarise the broad profile of workspace enquiries by
             type of use, size and area of the borough as identified from enquiries with local
             agents.

             Very broad estimates of annual enquiries for each type of user have been provided.

                                                      Table 4.4
                                      Profile Of Demand By Workspace Typology

AREA         SECTORS/            TYPICAL      RANGE OF         REQUIRED BUILDING            BROAD         OTHER
             FUNCTIONS           USE          UNIT SIZES       CHARACTERISTICS              ESTIMATE OF   OBSERVATIONS
                                 TYPE         REQUIRED                                      ANNUAL
                                                                                            ENQUIRIES

South        Solicitors,         B1 offices   100-500 sq ft    Managed workspace with       100           These businesses
Shoreditch   accountants,                                      shared services                            are prepared to
             insurance,                                                                                   share space with
             computer                                                                                     creative businesses
             services,
             security and
             other business
             services

South        ICT, Media,         B1 offices   100-500 sq ft    Managed workspace            3-400         Rents paid are
Shoreditch   Design. Other       or studios                    including incubator                        typically £15-25 sq
             creative and                                      facilities                                 ft but can reach
             cultural, artists                                                                            £60 sq ft inclusive

South        Design              B1           500-1000 sq ft   Old Victorian industrial     4 - 400       Rents: £16-17 sq ft
Shoreditch   Media               Offices                       and warehouse buildings,                   for second-hand;
             Fashion             Studios                       subdivided                                 £20 sq ft new. 101-
             Photographers                                                                                200 enquiries
                                                               B uses required on ground                  unfulfilled annually
                                                               floor
                                                                                                          Many want flexible
                                                                                                          leases and shared
                                                                                                          services

South        Solicitors,         B1 offices   500-1000 sq ft   Managed workspace with       50-100        These businesses
Shoreditch   accountants,                                      shared services                            are prepared to
             insurance,                                                                                   share space with
             computer                                                                                     creative businesses
             services,
             security and
             other business
             services

South        Media and           B1 Offices   1000-2000 sq     Offices or high quality      100           These are typically
Shoreditch   Design                           ft.              refurbished Victorian                      from businesses
                                                               buildings. B uses required                 moving into the
                                                               on ground floor                            area from outside
                                                                                                          Hackney

South        Media and           B1 Offices   2000-3000 sq     Offices or high quality      30-40         These are typically
Shoreditch   Design                           ft.              refurbished Victorian                      from businesses
                                              (185.85 –        buildings. B uses required                 moving into the
                                              278.78 sq m)     on ground floor                            area from outside
                                                                                                          Hackney



             Final Report                                      29
             ANCER SPA
             Study of Small Business Workspace Provision in Hackney


                                                   Table 4.4
                                   Profile Of Demand By Workspace Typology

AREA         SECTORS/         TYPICAL       RANGE OF         REQUIRED BUILDING           BROAD         OTHER
             FUNCTIONS        USE           UNIT SIZES       CHARACTERISTICS             ESTIMATE OF   OBSERVATIONS
                              TYPE          REQUIRED                                     ANNUAL
                                                                                         ENQUIRIES

South        Industrial       B1 light      1000-2000 sq     Traditional industrial      30-50         Demand is
Shoreditch                    industrial    ft               premises with good                        considered to be
                              and B8        (92.92 –         access                                    low due to limited
                                            185.85 sq m)                                               supply




Kingsland    Charities and    B1 offices,   500-2000 sq ft   Managed workspace           5-10
Road and     voluntary        some B8       (46.46 –
Dalston      organisations    storage       185.85 sq m)




Kingsland    Designers,       B1 office     170-600 sq ft    Second-hand buildings       50-100
Road and     ICT,                                            refurbished
Dalston      photography,
             artists and
             performance

Kingsland    Accountants,     B1 offices    500-1500 sq ft   Second-hand offices         1-2
Road and     solicitors and                                  refurbished
Dalston      computer
             services


Kingsland    Accountants,     B1 offices    170-600 sq ft    Managed workspace           50-100
Road and     solicitors and
Dalston      computer
             services




Hackney      Accountants,     B1 offices    170-600 sq ft    Managed workspace           20-30         1 training company
Central      solicitors and                 (15.79 – 55.75                                             has recently taken
             computer                       sq m)                                                      up 8000 sq ft
             services




Hackney      Industrial       B1, B2        500-2000 sq ft   Light industrial premises   6-10          Also looking at
Central      business         and B8        (46.46 –                                                   Stanford Hill and
                                            185.85 sq m)                                               Dalston areas



             Final Report                                    30
             ANCER SPA
          Study of Small Business Workspace Provision in Hackney


                                                  Table 4.4
                                  Profile Of Demand By Workspace Typology

AREA      SECTORS/           TYPICAL       RANGE OF         REQUIRED BUILDING       BROAD          OTHER
          FUNCTIONS          USE           UNIT SIZES       CHARACTERISTICS         ESTIMATE OF    OBSERVATIONS
                             TYPE          REQUIRED                                 ANNUAL
                                                                                    ENQUIRIES
Hackney   Artists, film,     B1 offices    150-500 sq ft    Managed workspace       5-100
Central   photography,       and           (13.93 – 46.46
          design, multi-     studios       sq m)
          media
Hackney   Charities and      B1 offices,   500-2000 sq ft   Managed workspace       5-10
Central   voluntary          some B8       (46.46 –
          organisations      storage       185.85 sq m)


Hackney   Artists, film,     B1 offices    200-750 sq ft    Managed workspace       20-30          As identified from
Wick      photography        and           (18.58 – 69.69                                          recent Cell Space
          and design         studios       sq m)                                                   development



          4.9      Areas of Unfulfilled Demand

          From discussions with commercial property agents and managed workspace
          operators, it could appear that there is unfulfilled demand for the following types of
          workspace.

                                                 Table 4.5
                      Profile of Properties Subject to Unfulfilled Demand in Hackney
          Area                      Use Type                      Size Ranges          Broad Estimate of
                                                                                       Annual
                                                                                       Requirements
                                                                                       Unfulfilled.
          South Shoreditch          Office and studio premises    150-600 sq ft        200



          South Shoreditch          Office and studio premises    500-1000 sq ft       150


          South Shoreditch          Office and studio premises    1000-2000 sq ft      50
          Hackney Central and       Studios and live work units   2-500 sq ft          40-50
          Dalston                   for artists and designers




          Final Report                                       31
          ANCER SPA
Study of Small Business Workspace Provision in Hackney



4.10   Findings from Recent Strategic Studies

A number of further insights into the demand profile for small business workspace
have been gleaned from recent studies.

i)     The study on Work Space Supply and Demand in the City Fringe (Invest in
       Hackney and ANCER SPA, 2003) identified a number of key trends.
       There is a critical under-supply of properties at a time when there was
       enormous demand for small business units from both existing companies and
       those considering the City Fringe for the first time. This demand is
       concentrated amongst small users, especially start ups, seeking space at less
       than £15 sq ft; the proportion of total enquiries which were for space of under
       2,500 sq ft (232 sq m) rose from 56% in 2000 to 85% in 2002.

       There is evidence of increasing property costs in the area. In 2000, 84% of
       enquiries were for properties offering rents of less than £15 sq ft; by 2002 this
       figure had dropped to 60%.

       Providers of workspace have identified that whilst there is currently a
       considerable amount of property on the market it is the wrong kind of space
       and not geared towards small workshop users. They also identified the lack
       of mid-sized stock as a problem in that many incubators who outgrow
       incubator space have nowhere to move onto.

       Secondary space dominates the City Fringe property market providing 88% of
       the property available. The amount of new commercial accommodation
       coming onto the market is negligible.

       Most affordable managed workspace over subscribed, but prevailing freehold
       values prevent further investment in this type of space.

       For those considering moving away from the area, the cost of rent and rates
       is by far the greatest push factor.

The study points out that City Fringe as an area has developed in a way that, no
matter what the market condition is at any given time, there is little likelihood of
provision for workspace users coming forward naturally. If such users are to be
facilitated, this will require intervention from public agencies either via public funding
or other routes such as Section 106 Agreements. The study concludes that:

ii)    The Hackney Cultural Strategy: Support for Creative and Cultural Industries
       highlighted property issues as being absolutely crucial to the development of
       the cultural industries sector within Hackney and that high costs are
       constraining the ability of sector to expand and develop.
iii)   The Black and Minority Arts Network Premises Audit, May 2005 indicates that
       this is a particularly serious issue amongst black run arts organisations where
       aaffordability is a key issue. The aggregate average cost per square foot per
       member is £19.00. This is £11.50 above the lower price range that is
       considered the affordable rate (£7.50 - £15.00) for premises in the borough.
       Linked to this issue is the question of the need for subsidies to bridge the gap
       between affordability and current market rents. To meet the immediate


Final Report                               32
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Study of Small Business Workspace Provision in Hackney


          demand would require an additional 117,500 square feet (8,539 sq m) of
          space in the borough.
These findings corroborate most of the demand analysis findings set out in the earlier
part of this section.
4.11       Conclusions on Workspace Demand

From the above, the following main findings can be highlighted.
   i)        South Shoreditch is the main focus for workspace demand, particularly from
             the business services and design and media sectors for space of up to 3000
             sq ft, particularly for units of less than 1000 sq ft (93 sq m). Much of this
             demand is unfulfilled.
   ii)       Much of this demand is coming from outside Hackney. There is high
             demand for existing managed workspace schemes which are well located
             for public transport, particularly South Shoreditch. A large amount of this
             demand is not being met. There would be scope to develop more
             schemes providing small units of between about 150 and 500 sq ft (14
             and 46 sq m) and units of 500 to 1000 sq ft (46 sq m to 93 sq m) in South
             Shoreditch and to a lesser extent in Dalston and Hackney Central.
   iii)      Banking and Finance is also a major source of inward investment; such
             demand is development led and somewhat sporadic.
   iv)       There is evidence of demand from the creative sector spreading into
             Kingsland Basin/Kingsland Road and small clusters are also emerging in
             Dalston and Hackney Central.
   v)        Elsewhere in the borough demand is mainly confined to that from the
             community and voluntary sectors and from manufacturers being displaced
             from Hackney Wick.
   vi)       Recent strategic studies have highlighted the increasing demand for small
             workspace units, the high cost of workspace in the areas close to the City
             and a need to provide affordable workspace for the arts and cultural
             industries. Other evidence from this report confirms these findings.




Final Report                                33
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       Study of Small Business Workspace Provision in Hackney



       5.          FACTORS AFFECTING SUPPLY OF SMALL BUSINESS WORKSPACE

       5.1         Overview

       This section examines the supply of small business workspace across the borough.

       The types of workspace typically occupied by SMEs fall into three main categories.
       These are managed workspace/incubator, live-work and mixed use developments
       and general commercial workspace. These are considered in turn, in terms of what is
       currently available. The factors which are affecting supply are then overviewed
       including:

              -    refurbishments and new build space
              -    the location of new workspace developments relative to where they are
                   needed
              -    unit prizes being provided in new build schemes
              -    quality of workspace
              -    age of workspace stock
              -    vacancy levels
              -    success in letting of new schemes
              -    appropriateness of design
              -    council policies affecting workspace supply
              -    workspace development economics.

       The section sets out a number of conclusions regarding what and constraining supply
       of appropriate workspace.

       5.2         Managed Workspace and Business Incubators

       Managed workspace is a key element in the spectrum of workspace available to
       small and medium enterprises. It provides the sort of premises that new businesses
       want, on terms which meet their needs and with the support services that help to
       secure their continuing success and at a price they can afford. They may also
       provide core activities such as shared office services, equipment, security and
       possibly some business support and advice.

       Managed workspace features as an important element of the supply of workspaces
       for SMEs. There are to be a number of managed workspaces in the Borough, a
       sample of which are summarised in the table below.

                                      Table 5.1
  Profile of Managed Workspace and Incubator Schemes Identified in the Hackney Area,
                                     March 2006

NAME OF                   LOCATION                TOTAL        NO OF      RANGE      NO OF   TYPES OF
DEVELOPMENT                                       LETTABLE     LETTABLE   OF         UNITS   BUSINESSES
                                                  WORKSPACE    UNITS      UNIT       UNLET   MAKING
                                                  (SQ FT)                 SIZES              ENQUIRIES
                                                                          (SQ FT)
The Fire Station          Old Fire Station        6,900        32         150 –      3       All. Media,
                          Business Centre                                 687                solicitors,
                          140 Tabernacle St,                                                 security
                          EC2A 4SD                                                           companies,
                                                                                             advertising,
                                                                                             general offices.
Accelerator               London Met University   2,300        11         96 – 400   0       Magazines,

       Final Report                                       34
       ANCER SPA
       Study of Small Business Workspace Provision in Hackney


                                      Table 5.1
  Profile of Managed Workspace and Incubator Schemes Identified in the Hackney Area,
                                     March 2006

NAME OF                  LOCATION                  TOTAL             NO OF           RANGE      NO OF        TYPES OF
DEVELOPMENT                                        LETTABLE          LETTABLE        OF         UNITS        BUSINESSES
                                                   WORKSPACE         UNITS           UNIT       UNLET        MAKING
                                                   (SQ FT)                           SIZES                   ENQUIRIES
                                                                                     (SQ FT)
                         Shoreditch Building,                                                                Online Forums,
                         35 Kingsland Rd,                                                                    Programmers,
                         E28AA                                                                               Games makers,
                                                                                                             online holidays,
                                                                                                             software
                                                                                                             developers
The Innovatory-The       239 Old Street,           To be supplied    6 (see end)     To be      2-3 hot      ICT, technology,
Digital Incubator        EC1V 9EY                                                    supplied   desks        Media, Creative,
                                                                                                1 Retail     Cultural
                                                                                                unit, 1
                                                                                                office
The Works – now ‘Urban   16/24 Underwood           8,000             21              84 –       5            Architects,
Edge’                    Street                                                      1500                    Designers,
                         N1 7JQ                                                                              Photographers,
                                                                                                             TV Production
The Power Station        15 Coronet Street         914               5               117 –      0            Artists, Media
                         London N1 6HD                                               234
The Print House          18 Ashwin Street          30,000            40              1206 –     1            Charities,
                         Hackney E8                                                  1700                    creatives,
                                                                                                             Musical
                                                                                                             instrument
                                                                                                             makers,
                                                                                                             Sculptors,
                                                                                                             Designers, IT,
                                                                                                             Web support
The Tea Building         The Tea Building, 56      130,000           50              1200 –     1            Media, fashion,
                         Shoreditch High St,       (7,500                            11,500                  advertising,
                         E1                        adjacent let to                                           Galleries
                                                   mother
Bootstrap Enterprises    Fitzroy House, Abbot      -                 70 hot          -          -            New venture, no
                         St, E8                                      desks                                   further
                                                                                                             information
                                                                                                             given. From 70
                                                                                                             desks has
                                                                                                             already let 15
The Colour Works         2 Abbot Street,           7,000             13              110-       0            Designers, ITC,
                         Hackney E8                                                  1,000                   Web businesses,
                                                                                                             Voluntary
                                                                                                             organisations
Dalston Culture House    Gillett Street, Hackney   5,800             3.              350 –      0            Solicitors, Web
                         E8 3AZ                    expanding to      Expanding       2640                    designers,
                                                   8,400             to 7-8                                  designers,
                                                                                                             Insurance, Arts
                                                                                                             and crafts.
                                                                                                             Enquiries from all
                                                                                                             sorts of
                                                                                                             businesses
Cell Project Space ‘C’   80-84 Wallis Rd,          14,000            32 + 15 = 47    170 –      1            Artists, Sculptors,
                         Hackney Wick E8 2DJ                                         775                     Painters, Film,
                                                                                                             Photography,
                                                                                                             Performance,
                                                                                                             Design,
                                                                                                             Computer Design
Cell Project Space ‘A’   4-8 Arcola St, E8 2DJ     9,500             6 units +       170-300    All - and    Painters,
                                                                     large open      3600 for   have been    Sculptors, Film,
                                                                     plan area for   open       for a year   Photography,
                                                                     60 people       plan                    Performance,
                                                                                                             Design,
                                                                                                             Computer Design
Cell Project Space ‘B’   258 Cambridge Heath       5,500             15 studios      Average    0            Painters,
                         Rd, E8 NDA                                                  is 250                  sculptors, Film,
                                                                                                             Photography,

       Final Report                                          35
       ANCER SPA
       Study of Small Business Workspace Provision in Hackney


                                      Table 5.1
  Profile of Managed Workspace and Incubator Schemes Identified in the Hackney Area,
                                     March 2006

NAME OF                    LOCATION              TOTAL           NO OF           RANGE     NO OF         TYPES OF
DEVELOPMENT                                      LETTABLE        LETTABLE        OF        UNITS         BUSINESSES
                                                 WORKSPACE       UNITS           UNIT      UNLET         MAKING
                                                 (SQ FT)                         SIZES                   ENQUIRIES
                                                                                 (SQ FT)
                                                                                                         Performance,
                                                                                                         Design,
                                                                                                         Computer Design
Sense of Place             6-8 Standard Place,   2186            17 but can      128       All as        None as building
(Rivington Place), INIVA   Rivington St, EC2A                    split to meet             marketing     is not ready for
& Autograph World          3BE                                   market                    has yet to    another 18
                                                                 demand                    take place    months
Circus Space               Coronet Street,       7,125 – 7,500   10 units & 1    Yet to    All as not    Not commenced
                           London N1 6ND         not yet         production      be        ready until   marketing yet
                                                 configured      space to be     decided   January
                                                                 provided                  2007


       Business incubators are an important sub-set of the managed workspace model. In
       addition to providing serviced units for small companies, they provide more intensive
       sources of support for their tenant companies, such as tailored business support
       packages for their tenants including business planning, management assistance and
       mentoring and networks that will benefit their tenant companies. They typically focus
       on innovative or creative businesses with fast growth potential. The aim of every
       business incubator should be to provide the best possible start for new businesses
       so they are more likely to survive and grow. The Accelerator and Innovatory listed
       above are both business incubator schemes which operate in line with this model.

       There are some key elements that are common to a successful managed workspace
       or incubator.

            -    property maintenance and all integrated services are organised by the
                 management team

            -    centrally provided assistance for the businesses to help them develop such
                 as a conference room (which is equipped with digital projection) that is made
                 available for all unit holders;

            -    a focal point where people on site can meet and share their experiences;

            -    security, which is often a key concern of tenants;

            -    flexible terms of occupancy such as an ‘easy in easy out’ policy; and the
                 ability to expand internally;

            -    management and business support such as the preparation of business
                 plans, grant applications, financial data, marketing, legal and property advice
                 and good quality advice from partner organisations and agencies.




       Final Report                                       36
       ANCER SPA
Study of Small Business Workspace Provision in Hackney



5.3      Live-work Units

The development of live-work units in Hackney has been well documented
elsewhere1. Live-work developed in response to the lack of demand for any type of
commercial property in the South Shoreditch area in the 1990’s. A combination of low
rents and older commercial buildings that converted well to studios and offices began
to attract self-employed people or small businesses working in sectors that Hackney
sought to encourage. These included artists; photographers; craft and designers.

At this time, Hackney began to receive planning applications to introduce residential
use into various small-scale commercial buildings, mostly in South Shoreditch.
Subsequent Supplementary Planning Guidance (SPG) supported this trend and
highlighted live-work as a legitimate response to “a new way of working”; bringing
mixed use into employment areas, without compromising employment status;
sustainable development, cutting down trip generation; bringing “life” to otherwise
“dead” night time areas; a means of bringing vacant buildings back into use, and; a
means of refurbishing buildings, including the enhancement of Conservation Areas.

During the ten-year period from 1995 to 2004 1,336 live-work units had been
completed in Hackney in schemes of more than 5 units. The period 2000 to 2004
saw live-work become a staple of the local property market with 1,108 live-work units
being completed in 70 schemes. The number of schemes peaked in 2001 with
completion of 350 units.

The London Residential Research (LRR) report also noted that as the 2000-2004
period progressed:

‘..it became much more common for either live-work or private residential
development to incorporate pure employment uses. Latterly, the B elements have
become quite large. A very common use mix which emerged within DEAs is what we
call the “Hackney layer cake”, with basement parking, ground and perhaps first floor
for pure B use (usually offices), live-work on the intermediate floors and pure
residential on the top floors (rarely exceeding 14 units).’

Live-work schemes spread right across the Borough, particularly within DEAs where
there was a presumption against residential development, but where live-work could
achieve equivalent values and apparently meet employment retention policy criteria.
Hackney revoked the Council’s Supplementary Guidance Note on Live-work
Developments” on 22nd September 2003. The report to the Cabinet and Regulatory
Committee highlighted among other things a number of shortcomings of live/work
developments including:

      a) concern about the “genuine” nature of live-work development;

      b) lack of clarity about the unsuitability of buildings for continued employment
         use and how these buildings might be suitable for the employment use
         envisaged in live-work;

      c) buildings were being deliberately vacated with the accompanying relocation
         or loss of local jobs in order to fulfil the vacancy criteria of the SPG ; and
1
  London Residential Research, David Chippendale, Geoff Marsh, Matthew Giddings,
‘Review Of Live-Work Policy In Hackney’, April 2005

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      d) lack of evidence that live-work use provided either employment or housing for
         local people.

With regard to the development of B1 workspace, the Review of Live Work Policy in
Hackney reported that in 2005 a large amount of commercial space, including
163,000 sq ft (15,147 sq m) gross of B1 offices, was being constructed as the
commercial element of either private housing or live-work led development.

There is evidence that housing or live-work development is subsidising the
construction of offices, which would not otherwise be viable as stand-alone
developments. There is also evidence of a tendency to convert some of the office
space to either live-work or residential at a later stage.

However, the contribution towards the supply of workspace for SMEs is hard to
quantify. The LRR report suggests that overall this contribution is not likely to be
significant. In the first place, the report concludes that live-work does not actually
offer occupiers “cheap” workspace to run a home based business. Secondly it
indicates that a very high proportion of live-work units are de facto residential – or
“back-door residential”.

The feeling of developers is that live-work achieved a great deal in kick starting the
regeneration of Shoreditch. They felt that the policy should have been made to work
rather than being killed off and that there were still people in creative industries that
needed this type of space when they were starting up. Our own view is that,
because, in practice, live-work does not offer cheap workspace, it does not
fundamentally address the priority needs of start up and micro businesses, which
account for most of the requirements identified in the demand analysis. Whilst there
is a continuing role for live-work, it is in reality suitable for very well established and
successful businesses who can afford to purchase premises at the prices developers
demand. As such, it represents only a small part of the supply equation and appears
to play a limited part in addressing those areas where workspace is found to be in
short supply. It should therefore not be the core focus for a workspace supply
strategy.

5.4      General Commercial Workspace

5.4.1    Snapshot of Supply by Current Availability

In order to quantify supply, a snapshot survey was undertaken of all B Class property
currently on the market at February 2006. This included data provided from Invest in
Hackney’s current property register and references to property advertised by local
commercial agents. Virtually all of the supply recorded was from existing commercial
property rather than mixed use business space.


This has been sorted by area, size and quality and is set out in Table 5.2. It also
forms part of the part of the strategic model in Appendix 3 (see under heading
Floorspace Supply – Supply Snapshot).

This does not represent vacancy given that there is a large amount of floorspace
lying empty which is not on the market. For this reason, current supply is defined as
floorspace which is available and on the market. It should also be noted that as a
snapshot, the data can only provide a broad indication of supply and it would be

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Study of Small Business Workspace Provision in Hackney


useful for this data to be gathered over a one-year period to provide an annualised
picture of typical supply. Nevertheless, the data provides valuable insights into the
current status of workspace supply as a basis for assessing the areas where demand
and supply may not be appropriately matched.

The snapshot indicates some 900,000 sq ft (83,635 sq m) of workspace is currently
available, of which some just under 620,000 sq ft (57,615 sq m) is available in the
South Shoreditch area.

Altogether, South Shoreditch has just under 380,000 sq ft (35,312 sq m) of office
space, 140,000 sq ft (13,010 sq m) studio space and 100,000 sq ft (9,293 sq m) of
industrial space available.

Within South Shoreditch it is notable that there is a large supply (110,000 sq ft –
7,452 sq m) of office and studio space in the 1 – 2,000 sq ft (93 – 186 sq m) range,
with half as much again in each of the 2 – 3,000 sq ft (186 – 279 sq m) range,
70,000 in the 3-4000 sq ft (279 – 372 sq m) range and 40,000 in the 4 – 5,000 sq ft
(372 – 465 sq m) range. There is about 130,000 sq ft (12,081 sq m) available in the
size range from 5,000 to 15,000 sq ft (465 – 1,394 sq m).

In comparison, there is very limited availability of units under 1,000 sq ft (about
20,000 sq ft) (1,859 sq m) reflecting strong demand evidence in this size range.

It is also notable that there is very limited new office space, although some 70% is
second-hand stock refurbished to a reasonable standard.

Outside of South Shoreditch, the other principal areas of available floorspace are:

     Kingsland Basin/Kingsland Road with some 62,000 sq ft (5,762 sq m) available.

     Hackney Central, with 69,000 sq ft (6,412 sq m) comprised equally of office and
     industrial space.

     Hackney Wick, with 85,000 sq ft (7,899 sq m) of light industrial space available.

     There is very little supply available in Dalston – some 3,000 sq ft (279 sq m),
     comprising a small number of units under 2,000 sq ft (186 sq m).

     There is some 74,000 sq ft (6,877 sq m) available in the remainder of Hackney.

The analysis of supply indicates that there is a need to focus on provision of the
smaller size ranges, (i.e. below 1,000 sq ft or 93 sq m) particularly in South
Shoreditch. The analysis also indicates that areas such as Dalston and Hackney
Central, where there is evidence of demand from such activities as creative and
business services activities, need to increase the supply of small business
workspace in the same size range.

With regard to move on space, there would appear to be a relatively copious amount
of supply in units of 1,000 sq ft (93 sq m) and above, suggesting that, although the
level of supply of new units is limited, this demand can be met through refurbishment
of second hand premises.




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                                                                        Table 5.2
                                       Snapshot of Small Business Workspace Supply, Hackney Borough, February 2006
                                                                                                      (Includes Units up to 15,000 sqft only)

Area                           Use
                               B1a                                                                B1b                                       B1c                                                           B2
                               Offices new       Offices         Offices          Sub Total       Studio/R&D Flexible       Sub Total       Light            Light       Light            Sub Total       General General             Sub Total       B8
                                                 second-         older low-                                                                 Industrial       Industrial  Industrial                       industrial industrial                       Warehousing
                                                 hand high       cost                                                                       new              second-hand older low-                       new        second-                          and Storage
                                                 standard                                                                                                    high        cost                                        hand
                                                                                                                                                             standard

                                                                                                                                                                                                                                                                    Total
Dalston
            1-500 sqft                       0               0          381               381              0            0               0                0             0              0               0           0               0               0            0            381
            501 - 1000 sqft                  0               0          588               588              0            0               0                0             0              0               0           0               0               0            0            588
            1001 - 2000 sqft                 0        2083                    0         2083               0            0               0                0             0              0               0           0               0               0            0        2083
            2001 - 3000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            3001 - 4000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            4001 - 5000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            5001-10,000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            10-15,000 sqft                   0           0                0                0               0            0               0                0             0              0               0           0               0               0            0         0
            Sub total                        0        2083              969             3052               0            0               0                0             0              0               0           0               0               0            0        3052
Kingsland
Basin/Kin
gsland
Road
            1-500 sqft                       0        1000                    0         1000               0            0               0                0             0              0               0           0               0               0         3150        4150
            501 - 1000 sqft                  0               0                0               0          957            0           957                  0             0              0               0           0               0               0            0            957
            1001 - 2000 sqft                 0               0        1385              1385               0            0               0                0         1750               0        1750               0               0               0            0        3135
            2001 - 3000 sqft                 0               0                0               0         2214            0         2214                   0             0              0               0           0               0               0            0        2214
            3001 - 4000 sqft                 0               0                0               0            0            0               0                0             0       11300         11300                0               0               0            0        11300
            4001 - 5000 sqft                 0        4244                    0         4244               0            0               0                0             0        8500           8500               0               0               0            0        12744
            5001-10,000 sqft                 0       10972                    0        10972               0       6823           6823                   0             0              0               0           0               0               0            0        17795
            10-15,000 sqft                   0           0               0                 0         13230            0          13230                   0            0            0             0                0               0               0            0        13230
            Sub total                        0       16216            1385             17601         16401         6823          23224                   0         1750        19800         21550                0               0               0         3150        65525
Hackney
Central



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                                                                      Table 5.2
                                     Snapshot of Small Business Workspace Supply, Hackney Borough, February 2006
                                                                                                    (Includes Units up to 15,000 sqft only)

Area                         Use
                             B1a                                                                B1b                                       B1c                                                           B2
                             Offices new       Offices         Offices          Sub Total       Studio/R&D Flexible       Sub Total       Light            Light       Light            Sub Total       General General             Sub Total       B8
                                               second-         older low-                                                                 Industrial       Industrial  Industrial                       industrial industrial                       Warehousing
                                               hand high       cost                                                                       new              second-hand older low-                       new        second-                          and Storage
                                               standard                                                                                                    high        cost                                        hand
                                                                                                                                                           standard

                                                                                                                                                                                                                                                                  Total
          1-500 sqft                       0               0          240               240              0            0               0                0           300              0         300               0               0               0            0            540
          501 - 1000 sqft                  0               0                0               0         594        1752           2346                   0         1876           924          2800               0               0               0            0        5146
          1001 - 2000 sqft                 0               0        1993              1993               0            0               0                0         1211         7943           9154               0               0               0            0        11147
          2001 - 3000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          3001 - 4000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          4001 - 5000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          5001-10,000 sqft                 0               0       17816             17816               0            0               0                0             0        7750           7750               0               0               0            0        25566
          10-15,000 sqft                   0               0       10165             10165              0           0              0                   0        14276            0         14276                0               0               0            0        24441
          Sub total                        0               0       30214             30214            594        1752           2346                   0        17663        16617         34280                0               0               0            0        66840
Hackney
Wick
          1-500 sqft                       0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          501 - 1000 sqft                  0               0                0               0         700             0           700                  0             0              0               0           0               0               0            0            700
          1001 - 2000 sqft                 0               0                0               0            0            0               0                0             0        1488           1488               0               0               0            0        1488
          2001 - 3000 sqft                 0               0                0               0            0            0               0                0             0        2811           2811               0               0               0            0        2811
          3001 - 4000 sqft                 0               0                0               0            0            0               0                0         3130               0        3130               0               0               0            0        3130
          4001 - 5000 sqft                 0               0                0               0            0            0               0                0             0        4627           4627               0               0               0            0        4627
          5001-10,000 sqft                 0               0                0               0            0            0               0                0             0       41533         41533                0               0               0            0        41533
          10-15,000 sqft                   0               0                0               0            0            0               0                0             0       31831         31831                0               0               0            0        31831
          Sub total                        0               0                0               0         700             0           700                  0         3130        82290         85420                0               0               0            0        86120


          1-500 sqft                       0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          501 - 1000 sqft                  0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
          1001 - 2000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0



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                                                                        Table 5.2
                                       Snapshot of Small Business Workspace Supply, Hackney Borough, February 2006
                                                                                                      (Includes Units up to 15,000 sqft only)

Area                           Use
                               B1a                                                                B1b                                       B1c                                                           B2
                               Offices new       Offices         Offices          Sub Total       Studio/R&D Flexible       Sub Total       Light            Light       Light            Sub Total       General General             Sub Total       B8
                                                 second-         older low-                                                                 Industrial       Industrial  Industrial                       industrial industrial                       Warehousing
                                                 hand high       cost                                                                       new              second-hand older low-                       new        second-                          and Storage
                                                 standard                                                                                                    high        cost                                        hand
                                                                                                                                                             standard

                                                                                                                                                                                                                                                                    Total
            2001 - 3000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            3001 - 4000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            4001 - 5000 sqft                 0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            5001-10,000 sqft                 0               0                0               0            0       7500           7500                   0             0              0               0           0               0               0            0        7500
            10-15,000 sqft                   0               0                0               0            0            0               0                0             0       13785         13785                0               0               0            0        13785
            Sub total                        0               0                0               0            0       7500           7500                   0             0       13785         13785                0               0               0            0        21285
Rest of
Hackney
            1-500 sqft                       0          360                   0           360              0            0               0                0             0              0               0           0               0               0            0            360
            501 - 1000 sqft                  0               0          812               812              0            0               0                0             0              0               0           0               0               0            0            812
            1001 - 2000 sqft                 0               0        1425              1425            1402            0         1402                   0         5540         4628         10168                0               0               0            0        12995
            2001 - 3000 sqft                 0               0                0               0            0            0               0                0             0       10574         10574                0               0               0            0        10574
            3001 - 4000 sqft                 0        6870                    0         6870               0            0               0                0             0        3958           3958               0               0               0            0        10828
            4001 - 5000 sqft          4372                   0                0         4372               0            0               0                0             0              0               0           0               0               0            0        4372
            5001-10,000 sqft                 0               0        5856              5856               0            0               0          6620                0              0        6620               0               0               0            0        12476
            10-15,000 sqft                   0               0                0               0            0            0               0                0             0              0               0           0               0               0            0             0
            Sub total                 4372            7230            8093             19695            1402            0         1402             6620            5540        19160         31320                0               0               0            0        52417
South
Shoreditc
h
            1-500 sqft                       0        6332                    0         6332            1305       2081           3386                   0             0              0               0           0               0               0            0        9718
            501 - 1000 sqft                  0        9859            4310             14169            5309       1555           6864                   0         1818           797          2615               0               0               0            0        23648
            1001 - 2000 sqft                 0       79067           27945           107012          28732        22851          51583                   0        14887        13786         28673                0               0               0            0       187268
            2001 - 3000 sqft                 0       35114           20335             55449         11522        18188          29710                   0        17817         4357         22174                0               0               0            0       107333
            3001 - 4000 sqft                 0       44758           24688             69446            1955      10523          12478             3624            7350         3557         14531                0               0               0            0        96455



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                                                                      Table 5.2
                                     Snapshot of Small Business Workspace Supply, Hackney Borough, February 2006
                                                                                             (Includes Units up to 15,000 sqft only)

Area                         Use
                             B1a                                                         B1b                                  B1c                                                           B2
                             Offices new       Offices     Offices          Sub Total    Studio/R&D Flexible     Sub Total    Light            Light       Light            Sub Total       General General             Sub Total       B8
                                               second-     older low-                                                         Industrial       Industrial  Industrial                       industrial industrial                       Warehousing
                                               hand high   cost                                                               new              second-hand older low-                       new        second-                          and Storage
                                               standard                                                                                        high        cost                                        hand
                                                                                                                                               standard

                                                                                                                                                                                                                                                      Total
          4001 - 5000 sqft          4950           27138        8712             40800            0      18470        18470                0        26605               0      26605                0               0               0            0        85875
          5001-10,000 sqft                 0       47517       23621             71138            0      11085        11085          6413                0              0        6413               0               0               0            0        88636
          10-15,000 sqft                   0       12267                0        12267            0      10847        10847                0             0              0               0           0               0               0            0        23114
          Sub total                 4950          262052     109611             376613      48823        95600      144423          10037           68477        22497 101011                       0               0               0            0       622047

All
Hackney
          1-500 sqft                       0        7692          621             8313         1305       2081         3386                0           300              0         300               0               0               0         3150        15149
          501 - 1000 sqft                  0        9859        5710             15569         7560       3307        10867                0         3694         1721           5415               0               0               0            0        31851
          1001 - 2000 sqft                 0       81150       32748           113898       30134        22851        52985                0        23388        27845         51233                0               0               0            0       218116
          2001 - 3000 sqft                 0       35114       20335             55449      13736        18188        31924                0        17817        17742         35559                0               0               0            0       122932
          3001 - 4000 sqft                 0       51628       24688             76316         1955      10523        12478          3624           10480        18815         32919                0               0               0            0       121713
          4001 - 5000 sqft          9322           31382        8712             49416            0      18470        18470                0        26605        13127         39732                0               0               0            0       107618
          5001-10,000 sqft                 0       58489       47293           105782             0      25408        25408         13033                0       49283         62316                0               0               0            0       193506
          10-15,000 sqft                   0       12267       10165             22432      13230        10847        24077                0        14276        45616         59892                0               0               0            0       106401
          TOTAL                     9322          287581     150272            447175       67920      111675       179595          16657           96560      174149 287366                        0               0               0         3150       917286




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5.5       Supply of New Small Business Workspace

5.5.1     Refurbishment

The supply of small business workspace would appear to be predominantly from
refurbishment of existing buildings. This is true of most of the managed workspace
schemes, which have been reviewed, and of most of the high quality office and
studio supply available in such locations as South Shoreditch.

Only 9.5 (12.5%) of a sample of B1 planning applications were for refurbishment.
However, many refurbishment schemes do not require planning permission and
would not therefore be captured by this exercise. It is therefore difficult to provide any
accurate estimate of the amount of floorspace becoming available through
refurbishment compared to the amount of new build floorspace.

5.5.2     New Build Space

New build space is potentially a major contributor to the workspace available to
SMEs. However, there are questions as to whether the supply within the borough is
the most appropriate in terms of location, size and cost. Appendix 1 examines a
sample of planning applications within a review of mixed use developments that have
been determined. The total floorspace that has been created by new build
development from this sample that has been completed or is nearing completion is
40,529 m2. The amount of floorspace that has been granted permission but has not
yet been implemented is 41,184 m2.

Development is heavily weighted towards new build with a total of 66.52 (87.5%) of
planning applications out of a total of 76 planning applications in the sample being for
the erection of new buildings. The remainder is for refurbishment or alteration.

5.5.3     Location of New Workspace Developments

In parallel with this, the nature of new build and refurbished workspace supply has
been examined in detail through review of a sample of mixed-use planning
applications submitted over the last seven years. Case studies of these planning
applications were undertaken to explore the take up and success of mixed use
schemes coming forward in the Borough. These have mainly, although not
exclusively, covered proposals for development within Defined Employment Areas.

The planning applications that make up the review are located in five main areas with
the remainder being scattered in other areas of Hackney. Table 5.4 shows the main
area of activity, which is clearly South Shoreditch with 43% of the planning
applications. South Shoreditch has four DEAs. This is followed by Kingsland Road
(12%) and Mare Street (14%). 21% of the planning applications concerned sites
located outside DEAs.

The view of many developers is that too much of the new commercial floorspace built
in response to Hackney’s re-provision policy is being built in the wrong locations. The
net effect has been to produce an over supply of poor quality floorspace. that does
not meet the requirements of the market as it is in the wrong place. Since many such
developers do not expect to let the floorspace, they devote minimal investment to
design quality and positioning and fit out further restricting its appeal to the market.

2
    The 0.5 refers to one planning application comprising part new build and part refurbishment.
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             Table 5.3
                  Locations of Sample of Planning Applications
             Location                                    %
             Dalston                                     7

             Hackney Wick                                3

             Kingsland Road                              12

             Mare Street                                 14

             Other Hackney                               21

             South Shoreditch                            43


5.5.4   Unit Sizes in New Build Developments

The review of mixed-use planning applications together with some additional
developments identified by the London Borough of Hackney Planning department
shows that the size of units that are being developed following the granting of
planning permission match the size of units developed in nearly all cases falls within
the size range defined is appropriate for occupation by SMEs. The findings from the
case studies are that the majority of the B1 workspace that has been developed is
available in a range of unit sizes are below the 2,500 sq ft (232 sq m) threshold size
specified in the Atkins report as being the size, ‘that small, cost-sensitive firms
generally require, with many below the 1000 sq ft (93 sq m) level which is suitable for
micro and start-up businesses.

The only relatively large space (approximately 776 m2) identified was at 7
Shepherdess Walk where the ground floor has not been subdivided as indicated on
the approved plans. However, on enquiry it was discovered that this space is not
being marketed at this point in time although the letting agent was unwilling to
provide any reason for this.

5.5.5   Employment Densities per Workspace

In considering whether the appropriate size of workspace unit is becoming available
for occupation by SMEs in Hackney, it is necessary to consider the range of sizes
that would fulfil the normal requirements of enterprises with 1 to 10 and 11 to 25
employees.

A number of studies have undertaken research into the floorspace per worker/labour
ratio for different types of uses. The floorspace per worker/labour ratio is the average
floorspace per person in a workplace and is used to measure employment density.
The floorspace/worker ratio is abbreviated as F/L and is the inverse measure of
employment density: an increase in floorspace per worker is a fall in the density of
employment.

Employment density, or floorspace per worker ratio (F/L), is normally measured in
square meters (sq. m) of floorspace per person. A distinction is also made between
net and gross F/L, as defined by Royal Institute of Chartered Surveyors (RICS) Code
of Measuring Practice (1993).



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The Ove Arup survey undertaken for English Partnerships estimates that the general
industry F/L ratio is 366 sqft (34 sq m) and for small business it is 344 sqft (32 sq m)
and High tech / R&D (non-Science Park) is 312 sqft (29 sq m). For offices the
general office F/L ratio is 204 sqft (19 sq m) and the City of London F/L ratio is 215
sqft (20 sq m).

Basing the floorspace requirement on the general office F/L ratio of 19 m2, this
produces a requirement of 190m2 for cases where there are 10 employees and
475m2 for cases where there are 25 employees.

5.6        Quality of Workspace

5.6.1      Criteria Defining Quality

In order to make an assessment of the quality of the workspace available to SMEs it
is necessary to consider what criteria should be employed in undertaking that
assessment.

Quality workspace has a different meaning according to the type of space under
consideration. Flexible managed workspace should allow occupants to grow and
develop. It is also important that there is flexibility in terms of size of units available to
accommodate expanding SMEs that have a need for additional floorspace. Layout is
a key consideration; it works best when tenants are able and are encouraged to
network and share ideas and resources. For managed workspace quality also
encompasses support services.

The Commission for Architecture and the Built Environment (CABE) has identified six
principles that contribute to a better place to work and can be influenced through the
planning system3 These include adaptability, that is workplaces that are able to
accommodate changing requirements, including responding to changing market
forces. Key elements are:

        The workplace has the ability to accommodate changing technological,
        economic, social and environmental requirements.
        The workplace has the capability of being altered or extended conveniently
        when necessary.
        The built structure can be easily converted from one use to another, for
        example office to residential and back again.
        The development allows for as many servicing and layout options as possible,
        enabling transience in terms of tenant turnover and changes in terms of work-
        setting change.

In any type of workspace, an imaginative and well-designed environment is essential.
The ‘fit out’ is also important. In today’s environment it is essential to be able to enjoy
the benefits of high-speed broadband internet access. Flexibility in terms of unit sizes
is also important.

In the context of this study, it is not possible to make a full assessment of all the
above indicators of quality. It has therefore been necessary to make an assessment
of the quality of workspace in Hackney by considering a number of factors:
3
    By design: better places to live. CABE and Llewelyn Davies Yeang 2005

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   The age of the stock of buildings available to SMEs will provide a proxy indicator
   for quality. This is built on the assumption that older buildings will not provide the
   quality of purpose-designed workspace required.

   The levels of vacancy in commercial and industrial floorspace are a measure of
   its attractiveness to users. However, there may also be other factors involved.
   Property may be in excellent condition but lie vacant due to a lack of demand
   within the local economy.
It is likely that new build B1 workspace is more likely to provide a better quality
workspace than a refurbished workspace. Providing modern, suitable workspace
facilities is essential to establishing an environment in which business can flourish.
Workspace needs to be equipped for with high-speed internet access and
environmental features that reduce running costs and access for people of all
abilities. However, some businesses will be looking for refurbished space in
character buildings as part of their business image.

The review of mixed-use developments has therefore been categorised according to
whether the proposals involved new build or refurbishment.

The extent to which the developments reviewed through the case studies have been
let or sold will provide a measure of their success and attractiveness although
external factors will have also played a role.

The design of the workspace element in a mixed development scheme is likely to be
influenced by whether the developer considers the delivery of floorspace for
employment to be a key element of the project or whether it is necessary in order to
secure other objectives i.e. residential development.

5.6.2   Age of Commercial and Industrial Stock

The data on the age of commercial and industrial stock is provided by the Office of
the Deputy Prime Minister (ODPM). The information on commercial and industrial
floorspace published by the Office of the Deputy Prime Minister (ODPM) covers non-
domestic properties under four so-called 'bulk classes': retail, offices, factories and
warehouses. Offices include purpose-built office buildings, offices over shops, light
storage facilities and light industrial activities. Larger banks, building societies and
post offices containing substantial office space may also be included in this class.
Factories range from small workshops to very large manufacturing units. Some
industrial hereditaments where the rateable value is not primarily derived from
floorspace (for example iron and steel plants) are classed as non-bulk. Warehouses
include small storage units and depots up to very large distribution warehouses.

An approximation to the main groups of use classes is taken directly from the bulk
classes. That is:
• B1 – offices
• B2 – factories
• B8 – warehouses
B1(b) and B1(c) uses are mainly included in the factory bulk class. However it is not
possible to separate B1(a), B1(b) and B1(c) use classes. The assignment of use
classes is a rather uncertain process and there is a somewhat arbitrary distinction
between some use classes, such as A2 and B1(a) in the VOA data.
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Table 5.5 below shows the total floorspace by age for the categories covering B1
Offices, Research and Development, and Light Industry, B2 General Industrial and
B8 Storage and Distribution.

Table 5.5 shows the absolute figures for England and Wales, London and for
Hackney for six age bands from pre 1940 to 2001-2003. The absolute figures are
then expressed as percentages for the relevant bulk class i.e. office, factory and
warehouse.

The following table needs to be caveated with a warning about this missing data and
the impact that this could have on the conclusions. However, overall these figures
would appear to confirm the findings of the Hackney Employment Growth Options
Study that the majority of buildings are over 50 years of age.

Table 5.4
               Total floorspace by LAD and Age for Each Bulk Class
                                                                                     000s m2
                    Unknown Pre       1940-70 1971-80 1981-90 1991-         2001-03 All ages
                    Age     1940                              2000
ENGLAND & WALES
Office              5,760    27,699   18,154     10,944   16,943   14,632   5,240    99,373
Factory             19,570   54,020   72,606     30,720   28,195   16,927   3,078    225,115
Warehouse           7,132    24,410   38,961     26,885   26,109   21,595   8,171    153,264
Total               32,462   106,129 129,721 68,549       71,247   53,154   16,489   477,752


                    %        %        %          %        %        %        %        %
Office              17.7     26.1     14.0       16.0     23.8     27.5     31.8     20.8
Factory             60.3     50.9     56.0       44.8     39.6     31.8     18.7     47.1
Warehouse           22.0     23.0     30.0       39.2     36.6     40.6     49.6     32.1


LONDON
Office              1,726    8,268    5,626      2,655    5,082    4,016    1,489    28,861
Factory             922      4,030    3,666      906      1,037    459      92       11,112
Warehouse           643      3,671    3,962      2,624    2,770    1,353    1,008    16,030
Total               3,291    15,969   13,254     6,185    8,889    5,828    2,589    56,003


                    %        %        %          %        %        %        %        %
Office              52.4     51.8     42.4       42.9     57.2     68.9     57.5     51.5
Factory             28.0     25.2     27.7       14.6     11.7     7.9      3.6      19.8
Warehouse           19.5     23.0     29.9       42.4     31.2     23.2     38.9     28.6


HACKNEY
Office              *        213      126        20       75       64       *        543
Factory             *        336      123        20       18       *        *        506
Warehouse           *        212      106        30       27       6        *        403
Total                        761      355        70       120                        1,452



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Table 5.4
                  Total floorspace by LAD and Age for Each Bulk Class
                                                                                                       000s m2
                            Unknown Pre              1940-70 1971-80 1981-90 1991-           2001-03 All ages
                            Age     1940                                     2000
                            %       %                %       %       %       %               %         %
Office                      *            28.0        35.5     28.6      62.5        *        *         37.4
Factory                     *            44.2        34.6     28.6       15.0       *        *         34.8
Warehouse                   *            27.9        29.9     42.9       22.5       *        *         27.8
Source: Age of commercial and industrial stock: local authority level 2004, ODPM


5.6.3     Levels of Vacancy in Commercial and Industrial Property

The commercial and industry property vacancy statistics complied by the ODPM
include a list of the local authority areas with the highest vacancy rate. Table 5.7
shows that in the year 2003/2004 Hackney had the second highest vacancy rate in
the country. It is worth noting that vacancy rate in Hackney has been steadily
declining in contrast to the situation in some other local authorities.

    Table 5.5
             Local Authorities with Highest Vacancy Rates in 2003/04
             Local Authority        1998/99      1999/00     2000/01      2001/02       2002/03   2003/04

    1        Bracknell Forest       10           6           9            12            10        22
    2        Hackney                30           28          24           21            22        20
    3        Ealing                 12           18          18           19            18        18
    4        Slough                 12           10          13           14            17        18
    5        Manchester             21           22          22           21            16        17
    6        Hounslow               14           11          9            9             15        17
    7        Surrey Heath           6            6           4            5             18        17
    8        Wokingham              5            11          6            6             10        16
    9        Wear Valley            6            8           10           10            12        16
    10       Brent                  12           12          15           18            19        16
    11       Three Rivers           23           14          5            9             17        16


Source: Commercial and industry property vacancy statistics, ODPM

5.6.4     Success in Letting

The large majority of the case study properties listed in Appendix 1 had vacant units.
This may have been because the developments had only recently been completed
and the letting of the units was still under way. However, in some cases it was
evident that some units that had been completed some time ago and had never been
occupied. The discussions with developers confirmed this situation and Kingsland
Road was given as a location where this has happened with a number of properties.
124-128 Shacklewell Lane is a further example of a large area of commercial
floorspace that has remained boarded up since the completion of development. One
respondent explained that developers prefer to let all the floorspace to one tenant
rather than having to subdivide and find several tenants.

Developers have informed us that some of these units have been vacant for over
eighteen months. The evidence from the Black and Minority Arts Network premise

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audit suggests that there is no lack of demand for these units. Cost is the main
inhibiting factor.

Our research supports the view that small businesses are seeking floorspace at rents
which are significantly lower than the majority of newly built premises being marketed
in Hackney and affordability would therefore appear to be the key reason for the
current lack of demand for these units.

It was evident from discussions with developers and occupiers that there are other
factors that influence the letting of a property including:

        Access to facilities such as shops;
        Whether the building is located in a clean and safe area;
        Whether the location is convenient for staff to get to and has good public
        transport facilities;
        Close to customers / clients
        Parking for staff/customers

With regard to managed workspace, one prominent commercial workspace
developer achieves an average of 90% occupancy in their centres. In the view of the
developer, the popularity of the units provided was explained by the attractive
working environment which facilitated contact and exchange between tenants,
provision of central services and easy in easy out licence agreements.

5.6.5    Design

The majority of the mixed use case studies are developments that are primarily
residential. Many conform to the Hackney ‘layer cake’ design. No purely commercial
developments were included in the case studies that were considered in detail.

A key problem that emerged from discussions with developers is that in order to meet
the requirement to re-provide employment space on an employment site, large areas
of B1 space are often located on the ground floor and/or basement. This is the space
that is least attractive for residential development. The relatively long narrow plots
extending back from the street frontage tends to limit the potential for a high quality of
design, particularly due to restricted light.

The economics of developing the commercial floorspace and providing affordable
housing often means that much of the space is built to shell and core and then
boarded up.

The value of the B1 space is often considered to be nil by developers who do not
have any expectations of being able to let the space. This is typically the case where
the development is in a predominantly residential area, not well suited to pubic
transport and so of highly limited appeal to the market. To an extent this means that
spaces are built to a standard that is below the level at which there is a potential
demand. However, developers such as Investland Group Plc are offering fit out
packages to try and entice potential occupiers.

One workspace developer consulted considers the expectation that by providing
floorspace as part of the ‘layer cake’ and assuming it to provide an attractive
workspace is naïve. Without creating the right business environment in which
businesses can interact and be supported with appropriate amenities as part of the
process such development will struggle to succeed.

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5.7     Council Policies Affecting Workspace Supply

5.7.1   Borough Planning Policy

The Council’s adopted Unitary Development Plan (UDP) along with the London Plan
is the statutory planning framework for Hackney setting out the ‘strategic’ and more
detailed policies to guide the Council’s decisions on planning applications. The
changes to the planning system require a suite of documents to be produced which
will make up the Hackney Local Development Framework (LDF), and will
incrementally replace the UDP.

Hackney’s UDP is concerned with the retention of existing jobs, improving their
quality and creating new employment opportunities. These objectives are reflected in
the strategic employment policies in the UDP and the more detailed planning
policies.

5.7.2   New Planning Policy – South Shoreditch

The planning policy outlined in the South Shoreditch Supplementary Planning
Document approved in February 2006 includes the following key planning policies for
which are:

SSSPD 1.2 - Mixed uses

The Council will seek development which contributes to a mix of uses in the area.
The Council will ensure that there is a range of employment, housing and other
facilities, which are in easy reach of homes or places of work by walking, cycling or
public transport.

SSSPD 1.8 - An offer of jobs and a variety of employment sectors

The Council will encourage the attraction of investment to maintain competitiveness,
to encourage a wide range of economic activities and to provide jobs for local people
and initiatives to improve local employment and regional opportunities. The Council
will support businesses in a number of sectors such as the creative industries,
financial and professional services, and hospitality and catering. In addition, SMEs
normally demand small business premises suitable for a small workforce. The
SSSPD seeks to promote:

         The retention of employment land that is currently suitable for SMEs.

         The creation of suitable SME business premises in new developments.

SSSPD 2.1 - Employment Led mix of uses

The following principles will apply to promote employment-led mixed use in South
Shoreditch:

         The Council will normally resist proposals which result in the loss of
         employment land and premises through change of use and redevelopment;

         The Council will promote a mix of B1 employment and residential uses
         (specific mix is identified in sub-district guidance); and

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           The Council will require 50% of new employment floorspace to be suitable
           for SME space.

SSSPD 10.1 Edge of City employment-led mixed use

In the Edge of City sub-district the following principles apply:

•     In all cases there is a presumption against the loss of employment;
•     The Council will promote mix of uses with 70% employment, of which any new
      employment use will provide 50% SME space, and 30% residential in the Edge of
      City sub-district;
•     Where the B1(a) use is not suitable through design, size or accessibility for SME
      use the Council will require a cross subsidy towards provision of SME
      accommodation in South Shoreditch (this may be achieved through a planning
      obligation which will be pooled for this purpose);
•     In exceptional circumstances where the developer can identify a particular end
      user for the employment element with a demonstrable need for a single use
      building, the Council may accept the appropriate level of residential off site
      elsewhere in South Shoreditch.
•     The Council will seek 50% affordable housing above a 10 unit threshold.

SSSPD 11.1 Leonard Circus and SSSPD 12.1 Shoreditch Triangle mixed use

The requirements for these sub areas change to a mix of uses with 50% of the total
quantum of floorspace as B1 employment and 50% of the total quantum of
floorspace as residential. As with the Edge of City sub district, there is a requirement
in these sub districts for 50% of the new employment floorspace to be suitable for
SME space.

5.8      Planning Policies Related to B1 Re-provision

Specialist commercial workspace operators require flexibility to configure workspace
in line with the needs of the market and at a suitable critical mass. However, any
policy which allows flexibility will be used to the advantage of the developer.

The Chesterton’s report dated 2002 on how live/work developments have come
forward in recent years. Chesterton’s concluded that: “Live/work units are often
‘back-door’ entry to gaining permission for residential use”. The research showed that
live/work, ‘is more to do with achieving residential land values than it has to do with
any kind of genuine working environment.’

The required flexibility, will in most cases, be achieved by separating the B1 solution
from residential development, either by getting the B1 provision funded off-site, which
is not the current practice in Hackney, or by taking over control of the B1 workspace
by way of a legal agreement(see proposals in Section 11.1.1).

Under Circular 05/05 guidance in planning obligations provided by the ODPM,
funding generated from Section 106 agreements has to relate in scale and kind to the
proposed development and obligations must also be directly related to proposed
developments. For example, there should be a functional or geographical link
between the development and the item being provided as part of the developers’
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obligation. The Circular provides guidance on pooling developer contributions in
cases where individual developments will have some impact but not sufficient to
justify the need for a discrete piece of infrastructure. The endorsement of pooling of
developer contributions provides the opportunity to secure incremental contributions
towards larger scale infrastructure requirements which otherwise might have been
unachievable.

Comments in a response to the draft SPD for Shoreditch stated that “The Council
cannot impose a blanket requirement which compels developers to provide
contributions to SME accommodation in lieu of on-site provision. One respondent
suggested that this is contrary to the texts set out in circular 05/05 “Planning
Obligation” which requires that contributions be fully and reasonably related to the
development”.

One respondent indicated that such policies are likely to be seriously challenged on
the basis that, where offsite B1 provision is to be created therefore, this must be
targeted within the locality of the residential development in question so that it relates
to a relevant economic or community need. In addition, the term SME needs to be
treated with care. Having said that it needs to be recognised that such contributions
will only have impact if channelled into higher order employment areas where there is
the greatest scope for creating jobs. Such arrangements will be less contentious if
contributions can be directed to projects as close as possible to the original scheme,
but it is acknowledged that this may not always be appropriate. The focus should be
on meeting the needs of small and micro businesses of between 1 and 25
employees.

5.9    Workspace Development Economics

Discussions with developers have revealed that the provision of B1 space is largely
uneconomic, even where such space is included in mixed use developments. Most
workspace development in Hackney is driven by the high values generated by
residential development. Where B1 space has been provided as part of a mixed use
scheme however, this is normally left as a single open plan area for which there is
limited demand. For many developers, it is not economic to invest in subdivision.
Many would rather wait and see if the ‘golden tenant’ appears i.e. one who will rent
the entire space. Moreover it is a costly process marketing a number of small units.
One developer indicated that B1 space had remained empty in developments on
Kingsland Road for several months before a decision was taken to subdivide.

In many cases the regeneration of workspace is not normally viable without some
element of cross-subsidy because rental levels obtainable are below the required
level. This is often because of the relatively high cost of refurbishment compared to
new build, though it may also reflect the acquisition cost of land where high hope
values have been generated.

One prominent commercial workspace developer believes that this needs to be
acknowledged. Current requirements seeking re-provision of employment space
together with a requirement for affordable housing is undermining projects that would
otherwise contribute to the regeneration of run down areas. For this reason the
developer in question has not purchased any properties in Hackney for the last two
years. Appendix 2 provides a case study of the economics of development of
Hornes House, showing that in this case the development of B1 space proved
uneconomic. In this case, it was assumed that in a depressed market rent levels
would be £10 per square foot. At the same time construction costs have increased. It

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was assumed that the B1 space of 11,751 sq ft (1,092 sq m) gross internal
floorspace would be provided to a shell finish, with all services available to the unit. In
terms of capital values, a capitalisation yield of 7.5% was assumed. With deductions
for purchasers acquisition costs, a capital value rate of £126 per square foot and a
gross development value of £1,480,626 was estimated. The developer’s return was
estimated at 15%. It was calculated that the B1 space would show a loss in terms of
site value of over £600, 000.
Factors that could have turned this scheme into profit would have been the
achievement of higher development values as a function of higher rental levels or
capital values. (This scheme only projected achieving £10 per sqft). Schemes in
areas where there is higher demand such as Shoreditch can achieve higher rental
levels (i.e. £16-20 sqft – see Table 6.2 below).
The other factor is the land acquisition cost. Clearly there is evidence that land
values are established by residential land uses and workspace uses cannot compete.
Paragraph 5.89 of the Employment Options Study states “land values relating to
office or employment development are unlikely to make the redevelopment of
floorspace a viable option (in normal market conditions).” The hope values
associated with the prospect of converting employment land to residential play a part
in this equation. Where employment land is acquired in the false expectation of
receiving approval for residential and this is not successful, workspace schemes do
not get built. Pragmatic approaches may be needed to ensure that identifiable
planning benefits are achieved and that workspace sites are developed or
redeveloped.
5.10   Development Practices

Within Hackney, successful workspace development has either been undertaken by
not-for-profit organisations or by a small number of developers with specialist
experience in catering for the micro and small business market. However, most
developers within Hackney have been predominantly interested in residential
development.

There was a preponderance of live/work development between 1999 and 2004 which
sold well until this was curtailed following the revocation of the Council’s
Supplementary Guidance Note on Live/Work Developments on 22nd September
2003. These and other mixed use developments have been intended as a way of
providing substitute B1 space in mixed area environments. However, in practice,
much of the B1 space has proved uneconomic and space has been marketed at
levels beyond what the business market can afford – even in areas well served by
public transport.

The case study example of Hornes House in Ramsgate Street confirms this.
Developers have advised that the reason for providing the B1 workspace is purely to
meet the requirements of planning policy in terms of re-provision. The prevailing view
amongst developers is that there is an over supply of this type of space and that a
more flexible approach to workspace provision is required.

The driver for development remains the high value of residential, notwithstanding
Hackney’s withdrawal of the SPG for Live-work. However, the twin requirement of
providing B1 workspace and an element of affordable housing does appear to mean
that the viability of schemes in less desirable locations is marginal and some
schemes are not being progressed. The review of mixed use developments revealed
that approximately 50% of the floorspace proposed remains unbuilt. However, some

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schemes have only recently received approval so this proportion could change over
time.

There is evidence that the workspace that has been constructed is not being
occupied. We have concluded that this is because prevailing market rents are too
high. This may in some cases be in the hope that failure to attract suitable occupants
may justify reversion to residential. There are also many potentially available areas of
floorspace which are vacant but are not being actively marketed.

5.11    Conclusions on Factors Affecting Supply

i)      Managed workspace and business incubators appear to be successful. The
        Accelerator incubator is very popular. However, the economics of
        development means that in most cases some element of cross subsidy from
        residential development to be financially viable. An exception to this is the
        Accelerator.

ii)     Two thirds of the available floorspace in Hackney is in South Shoreditch.
        Hackney Wick, Hackney Central and Kingsland Basin/Kingsland Road
        account for the other main concentrations of available floorspace, each
        accounting for between 65,000-90,000 sq ft (6,040 – 8,364 sq m) available in
        each of these areas. Hackney Wick also contains significant amounts of
        vacant land.

iii)    A significant proportion of completed and proposed commercial floorspace
        has been linked to proposals where the primary objective of the developer
        has been to develop more profitable live-work units. The Review of Live Work
        Policy in Hackney report confirms that developers have seen the
        development of live/work units as a means to ‘facilitate higher value uses than
        “normal policy” would allow’. Live-work has been used to get round
        affordable housing and employment retention policies.

iv)     The policy of live-work does not appear to have made a significant
        contribution to the provision of workspace for SMEs. However, developers
        believe that it could still have played a role in providing start up premises,
        particularly for the creative industries sector. However, none of the
        developers interviewed were able to expand on how a live/work policy could
        operate successfully.

v)      The majority of proposals for mixed use development are concentrated in
        South Shoreditch although a significant number are in locations outside the
        Defined Employment Areas.

vi)     In the opinion of developers, too much space is being built in the wrong
        locations. The key issue is one of quality not quantity.

vii)    The sizes of units available on the market are generally suitable for
        occupation by SMEs. Those that are not are large floor spaces that have not
        been subdivided. There is some evidence that the age of the stock of office,
        industrial and warehouse stock in Hackney is older than that for London, and
        England and Wales.

viii)   Many of the mixed use developments included in the review of planning
        applications have vacant units.

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ix)   Hackney has the second highest vacancy rate in commercial and industry
      property in the country. Although the levels of vacancy have been declining in
      recent years. However, not all of this is currently available and on the market.

x)    On balance rental levels outside the Shoreditch area appear to be low and
      the higher rental terms now sought in Shoreditch may be above the level of
      affordability for many SMEs.

xi)   The design of much of the commercial floorspace appears to conform to the
      Hackney ‘layer cake’ model. Examples of good design are difficult to find.
      However, CABE has cited the Hothouse Railway arches in Hackney as a built
      form that can commonly be adapted for workplaces. The new built element is
      currently used as one open plan office but is designed to enable later
      subdivision into several smaller units.




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  6.        PRICE AND AFFORDABILITY OF WORKSPACE

  6.1       Current Rental Levels and Freehold Sales Prices

  6.1.1     Prices of New Workspace Units

  On the basis of the evidence, prices for new build units were identified from the case
  studies (where available).

  Table 6.1 sets out a more detailed breakdown of the examples of new build
  properties.

TABLE 6.1
     Examples of Asking Prices and Rents for New Build Workspace Units
                   In Hackney Sub-Areas, February 2006
                                      Sales Price               Rents
                                      Sq ft                     Sq Ft
Shoreditch
2-27 Drysdale Street                  £199                      -
Britannia Walk                                                  £21
23-41 Warlock Road                                              £14
192-3 Shoreditch High Street                                    £20.18
Holywell Centre, Phipps Street, 1st                             £19.14
Floor

Kingsland Basin/Kingsland Road
254-288 Kingsland Road                £269                      -
297-301 Kingsland Road                £190                      £13
298-316 Kingsland Road                                          £15

Dalston
Shacklewell Lane, 4 Ming Building                               £8
18-24 Shacklewell Lane                                          £10

Hackney Central
23-47 Mare Street                     £165
Mare Street Studio
Ground Floor                                                    £6.50
1st Floor                                                       £4.00
Second Floor                                                    £8.00
Third Floor                                                     £8.00

Hackney Wick
35 Waterden Road                                                £4.59-6.72

  6.1.2     Prices of Second-hand Workspace Units

  Table 6.2 below sets out a profile of indicative asking rents and freehold sales prices
  for second-hand properties by type of use and quality across each of the main sub-
  areas of the borough, as provided by local commercial property agents who have
  been interviewed.




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Table 6.2
 Indicative Asking Rental Levels Prices for Workspace Across Hackney Sub-
                                Areas £/sq ft
Rents                           Shoreditch    Hoxton      Dalston    Stamford    Hackney   Hackney
                                                                     Hill        Central   Wick
Offices high quality 2nd hand    16-20         10 –15     8-10       8-10        7 -12     5-10
Offices older low cost                                                           6-8
Studio R & D                     12 - 18                  15
Flexible office/light industrial
Light industrial new             10 -11        5-6        5-6        5-6         5-6       5-6
Light industrial second hand                                                     7.5       7.5 - 9
high standard
Light industrial older low-cost                                                  5 -7
General Industrial new
General Industrial second-
hand
Storage and distribution         5-6           5-6        5-6        5-6         5-6       5-6
Source: Local Commercial agents
Note: Rental data was not provided for all categories

 Table 6.3
  Indicative Freehold Sales Prices for Workspace Across Hackney Sub-Areas
                                     £/sq ft
 Sales                              Shoreditch/Hoxton      Dalston         Hackney      Hackney
                                                                           Central      Wick
 Offices high quality 2nd hand     200-250                                 188
 Offices older low cost
 Studio R & D                      220-295
 Flexible office/light industrial                                          170
 Light industrial new                                       80             150
 Light industrial second hand      150-165
 high standard
 Light industrial older low-cost   165
 General Industrial new            165
 General Industrial second-hand    165
 Storage and distribution          165                      80
 Source: Local Commercial agents
 Note: Sales price data was not provided for all categories

6.2      Affordability Levels

With regard to affordability levels, evidence can be gleaned from a number of
sources.

         The Employment Growth Options Study undertaken by Atkins indicates the
         majority of cost-sensitive enterprises in Hackney are likely to be seeking
         premises at a rent of £8-£12 per sq. ft

         In capturing enquiries from prospective occupants, Invest in Hackney seek to
         get an indication of the enquiries budgets for accommodation. This shows
         that whilst some enquirers in high value activities such as professional and
         business services, fashion design and media expect to pay up to £25-30 per
         sq ft, some businesses, such as those in the performing arts, artistic and
         social support sectors, can only afford £10-12 per sq ft.




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       The Black and Minority Arts Network Premises Audit found that the price
       range that is considered the affordable rate for premises in the borough is
       between £7.50 and £15.00.

       Space developed and marketed by not for profit workspace operators such as
       Space Studios, ACME and ACAVA and a number of independent charitable
       organisations each of whom specialise in providing artist studios, is typically
       priced at between £7 and £12 per sq ft.

Overall, this suggests that the rents affordable by cost sensitive business activities
would normally fall within a range of between £7 and £12 per sq ft. This would
indicate that in areas within the borough outside South Shoreditch, asking rents are,
in fact affordable. However for cost sensitive businesses seeking a base in
Shoreditch or Hoxton, this indicates a sharp difference between affordability and
price.

The above asking rental data suggest that the minimum threshold rent for new build
office development in a prime area where development costs are not off-set by gains
for residential development is around £16-17 per sq ft or a freehold cost of £225 if
capitalised at 7.5%. This would also explain the limited amount of new build
workspace currently available in the areas outside of Shoreditch, where the costs of
B1 development are not met by market returns, unless offset by the gains from
residential development.

6.3    Minimum Development Costs

To assist with calculating the costs of a providing replacement employment
generating floorspace, Table 6.4 below sets out the costs excluding marketing,
partitioning, fit out, site acquisition, site preparation, servicing and possible abnormal
costs, for the construction or refurbishment of the following range of alternative
workspace scheme options.

      New Build
      Refurbishment, Old Industrial (i.e. Victorian)
      Refurbishment, modern (i.e. 20th Century) vacant offices
      Industrial New Build

The construction costs quoted are taken from the SPONS Architects and Builders
Price Book, 2006.




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Table 6.4

    Indicative Unit Costs For Construction or Refurbishment of Alternative Floorspace Options

                                         Construction Costs
                        Uses             SPONS 2006 Cost Base Assumptions             Range of Development     Median           Median Cost
                                                                                      Costs per Sqm £s         Cost per         per Sqft £s
                                                                                                               Sqm £s

New Build               Offices / Studios Laboratory Offices and Workshops                   1040       1310          1175              109
Refurbishment, Old Offices / Studios Major refurbishment including developers                1100       1600          1350              125
Industrial Building                  finish, GIFA; Central London


Refurbishment,          Offices          Medium refurbishment including developers            700       1100              900            84
Modern Vacant                            finish, GIFA; Central London
Offices
New Build Industrial Industrial/storage Economical shell and core with heating only           490        850              670            62


Source: SPONS Architects and Builders Price Book, 2006.




            For office/studio use, average costs can range from £84 sq ft (£900 sqm) for
            refurbishment of modern offices to medium standard, to £109 sq ft (£1175 sqm) for
            new build and £125 (£1350 sqm) for refurbishment of an old industrial building.
            Costs of new build light industrial work out at around £62 per sqft (£670 sqm).

            The costs of refurbishment can vary considerably and are more often than not much
            higher than new build. The limited number of refurbishment schemes currently in the
            pipeline is no doubt a reflection of this.

            It should also be noted that costs of partitioning can vary according to the unit sizes
            involved, i.e. schemes with smaller units will cost more. For these reasons the
            calculation of development costs has to be made on a site specific, case-by-case
            basis. The capacity for estimating site specific development costs would need to be
            built into the implementation arrangements.

            There would also be a requirement to secure contributions for the employment land
            elsewhere in the Borough on which to build alternative workspace that needs to be
            acquired to compensate for that lost due to residential development. This, we
            suggest, should be based on similar value of the land being taken out of employment
            use in a given scheme.

            A robust planning policy framework committed to retaining employment land and
            floorspace (no net loss presumption) could help curtail developers’ expectations
            about building housing on employment land. This does, however, need to be justified
            on the basis of a clear assessment of market demand and workspace needs on a
            localised basis.

            The strategic model, described in the following section, provides some indications on
            which parts of the borough such policies should be focused.




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7.       STRATEGIC DEMAND AND SUPPLY MODEL

7.1      Overview

This section sets out a strategic model for projecting future demand for small
business workspace, set against projected supply. The following aspects are
covered.

        Description of how the model has been developed and the evidence and
        assumptions used.

        Outcome of the demand assessment by sector, use and floorspace size.

        Assessment of demand by sub-areas.

        Basis of the assessment of comparative supply.

        Guidelines for Maintenance and updates of the model.

The ensuing sector (Section 8) sets out more detailed analysis of the demand and
supply projections, highlighting areas of shortfall or excess supply by use, size and
quality for the borough as a whole and in each of the main employment locations of
the borough.

7.2      Basis of the Model

7.2.1    Floorspace Requirements to Meet Future Employment Growth

In setting up the demand projection model, the following approach has been taken.

Taking the 2002 employment levels by sector, growth in jobs from 2006 – 16 have
been averaged to arrive at an annual projected job growth figure for each main
sector.

Employment densities in terms of floorspace ratio have been allocated to each broad
sector, based on figures set out in the English Partnerships floorspace ratio
guidance. These have been applied to the average annual job growth or decrease
figures provided by Atkins (in the Employment Growth Options Report, March 2006)
to arrive at an estimate of annual incremental floorspace requirements. (See Table
7.1). This indicates an annual increase in floorspace demand of just over 450,000
sqft per annum.




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                                                       Table 7.1
                                       Projected Net Floorspace Demand Growth
                                              (Annual Average 2006-2016)
                                                         Sq ft
                                                         Manufacturing Construction   Distribution   Transport/comms Banking and   Business        Other
                                                                                                                     Finance (1)   Services (1)    services       Total
Job Change by Sector 2006-11                                    -273          -393          1606              4164         1415            2748          -948     8319
Job Change by Sector 2011-16                                    -259          -274          1812              5499         1545            3000        -2267      9056
Total Job Change 2006-16 (10 years)                             -532          -667          3418              9663         2960            5748        -3215    17375
Average annual job change 2006-16                                 -53           -67           342              966           296             575         -322    1738


Floorspace ratio/employment density sqft (2)                     365           365            540              205           215             205          205
Floorspace Required through growth sqft                     -19345         -24455 184680                  198030          63640        117875        -66010     454415

            Notes:

            (1) Figures derived from Atkins Employment Growth options Study economic forecasts, applying a 34% & 66% split
            between banking and finance and real estate, renting and other business services business respectively. These
            proportions reflect actual employment levels as 2 digit SIC level.

            (2) Employment densities used are based on English Partnerships Employment Densities Full Guide, based on the
            following:

            Manufacturing             General industrial use
            Construction              General industrial use
            Distribution              General warehousing
            Transport/comms           General purpose offices
            Banking and Finance       City of London
            Business Services         General purpose offices
            Other services            General purpose offices

            7.2.2     Replacement Floorspace Demand for Relocations

            Account needs to be taken of the amount of floorspace that will actually be
            demanded when businesses move. This will be made up of the amount of floorspace
            currently occupied together with a share of the above increase (or reduction) in
            floorspace so far projected for those businesses which are expanding.

            These two elements need to be taken into account to reflect the total amount of
            floorspace in demand, because the locations, quality and size of units to meet this
            demand need to be planned for, given that newly taken up space will be on different
            sites in different places, regardless of the fact that the net impact on residual
            floorspace supply in absolute terms will be the same.

            An estimate has been made of total floorspace likely to be in demand due to
            relocation activity, based on the data and assumptions set out in relation to Table 7.2
            below. This relates to the amount required to replace existing floorspace, the
            expansion element being included in the demand growth projection above.

            7.2.3     Allowance for Exceptional Demand

            The above aspects of the strategic model (future floorspace requirements and
            replacement floorspace demand for relocations) is based fundamentally on macro-
            economic growth forecasts by broad sector matched with quantified estimates of
            such factors as relocation intentions, locational and site use preferences indicated
            from local business survey activity. Together, these will build up into a reasonable,

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illustrative picture of the relative amounts of excess floorspace supply or shortfalls by
use type, area, size and quality over the medium and long term, for most of the
borough.

Being based on broad sector forecasts, the model does not cater for exceptional
market trends such as a surge in inward investment demand into a particular part of
the borough.

In the case of South Shoreditch, where anecdotal research amongst commercial
property agents has indicated a surge of demand from design and media businesses,
demand levels are expected to be far greater than forecasted by the above methods.
In order to reflect this market factor an adjustment has been incorporated into the
strategic model to take account of these demand effects.

This adjustment has been made up of assumed exceptional demand as follows:

400 requirements of 1 – 500 sq ft (0.09 – 46 sq m) (assumed average: 350 sq ft or
33 sq m); this largely reflects the large demand for small managed workspace which
is unfulfilled

300 requirements for space of 501 – 1000 sq ft (47 – 93 sq m) (assumed average:
750 sq ft or 70 sq m)

50 requirements of 1001 – 2000 sq ft (93 – 186 sq m) (assumed average: 1500 sq ft
or 139 sq m).

These requirements would give rise to an exceptional demand of some 440,000 sq ft
per annum.

It is believed that the inclusion of this exceptional demand provides a move robust
picture of what is actually happening in the market, given the findings on demand
patterns described in Section 4 below.

7.2.4   Assumptions on Take up of Space by Sector and Use Class

Taking account of the predominant floorspace requirements of each sector as
identified from the Atkins Business survey, an attempt has been made to segment
this demand by type of B Class use as set out in the assumptions in Table 7.2 below.

                                                          Table 7.2

           Assumptions on Take Up Rates By Type and Use By Sector
                             Manufacturing Construction Distribution Transport/comms Banking and Finance Business Services Other services


        Offices                      5%         80%         55%              66%                  97%               45%           67%
        Light industrial            30%         10%           0%             30%                    1%                9%            8%
        Studio                       0%           0%          0%               0%                   0%              45%           20%
        General industrial          65%           0%          0%               0%                   0%                0%            0%
        Warehouse storage            0%         10%         45%                4%                   2%                1%            5%
        Total                     100%         100% 100%                   100%                 100%              100%           100%


These assumptions have been based largely on evidence on the locational
preferences indicated by sector from the Atkins Business Survey as set out below
(Table 7.3), together with evidence from the wider demand assessment undertaken.


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                                             Table 7.3
                          Locational Preferences of Hackney Businesses
                                Considering Relocation by Sector
                                                                             Preferred Location
                                         Manufacturing Construction   Distribution Transport/comms Banking and    Business    Other
                                %                                                                  Finance        Services    services
                         Occupying
                              Now
Dedicated industrial
area                           20%             56%              0%       16%              30%                5%         17%          8%   20%
Railway arch                   1%                0%             0%         4%               0%               0%          0%          0%   1%
Residential area               10%               4%           13%        12%                0%               0%         13%        12%    10%
Town centre/commercial
district                       24%               7%           25%        12%              30%              59%          15%        35%    24%
Mixed use area                 36%             33%            50%        32%              40%              23%          47%        35%    36%
Not specified                  10%               0%           13%        24%                0%             14%           8%        12%    10%

   Source: Atkins Business Survey 2003

   i)           Manufacturing

   The Atkins business survey found that 56% of manufacturers considering relocation
   would wish to be in dedicated industrial areas. The Atkins business survey also found
   that there are 29% of occupiers in mixed use areas who would like to be in dedicated
   industrial areas, of which part will be manufacturers. For this reason we have
   allocated the numbers who need to be in general industrial premises at 65%.

   Thirty three percent would like to be in mixed use areas and 4% in residential areas,
   suggesting that these are not heavy industrial operations and that they would require
   light industrial premises. We have therefore allocated 35% to this use.

   There is a small proportion (7%) who would wish to be in town centre areas,
   suggesting that some of these would wish to be in offices. We have therefore
   allocated 5% to this use.

   ii)          Construction

   The Atkins business survey (Table 2.2.) found most construction businesses wanted
   either mixed use, residential or town centre areas suggesting a strong requirement
   for offices. We have therefore allocated 80% of demand to this use, the rest being for
   light industrial or storage.

   iii)         Distribution

   At least 20% of businesses would like to be in a dedicated industrial area or a railway
   arch suggesting that at least this proportion require B8 space. A quarter do not
   appear to know what they require so, in the absence of any more detailed evidence,
   it has been assumed that about half of these would require the same. The evidence
   suggests that the remainder would require locations suitable for office activities.

   iv)          Transport and Communications

   29% undertake transport and haulage operations on site, so 30% has been allocated
   to light industrial use. Most other functions in the sector appear to be office based.



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v)      Banking and Finance

Eighty three percent of firms would wish to be in a town centre or commercial district
or mixed use, suggesting a strong preference for offices. However, given the number
of large firms in the sector the absolute quantum of floorspace is likely to be higher.
We have therefore allocated 97% to this use. There is a small part of the sector
which would require light industrial and warehousing, so we have allocated 1% and
2% respectively to these uses.

vi)     Business Services

Demand evidence indicates that a high proportion of enquiries is for design and
media activities from other business activities suggesting a predominant requirement
for either office or studio space. 45% has been allocated to each of these activities,
with a small allocation (9%) to light industrial and 1% for warehousing.

vii)    Other services

Many of these activities involve social and recreational activities suggesting that as
far as B Class uses are involved, offices would be predominantly favoured and to a
lesser extent studios. We have allocated 67% and 20% respectively to these uses.
There would be a smaller requirement for industrial premises for flexible uses.

7.3     Overall Demand Assessment

7.3.4   Projections Derived from Model

From the table below, it is estimated that some 190,000 sq ft (17,656 sq m) of space
would be demanded annually to replace the existing floorspace of these businesses.
As mentioned above this excludes the expansion space required which forms part of
the 450,000 sq ft (41,818 sq m) approx of additional space required annually to meet
projected annual job growth as set out in Table 7.1. Taken together, the relocation
replacement requirements and demand related to job growth would generate
demand for some 650,000 sq ft (60,403 sq m) of floorspace per annum. In addition to
this, with the exceptional demand of 440,000 sq ft (40,888 sq m) in South Shoreditch,
this takes the total demand assessment to 1,087,449 sq ft or approximately 101,055
square metres.




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                                                               Table 7.4

                                                          Projection of Annual
                                                   Floorspace Requirements by Sector
                                                    Notes           Manufacturing Construction Distribution Transport/comms Banking and   Business        Other           Total
                                                                                                                            Finance       Services        services

Local Business Activity Data
No. Business Units                                  (1)                    872           276         529              340          118         1678             687                4500
Hackney Annual Employment Growth                    (2)                     -53          -67         342              966          296          575            -322                1737



Relocation Replacement Floorspace Demand
Propensity to Relocate
Time horizon for considering relocation (months)    (3)                      60           60           60              60            60              60              60              60
Propensity to relocate                              (4)                    33%          35%         40%              42%          32%          34%             30%                 34%
Businesses wishing to relocate in Hackney area      (5)                    19%          25%         24%              20%          18%          49%             31%                 31%
Propensity to relocate in surrounding area          (6)                    33%          38%         24%              20%          41%          30%             27%                 30%
Factor for retention in Hackney                     (7)                     0%           0%           0%              0%            0%           0%              0%                 0%
Projected relocations retained in Hackney           (8)                    19%          25%         24%              20%          18%          49%             31%                 31%
Optimism bias adjustment                            (9)                    80%          80%         80%              80%          80%          80%             80%                 80%
Propensity to relocate in Hackney                   (10)                    5%           7%           8%              7%            5%         13%               7%                 8%
Demand snapshot timeframe (months)                  (11)                     12           12           12              12            12              12              12              12
Propensity to relocate                              (12)                1.00%        1.40%       1.54%            1.34%        0.92%         2.67%           1.49%                1.69%
Total Current Businesses Relocating                 (13)                   8.75         3.86        8.13             4.57         1.09        44.73           10.22               75.89


Floorspace requirements


Projected Mean existing space Employment Based (14)                       2533         2775        3061             7748         2102          2004             778                2506
Replacement space exc. growth                                           22158        10723        24872           35405          2286        89636             7953          193034


Employment Growth Demand
Share of Annual Employment Growth                   (15)              100.0% 100.0% 100.0%                      100.0%        100.0% 100.0% 100.0%                           100.0%
Floorspace ratio/employment density sqft            (16)                   365           365         540              205          215          205             205
Total incremental floorspace required sqft          (17)               -19345       -24455 184680                198030         63640 117875 -66010                          454415

Total Floorspace Required Excluding
Exceptional                                                               2813      -13732 209552                233435         65926 207511 -58057                          647449



Exceptional Demand                                  (18)
1-500 (Average 350 sq ft)                                     400                                                                          140000
501-1000 (Average 750 sq ft)                                  300                                                                          225000
1001-2000 (Average 1500 sq ft)                                 50                                                                            75000
2001-3000                                                                                                                                             0
3001-4000                                                                                                                                             0
4001-5000                                                                                                                                             0
5001-10,000                                                                                                                                           0
10,000-15000                                                                                                                                          0
Sub Total                                                     750              0            0           0                0            0 440000                        0      440000


Total Floorspace Required                                                 2813      -13732 209552                233435         65926 647511 -58057 1087449




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           The basis of the make up of this model is summarised below.

           1.        The number of business units has been used as a basis for forecasting sector-area shares of the
                     projected employment increases refer to Table 7.9.
           2.        Based on projections set out in Table 7.1 above
           3.        Propensity to relocate is based on the findings of the Atkins business survey which asked about
                     relocation intentions within the next 5 years
           4.        The Atkins Business Survey found that an average 34% of businesses were considering relocating
                     over the next five years.
           5.        Of these an average of 31% indicated an intention to relocate within Hackney itself. The Atkins
                     Business Survey identified that the proportions considering relocating at all and in Hackney varied
                     between sectors (ranging from 19% in Manufacturing to 49% in Business Services fro relocations
                     within Hackney).
           6.        As identified from the Atkins business survey. (30% were considering a surrounding area). Could be
                     adjusted by factor for retention in Hackney (see Note 7)
           7.        The model provides for an adjustment to project how much business could be discouraged from
                     leaving the borough if stronger business retention support were to be applied.
           8.        See Note 7
           9.        An optimism bias of 80% has been applied to take account of relocations which do not proceed. The
                     model enables this assumption to be adjusted.
           10.       Based on these assumptions, this would indicate that 8% of Hackney businesses would relocate
                     over a 5 year period, or 1.7% per annum. This would equate to just over 76 relocations per annum.
           11.       12 month demand snapshot adopted to annualise demand projections
           12.       As per Note 10. Five year projections have been divided by five to give annual projection.
           13.       This is the annual propensity to relocate times the number of business units in the sector.
           14.       The mean floorspace occupied by each sector has been calculated by taking average employment
                     by business unit for each sector and applying the same employment densities.
           15.       The share of total employment increase for the whole borough is weighted for each sector-area in
                     line with the analysis in Table 7.9 below.
           16.       See Note 2 accompanying Table 7.1
           17.       Derived by multiplying average annual employment growth by employment density ratios specified.
           18.       See explanation in section 7.2.3

           Applying these ratios (as per Table 7.2) to overall sector demand, made up of that
           required to meet employment growth and the replacement space for relocations and
           exceptional demand, would give a total annual demand for both replacement and
           additional floorspace of 1,087,000 sq ft (101,013 sq m) approx. Broken down by use,
           this indicates the following net annual requirements (as calculated in Table 7.5).

                          Offices                                          574906                                            52.87%
                          Studios                                          279769                                            25.73%
                          Light Industrial                                 123792                                               11%
                          General Industrial                                  1829                                            0.17%
                          Warehouse Storage                                107153                                             9.85%
                          Total Sq ft                                    1,087,449                                             100%
                          Total Sq m                                       101,055                                             100%

                                                  Table 7.5
                      Projected Net Floorspace Demand Growth by Sector and Use Class
                                         (Annual Average 2006-2016)
                                                    Sq ft
                                                         Manufacturing Construction Distribution   Transport/comms Banking       Business       Other
                                                                                                                   and           Services       services
                                                                                                                                                                        %
                                                                                                                   Finance                                     Total
Office                                                           141 -10986 115254                     154067 63948 291380 -38898 574906 52.87%
Studio                                                               0            0            0                0            0 291380 -11611 279769 25.73%
Light industrial                                                 844       -1373               0         70031          659 58276                 -4645 123792         11%
General industrial                                             1829               0            0                0            0              0              0   1829 0.17%
Warehouse storage                                                    0     -1373       94298               9337       1319           6475         -2903 107153 9.85%
Total All Uses (refer Table 7.4)                               2813 -13732 209552                      233435 65926 647511 -58057 1087449 100%


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           7.4          Overall Demand by Size of Unit

           The requirements for each B Class Use have then been applied to an assumed
           breakdown of floorspace demand by size band.

           This has been calculated from the proportion of total businesses occupying each
           floorspace size band identified from the Atkins Business Survey. These proportions
           have then been adjusted to provide an estimate of required aggregate space in each
           size band, taking the median of each size band (with the exception of 1 – 500 sq ft
           (0.09 – 46 sq m) where 350 sq ft (33 sq m) is considered more typical as this is
           believed to more closely reflect actual total demand patterns).

           These median size band figures have then been multiplied by the total number of B
           Class Users (4,500) and the proportions currently occupying each size band to arrive
           at a total floorspace occupancy figure for each size band. The total floorspace
           occupancy figure has then been divided into the total for all size bands and a
           percentage figure derived.

           However, this does not reflect the total picture, and adjustments need to reflect a
           different proportional breakdown of unit sizes according to where there is exceptional
           demand. In South Shoreditch, there is evidence of strong demand for workspace
           form businesses moving in from elsewhere. The standard model has been adapted
           to reflect these influences on overall borough demand. See Table 7.6.

                                                                    Table 7.6

                                       Assumptions on Floorspace Demand by Size
Other Hackney                                             Shoreditch                                                       All Hackney
                                                          Regular                      Exceptional
                  (1)     (2)   Median Total Sqft % (3)                Total Sqft %                        Total Sqft %    Total Sqft    %
1-500             31% 2626 350         284921    5%       1874         203329    5% 400              140000 343329   7.46% 628250        6.02%
501-1000          21% 2626 750         413595    7%       1874         295155    7% 300              225000 520155   11.30% 933750       8.95%
1001-2000         18% 2626 1500        709020    12% 1874              505980    12% 50              75000 580980    12.62% 1290000      12.36%
2001-3000         10% 2626 2500        656500    11% 1874              468500    11%                 0     468500    10.18% 1125000      10.78%
3001-4000         5%      2626 3500    459550    8%       1874         327950    8%                  0     327950    7.13% 787500        7.55%
4001-5000         3%      2626 4500    354510    6%       1874         252990    6%                  0     252990    5.50% 607500        5.82%
5001-10,000       5%      2626 7500    984750    17% 1874              702750    17%                 0     702750    15.27% 1687500      16.17%
10,000-15000      6%      2626 12500 1969500 34% 1874                  1405500 34%                   0     1405500 30.54% 3375000        32.34%
Total             100%                 5832346 100%                    4162154         750           440000 4602154 100%   10434500      100%
Notes:

                 (1)    As Identified from Atkins Business Survey
                 (2)    Number of small businesses in the Borough other than Shoreditch
                 (3)    Proportion of floorspace actually demanded based on Atkins figures
                 (4)    Number of small businesses in Shoreditch



           From this, a projection of annual demand for each sector of activity, use class and
           size band has been arrived at. The resulting output of this analysis is summarised
           below (Table 7.7). This reflects net demand taking account of the amount of
           floorspace vacated due to relocations or employment reduction in manufacturing and
           other services.



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                                                   Table 7.7

          Projected Net Floorspace Demand Growth by Sector, Use and Floorspace Size
                                  (Annual Average 2006-2016)
                                            Sq ft
                                            Manufacturing Construction Distribution Transport/comms Banking       Business       Other
                                       Size                                                         and           Services       services
                                % Size band                                                         Finance
                                band Median                                                                                                     Total
Offices
1-500 sqft                       6.02%        350            8       -661     6939           9276      3850         68622          -2342          85693
501 - 1000 sqft                  8.95%        750           13       -983 10314             13787      5723 109606                 -3481 134978
1001 - 2000 sqft                12.36%       1500           17     -1358 14249              19047      7906         45294          -4809          80346
2001 - 3000 sqft                10.78%       2500           15     -1184 12426              16611      6895         10068          -4194          40636
3001 - 4000 sqft                 7.55%       3500           11       -829     8698          11628      4826          7047          -2936          28445
4001 - 5000 sqft                 5.82%       4500            8       -640     6710           8970      3723          5437          -2265          21944
5001-10,000 sqft                16.17%       7500           23     -1777 18639              24916 10342             15102          -6291          60954
10-15,000 sqft                  32.34% 12500                45     -3553 37278              49832 20684             30203 -12581 121909
Total Requirement                 100%                    141 -10986 115254               154067 63948 291380 -38898 574906


Studio
1-500 sqft                       6.02%        350            0           0         0              0           0     68622            -699         67923
501 - 1000 sqft                  8.95%        750            0           0         0              0           0 109606             -1039 108567
1001 - 2000 sqft                12.36%       1500            0           0         0              0           0     45294          -1435          43859
2001 - 3000 sqft                10.78%       2500            0           0         0              0           0     10068          -1252           8816
3001 - 4000 sqft                 7.55%       3500            0           0         0              0           0      7047            -876          6171
4001 - 5000 sqft                 5.82%       4500            0           0         0              0           0      5437            -676          4761
5001-10,000 sqft                16.17%       7500            0           0         0              0           0     15102          -1878          13224
10-15,000 sqft                  32.34% 12500                 0           0         0              0           0     30203          -3756          26448
Total Requirement                                            0           0         0              0           0 291380 -11611 279769


Light industrial
1-500 sqft                       6.02%        350           51        -83          0         4216         40        13724            -280         17669
501 - 1000 sqft                  8.95%        750           76       -123          0         6267         59        21921            -416         27784
1001 - 2000 sqft                12.36%       1500         104        -170          0         8658         82         9059            -574         17159
2001 - 3000 sqft                10.78%       2500           91       -148          0         7550         71         2014            -501          9077
3001 - 4000 sqft                 7.55%       3500           64       -104          0         5285         50         1409            -351          6354
4001 - 5000 sqft                 5.82%       4500           49        -80          0         4077         38         1087            -270          4902
5001-10,000 sqft                16.17%       7500         136        -222          0        11326       107          3020            -751         13616
10-15,000 sqft                  32.34% 12500              273        -444          0        22651       213          6041          -1502          27232
Total Requirement                                         844      -1373           0        70031       659         58276          -4645 123792


General industrial
1-500 sqft                       6.02%        350         110            0         0              0           0              0              0       110
501 - 1000 sqft                  8.95%        750         164            0         0              0           0              0              0       164
1001 - 2000 sqft                12.36%       1500         226            0         0              0           0              0              0       226
2001 - 3000 sqft                10.78%       2500         197            0         0              0           0              0              0       197
3001 - 4000 sqft                 7.55%       3500         138            0         0              0           0              0              0       138
4001 - 5000 sqft                 5.82%       4500         106            0         0              0           0              0              0       106
5001-10,000 sqft                16.17%       7500         296            0         0              0           0              0              0       296
10-15,000 sqft                  32.34% 12500              591            0         0              0           0              0              0       591
Total Requirement                                        1829            0         0              0           0              0              0      1829


Warehouse storage
1-500 sqft                       6.02%        350            0        -83     5678             562        79         1525            -175          7587
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                                                      Table 7.7

         Projected Net Floorspace Demand Growth by Sector, Use and Floorspace Size
                                 (Annual Average 2006-2016)
                                           Sq ft
                                               Manufacturing Construction Distribution Transport/comms Banking    Business   Other
                                          Size                                                         and        Services   services
                                   % Size band                                                         Finance
                                   band Median                                                                                          Total
501 - 1000 sqft                     8.95%        750            0       -123     8438             836      118       2436        -260     11445
1001 - 2000 sqft                   12.36%       1500            0       -170 11658              1154       163       1007        -359     13453
2001 - 3000 sqft                   10.78%       2500            0       -148 10167              1007       142         224       -313     11078
3001 - 4000 sqft                    7.55%       3500            0       -104     7117             705      100         157       -219      7755
4001 - 5000 sqft                    5.82%       4500            0        -80     5490             544        77        121       -169      5982
5001-10,000 sqft                   16.17%       7500            0       -222 15250              1510       213         336       -469     16618
10-15,000 sqft                     32.34% 12500                 0       -444 30500              3020       426         671       -939     33235
Total Requirement                                               0     -1373 94298               9337      1319       6475      -2903 107153


Total
1-500 sqft                          6.02%        350         169        -827 12617             14055      3969 152494          -3496 178982
501 - 1000 sqft                     8.95%        750         252      -1229 18752              20889      5899 243570          -5195 282938
1001 - 2000 sqft                   12.36%       1500         348      -1698 25907              28859      8150 100654          -7177 155043
2001 - 3000 sqft                   10.78%       2500         303      -1481 22593              25168      7108      22373      -6259      69805
3001 - 4000 sqft                    7.55%       3500         212      -1036 15815              17618      4975      15661      -4382      48863
4001 - 5000 sqft                    5.82%       4500         164        -800 12200             13591      3838      12081      -3380      37695
5001-10,000 sqft                   16.17%       7500         455      -2221 33889              37752 10662          33559      -9389 104707
10-15,000 sqft                     32.34% 12500              910      -4442 67779              75504 21323          67119 -18778 209415
Total Requirement                                           2813 -13732 209552               233435 65926 647511 -58057 1087449



        7.5        Assessment of Demand by Sub-Areas

        Projections have also been undertaken based on a sub-area breakdown covering the
        following zones of the borough.

              South Shoreditch
              Kingsland Basin/Kingsland Road
              Dalston
              Hackney Central
              Hackney Wick
              Other main employment areas
              Rest of the borough
              All Hackney

        In order to project demand for B Class properties, Experian were commissioned to
        provide a breakdown of the number of VAT registered businesses according to the
        above areas. These each covered a slightly broad postcode based area down to the
        first digit after the main postcode, approximating to each of the areas in question.

        Across the whole of the borough this database identified some 7,579 businesses. Of
        these, businesses within the agriculture, electricity, retail, hospitality, education
        services, social services were excluded to identify 4,700 most likely to represent B
        Class uses. Of these, 4,500 small businesses were identified within the relevant
        sectors.


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               A summary of the number of businesses for each sub area is provided in the table
               below.


                                                               Table 7.8
                                              B Class User Business Units Sector and Area
                                                        Hackney Borough, 2006


                                                                                                                            Banking and
                            Manufacturing          Construction            Distribution            Transport/Comms          Finance            Business Services Other services               Total
South Shoreditch
                                            401                       50                      74                      133                 28               948               240              1874       42%
Kingsland Basin/Kingsland
Road                                        132                       32                      51                       42                 12               307               110               686       15%
Dalston
                                              75                      23                      72                       41                 17               131                84               443       10%
Hackney Central
                                              87                      13                      48                       30                  9               113                57               357        8%
Hackney Wick
                                            131                       38                    104                        37                  6                 11               48               375        8%
Other Main Employment
Areas                                         54                      23                     56                        17                  2                55                38               245        5%
Rest of Borough                                                       97                    124                        40                 44               113               110
                                                                                                                                                                                               528       12%
All Hackney                                                                                                                                                                                             100%
                                            872                     276                     529                       340             118                1678                687              4500
               Source: Experian


               The numbers of business units in each sector have been used within the model to
               project replacement floor space demand for relocations.

               Taking the number of business units in each sector as an indicator, the relative share
               of total borough employment growth by sector has been allocated to each sub-area,
               based on the figures drawn from the Atkins Employment Study (see Table 7.8
               above).


                                                        Table 7.9
                                 Projected Annual Floorspace Demand by Sector and Area
                                                    Hackney Borough
                                                                                                                                  Banking and
                                            Manufacturing         Construction            Distribution       Transport/Comms      Finance                Business Services   Other services
South Shoreditch
                                                        1291                  -2484                  29334               91279                 15625              557240              -20259           672027
Kingsland Basin/Kingsland Road
                                                            433               -1594                  20127               28929                  6724               37971                -9288           83302
Dalston
                                                            242               -1136                  28502               28231                  9493               16192                -7081           74444
Hackney Central
                                                            276                  -644                19063               20551                  5011               13934                -4819           53371
Hackney Wick
                                                            427               -1898                  41272               25438                  3362                 1413               -4065           65948
Other Main Employment Areas
                                                            173               -1136                  22209               11672                  1121                 6828               -3191           37675
Rest of Borough
                                                             25               -4815                  49045               27533                 24590               13934                -9288          101024
All Hackney
                                                        2867               -13707                  209552              233633                  65926              647512              -57991          1087791


               Taking these two components of demand together, Table 7.9 above sets out the
               profile of projected annual floor space demand by sector for each main employment
               sub area in Hackney (Figures do not exactly match those in Table 7.7 due to
               rounding related to the area profiles built up from complex aggregated formulae.




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7.6   Floor space Availability

The snapshot survey of available workspace set out in Table 5.2 provides the basis
for comparison with projected demand. A factor of 1.33 has been used to reflect an
annual down rate to convert the current snapshot to an estimated figure for property
of each type becoming available each year (See Appendix 4 (Strategic Model) and
Section 8.1 and 8.2 below). This is based on an assumption that each property will
remain on the market for an average of 9 months and that where properties are taken
up in less than this period, others of the same type and size will appear to replace
them in the stock of supply as part of the regular market churn process. This could be
refined through further research.

7.7    Guidelines for Maintenance and Updates of the Model

Updating these projections using the developed model will require the following
inputs.

       An update of the number of business units in each sub-area of the borough
       Periodic updates of sector based employment projections
       An updated snapshot survey of floorspace currently being marketed across
       the borough, broken down by size, quality and area.
       Periodic reviews of demand levels and sources from agents and workspace
       developers and operators.

The assumptions affecting propensity to relocate, average floorspace demand by
sector, allocation of demand by use and churn rate can be updated through periodic
business surveys and property market analysis.

The assumptions that have been used to develop these projections are based on our
best judgement, based on data which has been generated from existing research.
Opinions can of course vary as to the suitability of these assumptions. Hackney
Borough Council have, however, been provided with a copy of the spreadsheets
making up the strategic model to enable alternative assumptions and any updated
data to be inserted where this may be found to be appropriate.




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8.           AREAS OF MISMATCH IN SUPPLY AND DEMAND

8.1          Overall Comparison of Floorspace Supply and Demand

The overall profile of supply set against projected demand is set out in Table 8.1.

                                                  Table 8.1

     Overall Comparison of Projected Annual Floorspace Supply and Demand in
                                     Hackney

                                                        Sqft
                                                                B1c        B2          B8
                                B1a            B1b              Light      General     Warehousing
Use                             Offices        Studio           Industrial Industrial* and Storage Total
Estimated Annual Supply


1-500 sqft                             11056             4503          399          0         4190           20148
501 - 1000 sqft                        20707            14453         7202          0             0          42362
1001 - 2000 sqft                      151484            70470        68140          0             0         290094
2001 - 3000 sqft                       73747            42459        47293          0             0         163500
3001 - 4000 sqft                      101500            16596        43782          0             0         161878
4001 - 5000 sqft                       65723            24565        52844          0             0         143132
5001-10,000 sqft                      140690            33793        82880          0             0         257363
10-15,000 sqft                         29835        32022            79656          0            0          141513
TOTAL                                 594743       238861           382197          0         4190         1219990


Projected Demand
1-500 sqft                             85693            67923        17669        110         7587          178982
501 - 1000 sqft                       134978       108567            27784        164        11445          282938
1001 - 2000 sqft                       80346            43859        17159        226        13453          155043
2001 - 3000 sqft                       40636             8816         9077        197        11078           69805
3001 - 4000 sqft                       28445             6171         6354        138         7755           48863
4001 - 5000 sqft                       21944             4761         4902        106         5982           37695
5001-10,000 sqft                       60954            13224        13616        296        16618          104707
10-15,000 sqft                        121909        26448            27232        591        33235          209415
TOTAL                                 574906       279769           123792       1829       107153         1087449



Excess/Shortfall


1-500 sqft                            -74637        -63420          -17270       -110         -3397        -158834
501 - 1000 sqft                      -114271        -94114          -20582       -164        -11445        -240576
1001 - 2000 sqft                       71138         26611           50981       -226        -13453         135051
2001 - 3000 sqft                       33111            33643        38216       -197        -11078          93695
3001 - 4000 sqft                       73055            10425        37428       -138         -7755         113015
4001 - 5000 sqft                       43780            19804        47942       -106         -5982         105437
5001-10,000 sqft                       79736            20569        69264       -296        -16618         152656
10-15,000 sqft                          -92074            5575     52425        -591        -33235         -67902
TOTAL                                     19837        -40907     258405      -1829        -102964         132542
* Agents do not tend to separate out B1 light industries and B2 uses when marketing purposes, the same being
largely true for B8 uses too.



In broad terms, this Table 8.1 indicates an annual supply of 1,200,000 sq ft (111,514
sq m) of available space, set against a demand of 1,087,000 sq ft (101,013 sq m)

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with an overall excess supply of 132,540 sq ft (12,317 sq m). Within this broad
picture of over supply, there are some major areas of mismatch.

Table 8.2 sets out an analysis of supply and demand and by use, size and quality of
floorspace.

Using some very broad assumptions as to the quality of space demanded by
businesses of different sizes, a comparison can be made between the demand and
available supply. The assumptions affecting the proportion of business users in each
B class who would require new, good quality or lower cost second hand space is set
out in Table 8.2 under the heading: “Assumed Demand by Quality”. This is based on
the broad assumption that the larger the business, the more likely they are to
demand new or high quality second hand space, particularly with offices and studios
given that such businesses will be better established and more concerned about
image in comparison with smaller firms. Future versions of the model could benefit
from further research in this area.

Based on these assumptions, Table 8.2 indicates that the mismatches of supply over
demand by quality of space are particularly apparent amongst office users, who
would, under the assumptions made, demand new office space and amongst large
users of studio space. There would also be relatively minor shortages of high quality
space amongst industrial users.




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Table 8.2

                   Overall Comparison of Floorspace Supply and Demand in Hackney by Use, Size and Quality of Floorspace
                                                                  Sqft
                              Use
                              B1a                                                   B1b                                 B1c                                                            B2
                              Offices new Offices       Offices        Sub Total    Studio/R&D Flexible     Sub Total   Light            Light            Light            Sub Total   General General Sub Total       B8
                                          second-hand older low-                                                        Industrial       Industrial       Industrial                   industrial industrial           Warehousing
                                          high standard cost                                                            new              second-          older low-                   new        second-              and Storage
                                                                                                                                         hand high        cost                                    hand
                                                                                                                                         standard                                                                                    Total

Annual Supply


1-500 sqft                             0      10230          826            11056         1736       2768        4503                0         399                     0         399          0       0            0         4190              20148
501 - 1000 sqft                        0      13112         7594            20707      10055         4398       14453                0        4913               2289          7202           0       0            0             0             42362
1001 - 2000 sqft                       0     107930       43555            151484      40078       30392        70470                0      31106              37034          68140           0       0            0             0            290094
2001 - 3000 sqft                       0      46702       27046             73747      18269       24190        42459                0      23697              23597          47293           0       0            0             0            163500
3001 - 4000 sqft                       0      68665       32835            101500         2600     13996        16596         4820          13938              25024          43782           0       0            0             0            161878
4001 - 5000 sqft                 12398        41738       11587             65723            0     24565        24565                0      35385              17459          52844           0       0            0             0            143132
5001-10,000 sqft                       0      77790       62900            140690            0     33793        33793       17334                     0        65546          82880           0       0            0             0            257363
10-15,000 sqft                         0      16315       13519             29835      17596       14427        32022                0      18987              60669          79656           0       0            0             0            141513
TOTAL                            12398       382483      199862            594743      90334      148528      238861        22154 128425                     231618 382197                    0       0            0         4190            1219990


Projected Demand by Quality
1-500 sqft                          4285      68554       12854             85693      13585       54339        67923          883            9718               7068         17669           6    105         110           7587             178982
501 - 1000 sqft                     6749     107982       20247            134978      21713       86854      108567          1389          15281              11114          27784           8    155         164         11445              282938
1001 - 2000 sqft                    8035      64277         8035            80346         8772     35087        43859         2574            9437               5148         17159          34    192         226         13453              155043
2001 - 3000 sqft                    4064      32509         4064            40636         1763       7053        8816         1362            4992               2723          9077          30    168         197         11078               69805
3001 - 4000 sqft                    5689      21334         1422            28445         1543       4628        6171         1271            3812               1271          6354          28    110         138           7755              48863
4001 - 5000 sqft                    6583      15360                0        21944         1428       3332        4761         1471            2941                490          4902          32      75        106           5982              37695
5001-10,000 sqft                 18286        42668                0        60954         3967       9257       13224         4085            8169               1362         13616          89    207         296         16618              104707
10-15,000 sqft                   48764        73145                0       121909      10579       15869        26448       10893           13616                2723         27232         237    355         591         33235              209415
TOTAL                           102454       425831       46621            574906      63350      216418      279769        23927           67968              31898 123792                 462   1367       1829         107153             1087449



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Table 8.2

                   Overall Comparison of Floorspace Supply and Demand in Hackney by Use, Size and Quality of Floorspace
                                                                  Sqft
                           Use
                           B1a                                               B1b                                 B1c                                                 B2
                           Offices new Offices       Offices    Sub Total    Studio/R&D Flexible     Sub Total   Light        Light        Light         Sub Total   General General Sub Total     B8
                                       second-hand older low-                                                    Industrial   Industrial   Industrial                industrial industrial         Warehousing
                                       high standard cost                                                        new          second-      older low-                new        second-            and Storage
                                                                                                                              hand high    cost                                 hand
                                                                                                                              standard                                                                           Total




Excess/Shortfall


1-500 sqft                     -4285       -58324      -12028       -74637     -11849      -51571       -63420         -883       -9319          -7068     -17270           -6    -105      -110        -3397            -158834
501 - 1000 sqft                -6749       -94870      -12652      -114271     -11659      -82455       -94114       -1389      -10368           -8825     -20582           -8    -155      -164       -11445            -240576
1001 - 2000 sqft               -8035       43653       35520         71138      31306        -4695       26611       -2574       21669          31886       50981          -34    -192      -226       -13453            135051
2001 - 3000 sqft               -4064       14193       22982         33111      16506       17137        33643       -1362       18704          20874       38216          -30    -168      -197       -11078             93695
3001 - 4000 sqft               -5689       47331       31413         73055         1057       9367       10425         3549      10126          23753       37428          -28    -110      -138        -7755            113015
4001 - 5000 sqft                 5815      26378       11587         43780       -1428      21233        19804       -1471       32444          16969       47942          -32     -75      -106        -5982            105437
5001-10,000 sqft             -18286        35122       62900         79736       -3967      24536        20569       13249        -8169         64185       69264          -89    -207      -296       -16618            152656
10-15,000 sqft               -48764        -56830      13519        -92074         7017      -1442        5575      -10893         5371         57946       52425         -237    -355      -591       -33235             -67902
TOTAL                        -90056        -43348     153241         19837      26983      -67891       -40907       -1773       60457        199720 258405               -462   -1367     -1829     -102964             132542




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8.2     Analysis of the Strategic Model: Matches and Mismatches by Size and
        Availability of Unit

8.2.1   Overall Picture

The overall picture thrown up by the strategic model is that there is an apparent
market failure in unit sizes under 1,000 sq ft (93 sq m) for offices and light industrial,
with a requirement to increase the supply of good quality offices in all size ranges.
There is also potential to address the under-supply of small units by sub-dividing
larger units currently subject to over-supply.

8.2.2   Offices

There is excess supply overall, of just under 20,000 sq ft (1,859 sq m), particularly in
all size bands between 1,000 and 10,000 sq ft (93 and 929 sq m). However, when
looked at in terms of quality of space, there is a shortage of new offices across most
size ranges. In the high quality, second-hand category, there is a shortfall in the
supply of space under 1,000 sq ft or 93 sq m (and for units of 10-15,000 sq ft (929 -
1,394 sq m).

There is a notable oversupply of space in the high and low quality second hand size
ranges above 1,000 sq ft (93 sq m).

8.2.3   Studios

There is a significant shortfall in units of under 1,000 sq ft (93 sq m). This use
category appears to be well catered for across all other size bands.

8.2.4   Light Industrial

There is a similar pattern here to offices with an under-supply of light industrial units
of under 1,000 sq ft (93 sq m) and for all grades of property, a shortage of new
property generally, but oversupply in low grade second-hand property over 1,000 sq
ft (93 sq m).

8.2.5   General Industrial

This category of property is subject to a small level of under-supply across all size
ranges, for both new and second-hand.

It should be noted that most industrial space is not described separately as light
industrial or general industrial, when being marketed by commercial agents.

8.2.6   Warehousing

The same is true of warehousing, where some 100,000 sq ft (9,293 sq m) is in
demand, but very little is marketed as purely warehouse space.

8.3     Area Based Analysis

The strategic model has been developed to assess floorspace demand and supply
across particular sub-areas of the borough. A summary of estimated supply, demand
and excess or shortfall of floorspace by use, size and quality for each area is set out
in Appendix 5.

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     From this, it can be seen that the excess/shortfall profile for the whole borough is
     influenced by South Shoreditch but with significant shortfalls of offices studios and
     high quality light industrial reflected across most other sub-areas. The table below
     broadly summarises the salient findings for each of the sub-areas.

                  Offices                            Studio            Light                General           Warehousing
                                                                       Industrial           Industrial        and Storage
South             Overall over-supply, but within    Major under -     Shortfall in the     Small shortfall   Shortfall across all
Shoreditch        this:                              below 1,000       supply of all        across all size   size ranges
                                                     sqft. -           sizes of new         ranges
                  Major shortfall in units below                       light industrial
                  1000 sqft and from 10-15,000       Excess            space.
                  sqft of around 30,000 sqft.        supply
                                                     between 1000      Shortfall in units
                  Shortfall in the supply of all     and 5000 sqft     below 1000 sqft
                  sizes of new offices.                                and above
                                                                       5,000 sqft
                  Oversupply of second hand
                  space from 1000 – 10,000 sq ft.
                  .
Kingsland         Overall shortfall, made up of      Shortfall         Shortfall across     Small shortfall   Shortfall across
Basin/Kingsland   shortfalls in all size ranges      across most       most size            across all size   most size ranges
Road              excluding 4-5000 sqft size range   size ranges       ranges under         ranges
                                                     under 5,000       5,000 sqft.
                                                     sqft. Excess      Small
                                                     supply over       oversupply
                                                     5,000 sqft        between 5-
                                                                       10,000 sqft.
                                                                       Shortages of
                                                                       over 10,000 sqft
Dalston                                              Shortfall         Shortfall across     Small shortfall   Shortfall across all
                                                     across most       all size ranges      across all size   size ranges
                  Shortfall across all size ranges   size ranges       under 4000 sqft      ranges
                                                     below 5000        and from 10-
                                                     sqft. Excess      15,000 sqft.
                                                     supply over       Oversupply in
                                                     5000 sqft         intermediate
                                                                       ranges
Hackney           Shortfall across most size         Shortfall         Well supplied        Small shortfall   Shortfall across
Central           ranges below 5000 sqft. Well       across most       from 500-2000        across all size   most size ranges
                  supplied over 5000 sqft            size ranges       sqft and above       ranges
                                                                       5,000 sqft.
                                                                       Shortages
                                                                       From 2-5,000
                                                                       sqft
Hackney Wick      Overall shortfall made up of       Supply and        Shortfall across     Small shortfall   Shortfall across all
                  shortfall across all size ranges   demand            all size ranges      across all size   size ranges
                                                     limited but       for new and          ranges
                                                     well matched      high quality
                                                                       second hand
                                                                       space.
                                                                       Oversupply of
                                                                       older low cost
                                                                       space above
                                                                       1,000 sqft.
Other Main        Overall shortfall made up of       Small net         Excess supply        Small shortfall   Shortfall across all
Employment        shortfall across all size ranges   surplus but       of 18,000 sqft       across all size   size ranges
Areas                                                with shortfalls   above 10,000         ranges
                                                     below 5,000       sqft with small
                                                     sqft and          shortfalls in size
                                                     excess supply     ranges up to
                                                     from 5-10,000     this level.
                                                     sqft
Rest of           Shortfall across all size ranges   Small             Excess supply        Supply and        Shortfall across all
Hackney           below 3000 sqft and above          shortfalls        between 1-4000       demand in         size ranges
                  10,000 sqft.                       across most       sqft. Small          balance
                                                     size ranges       shortfalls in
                                                                       other size
                                                                       ranges.



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9.      FACTORS AFFECTING FUTURE WORKSPACE PROVISION

9.1     Sources of Workspace Demand

The above findings suggest a number of key factors to be considered in future small
business workspace provision.

      The growth in micro and small business services activities is likely to continue
      for some time. Much of this demand will arise from business services and
      higher value design and media activities. The area of the borough where this
      will be concentrated will be Shoreditch, suggesting that the provision of office
      and studio space suitable for these purposes in the area will need to be
      intensified. Within this area, there is scope for the provision of considerable
      amounts of high quality second hand office and studio space of less than 1,000
      sq ft (93 sq m) through refurbishment of up to 350,000 sq ft (32,525 sq m) per
      annum.

      Other creative sector and to a lesser extent business services activities will,
      however, be interested in locations elsewhere in the borough. There is scope to
      encourage more of such activities in such areas as Dalston and Hackney
      Central. Though this demand will not require locations elsewhere in the borough
      in any great quantity, what is apparent, is that where reasonably priced
      managed workspace has been provided in such locations as Dalston, Hackney
      Central and even Hackney Wick (e.g. as per the Cell Project Space
      developments), this space is being taken up. This demand evidence, coupled
      with the forthcoming improvements to public transport serving Dalston in
      particular and the relative shortage of small business workspace there,
      suggests there is merit in encouraging more development of this kind.

      The growth in “other services” (which includes activities of membership
      organisations not elsewhere classified, recreational, cultural and sporting
      activities and other service activities) could partially create demand for space in
      other parts of the borough where the needs to service the local population are
      higher e.g. Hackney Central and Dalston and other predominantly residential
      areas.

      There will be increasing demand for space for small-scale distribution activities.
      This is likely to be focused on such areas as Shoreditch, but cost constraints
      and limited availability of land and premises will restrict take up. Areas such as
      Hackney Central and Hackney Wick will therefore be of particular importance in
      this regard. For transport and storage operations, the same is likely to be true,
      though demand for office space is most likely to be focused on Shoreditch.

      There is a need to provide space for the small, more successful manufacturers
      to start-up, expand or consolidate their operations. Key areas on which this
      should focus would be Hackney Central and Hackney Wick. There is, however,
      likely to be a large supply of second hand space due to larger manufacturers
      leaving the borough which could be adapted to meet this demand.

A further factor that should be considered is that of the businesses that are
considering relocation over the next 5 years, (34% of all businesses), 76% (i.e. 25%
of all businesses) are expecting to leave Hackney. If interventions to successfully
redress the shortage of affordable workspace were to be made, part of this outward

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movement could be captured and retained, further increasing the demand for
workspace.

9.2           Evidence of Market Failure

There is clear evidence of market failure in the supply of small business workspace in
Hackney. This evidence is made up of a complex inter-relationship of factors.

      vi)        Projections thrown up by the strategic model indicate a shortfall in the
                 availability of good quality units below 1000 sq ft (93 sq m) for offices,
                 studios and light industrial across all sub-areas of the borough.

      vii)       The fact that most purpose built small business workspace schemes are
                 over-subscribed, (where they are in appropriate locations such as South
                 Shoreditch and Dalston town centre) substantiates the demand side of
                 these projections.

      viii)      New offices and light industrial space are in short supply across the
                 borough.

      ix)        Whilst a number of B1 developments have taken place, many as part of
                 mixed use schemes, levels of vacancy remain high for five principal
                 reasons.

                 a) Current price levels are relatively high and above the level many
                    prospective occupiers can afford.

                 b) The floorspace areas provided are unlettable because they are too
                    large. In such cases, developers have built out the B1 provision to
                    satisfy the policy requirements but have not sub-divided the units into
                    smaller sizes, which match demand.

                 c) Some such developments are in predominantly residential areas,
                    some distance away from mainstream commercial centres well-served
                    by public transport and shops in safe, high quality environments.

                 d) Often the quality of space provided in new build does not match the
                    demand (i.e. poor quality shell and core)

                 e) Developers are not proactively marketing the workspace element of
                    mixed use schemes

      x)         Notwithstanding the under supply of new and small units across the
                 borough, there is considerable over-supply of intermediate sized units (i.e.
                 from 1000-10,000 sq ft (93 – 929 sq m) in South Shoreditch, the area of
                 the borough where demand is greatest. Much of this over-supply has
                 scope for adaptation to smaller units and for longer term provision of
                 move-on space, but this is likely to require intervention if properties of the
                 appropriate small unit size are to be provided. The over-supply should
                 also be preserved as this feeds major demand for inward investment into
                 the area from media, design and business services companies.

The overall picture is of a property market which is out of balance, with strong
demand for small units at the right price remaining unfulfilled, whilst there is an over-

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supply of space which is not let due to it being of the wrong size or location or offered
at too high a price. Taken together there could appear to be a clear case for
intervention in order to address this market failure.




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10.    OPTIONS FOR ADDRESSING DEFICIENCIES IN SMALL BUSINESS
       WORKSPACE

10.1   Intervention Options

10.1.1 Do Nothing

There are a number of implications of not addressing market failure. If the do nothing
option is pursued then we would envisage that B1 schemes will continue to be built
as part of mixed use developments by both RSLs and the private sector. Whilst this
may well be of an appropriate size and reasonably well located, affordability will
continue to mean that much of the space coming on to the market will remain
unoccupied unless rental levels fall to a point where they become affordable. Small
and micro businesses seeking to move may well decide to leave Hackney.

10.1.2 Encourage Developers to Accept Lower Returns in Order to Minimise
       Risk

This option is unlikely to succeed because developers are not inclined to tie up
expensive assets if there is the prospect for holding out for higher value uses or
supplementary development gains in the longer term.

10.1.3 Proactive Intervention

Given the market failure identified, there is a clear need for intervention to address
the mismatch between demand and supply.

       Inward investment demand from business services, design and media
       businesses seeking suitable premises in South Shoreditch is not being met.
       The Atkins Business Survey found that 34% of businesses are considering
       relocating from their current premises in the next 5 years, and of these, 76%
       were considering leaving the borough. Hackney is therefore prone to losing
       25% of its businesses over a five-year period. The main reasons are due to
       shortage of space to expand and the high costs of space. Intervention could
       help retain a large proportion of these businesses.

       There are a number of key growth sectors, such as business services and the
       creative sector businesses whose demand for small workspace cannot be
       met affordably. Intervention could address this need and help consolidate
       Hackney’s latent strengths in these sectors.

       Intervention could address over-supply which is a wasted resource in the face
       of the strength of demand for small business workspace.

       There is an opportunity to locate many types of businesses which are cost-
       sensitive into sub-areas of the borough other than South Shoreditch.
       Intervention could lead to the right types of space being provided at suitable
       cost in the right environments within these sub areas.

Such intervention needs to be based on a series of focused approaches.




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10.2   Sector Based Approaches

10.2.1 Growth Sectors

Consideration should be given towards a sector based approach to providing
solutions. A sector based approach would be appropriate because it enables a very
specific part of the market to be targeted and for its needs to be clearly understood
and solutions developed.

The City Fringe Partnership has been developing a City Growth Strategy to promote
the development of a number of key sectors including printing, fashion and furniture
and product design. Strategies for promoting the growth of these sectors are at an
advanced stage of development, the aim being to procure appropriate levels of public
sector funding together with joint public and private sector leadership to take forward
a series of initiatives tailored to each sector to boost their growth and development in
the City Fringe.

For each of these sectors a sector investment plan has been developed and in each
case there are proposals for the development of workspace and/or specialist support
and resource centres to be set up within the City Fringe. In each case, the sector
investment plan includes proposals for the provision of affordable workspace. Within
the fashion sector for example, a requirement for some 30,000 sq ft (2,788 sq m) of
affordable workspace has been identified for fashion designers and related
businesses, whilst a parallel need has been identified to support the accommodation
needs of clothing manufacturers. For these growth sectors there is also a need to
accommodate specialist support and resource centres in buildings in good quality
locations well served by public transport. City Fringe Partnership propose to go on to
develop sector investment plans for hospitality and catering, cultural and tourism,
financial and business services and potentially audio visual and digital media.

For a number of reasons, Hackney is in a particularly strong position to grasp these
opportunities as a catalyst for taking forward affordable workspace developments.

       Hackney can offer a number of opportunities for relatively low cost workspace
       provision, in such locations as Dalston and Hackney Central as well as in
       Shoreditch.

       The growth sectors being prioritised for support by the City Fringe Partnership
       such as fashion design and clothing, printing, fashion and furniture and
       product design, are already prominent in Hackney, as are the hospitality,
       business services and digital media sectors envisaged as the second phase
       to this programme.

       The presence of disadvantaged communities in Hackney, particularly those
       with high concentrations of those from BME backgrounds, makes the area a
       prime target for City Growth Strategy funding.

The Borough Council is in a strong position to set up the means to deliver solutions
to an issue which currently constrains the growth of these sectors, at the same time
strengthening Hackney’s local economy.




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10.2.2 Manufacturing

There will be a need to coordinate property solutions to address the relocation
requirements of manufacturing firms if these are to be retained within the Borough.
The strategic model has identified the prospects of a large outflow of manufacturing
activity, particularly amongst larger businesses from the borough leaving behind an
excess of light and general industrial workspace. Given that there is a core of smaller
manufacturing activity which is reasonably successful and which is consolidating,
there is scope to acquire former disused industrial sites and convert these into units
of suitable size to match the requirements of these businesses. This will, however,
require an appropriate level of coordination and intervention. Manufacturers need to
be systematically engaged to identify the precise scope of their needs. Once enough
demand for alternative space is identified to justify such a solution, sites and
buildings appropriate for conversion and sub-division need to be acquired, adapted
and let to those manufacturers who require a solution.

10.2.3 Business Services

The demand analysis has identified strong growth in employment amongst business
services firms most of which are small businesses. It has also been identified from
discussions with local commercial property agents that these firms have a preference
for managed workspace. As with the specialist clusters referred to above, there is
scope to marshal the demand for such businesses and similarly orchestrate supply
either directly or with private sector development partners.

10.2.4 Other Sectors

Elsewhere in Hackney other sector opportunities can be identified.

There will be a range of social and voluntary business activities, including social
enterprises whose target clientele is located in the residential heartlands. Many such
activities require offices or general workspace (e.g. for training) close to the main
residential communities they serve but in easily accessible locations such as the
local town centre areas. Enquiries received from Invest in Hackney show that there is
a current demand for over 10,000 sq ft (929 sq m) from such sources.

Black Arts organisations need affordable premises since without this many of the
black arts and cultural activities cannot grow to their full potential. In addition, a
recent study on the need for supporting Carnival related activities identified that
Hackney has a concentration of Carnival related activities that are in need of an
appropriate operational base. These activities do not necessarily need to be in
expensive locations such as Shoreditch but do need to be based close to good public
transport links and locations accessible to the public such as local town or district
centres.

There will be a need to retain some distribution space in areas such as Shoreditch,
sufficient to meet demand for a minimum of 30,000 – 50,000 sq ft (2788 – 4646 sq
m) per year. Consideration should also be given to retaining B8 and light industrial
space in employment zones close to the Olympics site.




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10.3   Marshalling Demand and Orchestrating Supply

There is a requirement to get to understand the accommodation needs of businesses
in each of these sectors on a localised basis and identify wholesale solutions. For
example, some growth sectors may require the setting up of a specialist support and
resource centre in a prominent, prime location, coupled with large amounts of
managed workspace provision.

One of the key requirements for such businesses is to have smart facilities in a
reasonably prestigious location where client-facing activities can take place. The
actual base of the business does not have to be in such a location and can be in less
expensive locations, but which are reasonably accessible to such front office
activities.

10.4   Working with Deliverers

There is scope to work with specialist agencies taking the lead on sector
development activities to identify and verify demand on one hand, then to specify and
identify solutions on the other.

Delivery of these solutions can then either be handed over to the sector lead agency
or to local development trusts or social enterprise agencies to create, operate and
manage workspace within a commercial context. There are a number of delivery
vehicles already in place e.g. Shoreditch Our Way – set up under New Deal for
Communities; Cockpit Arts – a not for profit workspace provider for creative
businesses; Clerkenwell Green Association – who themselves have recently been
looking for new workspace; Community Action Network; Shoreditch Trust; and
Freeform Arts Trust – a community arts organisation who have now branched into
workspace provision. There are a number of London based charitable bodies, such
as ACME, ACAVA and Space Studio who specialise in artist studios. City Fringe
Partnership is forming a number of private sector led action groups to coordinate
sector development initiatives under its City Growth Programme.

There are also a number of commercial workspace providers with expertise in the
creation of managed workspace with whom partnerships could be formed on a
project by project basis.

10.5   Area Based Strategies

10.5.1 Focus on South Shoreditch

From the evidence generated, it is clear that Hackney has an important, and
arguably, enviable opportunity to consolidate a cluster of high valued business
services and designer media activities in South Shoreditch. This, we believe, should
be the core focus of any workspace development strategy for small businesses in
Hackney. Key strands of this aspect of the strategy would be as follows.

The main source of demand is inward investment into the South Shoreditch area
from the West End and other parts of London. The aim should be to seek to marshal
the existing demand through effective networking between relevant commercial
agents and Invest in Hackney and to meet this demand through concerted
interventions (comprising sector based approaches, marshalling of demand and then


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working with deliverers to provide solutions as described above) which match
demand with affordable supply.

10.5.2 Matching Supply and Demand in Lower Cost Areas

Despite oversupply in South Shoreditch, we have identified shortfalls in high quality
office and light industrial property across most other sub-areas of the borough.
Though demand from high value industries is not strong in these areas, there is a
range of important business activities, such as the creative industries and a range of
social support activities which require office space for which demand could be
marshalled and supply orchestrated.

There is a need therefore to develop detailed intelligence on the short to medium
term space requirements of such businesses relative to each of these sub-areas, to
draw up project proposals to address them, then to identify suitable sites where
development can take place, then to coordinate the development of the required
types of units. Whilst the strategic model is useful in this respect for forecasting and
strategic planning purposes, the detailed needs and intentions of individual
businesses need to be identified through business surveys, proactive contact with
them to discuss their floorspace needs and the tailoring of solutions, in line with good
practice in business retention support.




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11.      SCOPE OF PROPOSED INTERVENTIONS

11.1     On-Site Interventions

11.1.1 Workspace on Mixed Use Developments

On-site interventions may be required on mixed use development sites subject to
planning policy which requires re-provision of workspace on former employment land
where there is:

-     workspace not being built out;

-     workspace built but not occupied;

-     workspace which is not suitably configured; or

-     workspace which is under-utilised.

Where mixed use developments already exist but have business workspace which is
not occupied, a number of interventions could be appropriate.

         Advise the developer on how to reconfigure the space to make it more
         suitable and appealing to occupiers.

         Linking the developer with a suitable workspace operator and encouraging a
         partnership arrangement which enables the developer to sub-let the space to
         the operator, who in turn would undertake lettings and day to day
         management of the space.

         Possible acquisition of the space by suitable not-for-profit workspace
         operators on a long lease and adaptation to the needs of a specific grouping
         of end users where demand has been clearly identified in the same area of
         the borough.

Prior work marshalling demand and coming forward with specified requirements,
based on detailed, localised intelligence gathering as described in Sections 10.3-10.5
above, will be a key factor in persuading developers to adopt these approaches.
This could also counter arguments by developers that there is no demand for space,
when it is possible to prove this demand.

Where forthcoming residential development on former employment sites is suitably
located for small and micro-business space as part of a mixed use development, the
provision of suitably sized and configured B1 space should be sought on the basis of
an appropriate form of development agreement. This will largely apply to sites in
areas such as South Shoreditch, Dalston and Hackney Central where evidence of
demand as various levels has so far been identified. This should not necessarily
exclude sites elsewhere in the borough if and when demand opportunities become
apparent.

The development agreement, should, where appropriate, allow for the option of a
designated operator taking over the space to configure, market and operate it in line
with market need if the developer cannot prove a track record in marketing and
operating workspace successfully. As far as possible on-site provision would ideally
be by way of long leases on peppercorn rents to a not for profit workspace provider,

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approved by the council, who then becomes party to a legal agreement with the
developer.

11.1.2 Dedicated Workspace Developments

There is also scope to consider interventions on sites which are to remain in
employment use, particularly in such areas as South Shoreditch, where unit sizes are
currently too large to cater for mainstream demand.

The provision of smaller unit sizes, particularly under 1,000 sq ft (93 sq m) and
especially under 600 sq ft (56 sq m), could be brought about in a number of ways.

       Encouragement and persuasion of developers refurbishing and adapting
       buildings of this kind to include or increase provision in these size ranges.

       A compulsory requirement to include such provision to the required standard as
       a condition of planning approval. South Shoreditch for example, is already
       subject to a policy which requires 50% of employment space to be suitable for
       SME space. This should be enforced in a more specific way, focusing on the
       needs of micro and small businesses requiring units of under 1,000 sq ft (93 sq
       m), in line with the guidelines set out in Section 11.1.3 below.

       Direct intervention by acquiring such sites and converting them into small,
       managed workspace units in association with an appropriate deliver and/or
       workspace operator.

Other alternatives to workspace only options include:

   -    taking a master lease on an existing building, sub-dividing then letting out
        units at a premium

   -    encouraging specialist private sector providers to provide flexible workspace,
        where a demand can be proven.

11.1.3 Guidelines for the Design and Configuration of Units

a) Smaller Workspace Only Schemes

The following guidelines are set out to assist planning of possible interventions to
provide small business office or studio workspace which is viable and of the right
type.

           Location

Such centres are only likely to be viable in urban locations where an emerging small
business demand or specialist cluster has become evident. They should be
accessible to public transport and provide parking if possible.

           Size

Workspace complexes can be of any size, but will typically range from 5 to 25 units in
schemes of between 2,000 and 8,000 sq ft (186 and 743 sq m) of net lettable space.
A minimum of 15% should be allowed for circulation.


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         Entrances and Image Factors

The centre should be an aesthetically pleasing building, even if new. Particular
emphasis should be placed on having a smart entrance, reception (if one is to be
included) and passageways. The internal appearance of units is normally up to the
user. Individual push button entry phones should be provided where there is no
reception.

         Configuration of Units

Unit sizes should ideally be between 200 sq ft (19 sq m) and 600 sq ft (56 sq m),
unless move-one space is being considered. Where there is scope for a grid
configuration, the base unit should be 600 sq ft (56 sq m), sub-dividable through
partitioning to combinations of 200, 300 or 400 sq ft (19, 28 or 37 sq m). Units should
be lockable, with natural light but enable full privacy for the user. The requirement for
natural light has implications for the width of buildings used and the configuration of
internal corridors.

         Move on Units

Move on units should be between 600 sq ft (56 sq m) and 1,500 sq ft (139 sq m).
Similar attention needs to be paid to the image factors highlighted above.

         Equipping of Units

It is normal practice to allow tenants to furnish and equip their own units, as the
building of shelves and other fixtures may cause more problems than it solves for
some users. However, the availability of standard desks, partitioning and space
efficient storage units which can be rented or sold as per demand can be of great
help to businesses which are newly established.

Individual units need a copious choice of plug sockets and telephone access points.
Ceiling lighting is the most flexible as wall mounted lighting may restrict shelving or
other uses of the walls.

         Wiring and Technology

Perimeter wiring is standard practice. Raised floors are an option if long term
flexibility in the use of the floorspace is required but tend to be expensive to provide.
The type of wiring provided is not as important as the configuration of ducting which
should enable wiring to be replaced and upgraded in the future.

In the case of media or other clusters, it is not worth seeking to provide specialist
equipment until or unless a strong demand can be proven from a grouping of
businesses in the same sector.

         Supporting Amenities

Developments need to provide toilets and small kitchens (comprising a sink and
cupboards with electric points only) according to the total floorspace being let.
Meeting rooms and café areas are options, but do not generate income and are
rarely viable on scheme of under 15-20,000 sq ft (1394 – 1859 sq m).



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              Shared Services

Reception, switchboard, copying and printing services are not generally viable on
schemes of this scale because they are highly labour intensive. Security needs to be
designed into such schemes for the same reason e.g. through entry phone systems.

              Management and Administration

Again, dedicated on site management and administration is not viable on small
schemes. For this reason, smaller workspace only schemes need to be run as part of
a larger portfolio of properties owned and operated by the same organisation to
achieve the economic of scale to make these viable. A scheme comprising a
reception and switchboard service supported by 1 FTE administrative staff would
normally require a minimum of 10,000 sq ft (929 sq m) to break even.

b) Workspace and Resource and Support Centres

Larger workspace schemes can provide a focal point for emerging clusters, provision
shared facilities and business support and affordable use of expensive facilities
where justified, in the form of integrated workspace and resource and support
centres.

A large workspace scheme, beyond given threshold, can generate enough surplus
funds which can pay for high quality meeting space, a professional reception and
message taking service and possibly a café area. In not-for-profit schemes, an on-
site centre manager can also be funded to provide business advice and support in
addition to centre administration. These types of scheme are an ideal means of
anchoring an emerging cluster within an area if funding can be found.

Under this model, a typical configuration would be:

Total lettable floorspace                                                   18-20,000 sq ft
                                                                            1,673-1,859 sq m

Support centre, comprising:

    -    reception and switchboard area
    -    presentation suite, with high quality visual aids and projection
    -    1-2 meeting rooms
    -    coffee room
    -    hot desk area for visiting business support practitioners
    -    centre management office                                               1,500 sq ft
                                                                                139 sq m

    Kitchens                                                                    300 sq ft
                                                                                28 sq m
    Toilets                                                                     700 sq ft
                                                                                65 sq m
    Circulation space at around 15%                                             3,500 sq ft
                                                                                325 sq m

    Total                                                                       24-26,000 sq ft
                                                                                2,230-2,416
                                                                                sq m

All other criteria relating to the configuration of units, as described above, would
apply. The key difference here is having a workspace centre of sufficient scale to
provide the full range of services, particularly switchboard services that small
businesses need.
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11.2   Off-Site Interventions

The Council has laid out a series of planning policies which seek to maintain and
develop the competitiveness and diversity of local economic activities whilst
addressing the pressures for residential development on former employment land.
Key elements of these policies include requirements for inclusion of B1 users in
mixed use schemes, qualified restrictions on residential development and a
requirement for 50% of new employment floorspace to be suitable for SME space in
such locations as the Edge of City sub-district and the Shoreditch Triangle.

These policies have been reviewed in Section 5 above. The draft Planning
Contributions SPD sets out a policy to promote appropriate small business
workspace provision to the required standards primarily through on-site measures,
but that monetary contributions with respect to the loss of employment floorspace
would be required in more exceptional circumstances.

The amount to be contributed will need to be negotiated on a case by case basis.
However, a common sense guideline as to how the contributions are set, would be to
based these on the costs of a providing similar amount of floorspace, based on the
equivalent cost of acquiring the land, plus the costs of basic construction, excluding
fit, out of the same amount of floorspace in a similar location.

If replacement floorspace is then to be built in an area where employment land is
more expensive, or would involve a larger amount of sub-division, this would mean
that less replacement workspace could be provided due to higher costs. It would
nevertheless provide a fair basis for setting such contributions.

These contributions would be channelled into the higher order employment areas,
such as Area Action plan areas where there is the greatest scope for employment
generation and thereby workspace demand, either to build new workspace or to
refurbish existing premises for small businesses requiring premises of a size and
configuration suitable to these needs. This envisages the use of such contributions in
different areas from where residential development on former employment land is
taking place.

The strategic model has indicated that most of the required small business
workspace will be in areas which are not predominantly residential. The evidence
from the strategic model indicates that there is scope for intervention of this kind in
such areas as:

       South Shoreditch, as the priority focus

       Dalston

       Hackney Central

       Kingsland Basin/Kingsland Road

       Hackney Wick

These contributions are likely to have the greatest effect on small business creation,
employment growth and development if applied to these areas.


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There is scope to release employment land for residential development throughout
the rest of Hackney, other than the remaining employment areas which are in small
pockets; given that very limited business demand can be identified in these
residential heartlands. This level of demand will be tested by requiring robust
marketing evidence for such sites.

In order to apply contributions where they are needed, there will be a need for
focused coordination to ensure that they are deployed to their best effect.

For this, there is a requirement for a coordinator to work closely with individual local
businesses, local business networks, those promoting sector development initiatives,
Invest in Hackney, business advice and support agencies and local commercial
agents to maintain a dynamic base of market intelligence so as to be able to marshal
demand for affordable workspace and link these to available supply.

Supply would then need to be orchestrated by identifying appropriate buildings or
groups of buildings in suitable locations that can be acquired and adapted for the
purposes of small workspace provision. Having clearly understood the requirements
of businesses making up this local profile of demand, a specification of the required
types of workspace by location, size, quality and cost can be drawn up. This
specification would then be used to select an appropriate site and work up a suitable
development project.

A range of alternative options can then be considered for the use of pooled
contributions.

The first of these might be to set up an appropriate mechanism for generating the
required market intelligence from businesses, specifying solutions according to
identified needs and then working towards their delivery with appropriate partners, as
described above.

Other interventions could embrace a variety of measures, of which the main ones are
considered below.

       Construct new employment premises

       Promoting the growth of key sectors for London

       Affordable workspace and incubator units

       Refurbishment of existing employment premises

       Environmental improvements

       Improvements to public transport

11.3   Merits of Alternative Interventions

There is scope for each of these measures to be applied according to the
circumstances and location of each development need under consideration. No one
form of intervention is mutually exclusive and the options can be mixed and matched
to optimal effect on a case by case basis.



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The appropriate type of intervention will depend on taking account of the specific
advantages and caveats of each type of intervention relative to the situation affecting
any given development.

Guidelines as to the benefits of each type of intervention, where they may be applied
and any caveats to be borne in mind, are summarised on the table below (Table
11.1).




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                                                                     TABLE 11.1
                                                      GUIDELINES ON ALTERNATIVE INTERVENTIONS

Option                     Relevance to main employment areas                   Benefits                                                                  Caveats
Construct New     Shoreditch                                                                 Modern facilities with high quality of design,        •   High cost of
Premises              •    Preferred location but potentially limited                        cabling etc to meet bespoke needs of high                 development.
                           opportunities because of high land values                         technology or knowledge based businesses.
                           associated with residential development                                                                                 •   High cost of site
                                                                                             Flexibility of space to provide ‘move-on’                 acquisition.
                  Kingsland Basin/Kingsland Road                                             accommodation.
                                                                                                                                                   •   Not economically viable.
                      •    Likely to be more opportunities than Shoreditch                   Potential to locate close to good public transport
                           and would encourage extension of activities                       facilities.                                           •   Long term financial
                           northwards from Shoreditch.                                                                                                 liability.
                                                                                             Potential to incorporate high quality external
                  Dalston                                                                    environment.                                          •   Will require commitment
                      •   Could be used to reinforce development of                                                                                    to future levels of
                                                                                             Contribution to area specific regeneration and            subsidy.
                          cultural industries in this area.
                                                                                             economic development objectives. Potential to
                  Hackney Central                                                            cross subsidise by including residential as part of
                     •   Opportunities likely to emerge but would need to                    the mix.
                         attract businesses that have less specific
                         locational requirements.
                  Hackney Wick
                     •   Greater opportunities but limited in the short term
                         by land requirements for the Olympics.



Affordable        Shoreditch                                                        •        Create opportunities for start up businesses that     •   Subsidy to developers.
Workspace and                                                                                would otherwise be unable to find premises.
Incubator Units       •    Area of greatest demand and potential because                                                                           •   Could distort the market
                           of high levels of activity. Opportunity to develop       •        Could be targeted to meet the needs of                    by artificially lowering
                           incubator identified as a priority requirement in                 qualifying small and micro businesses.                    prices.
                           the Black and Minority Arts Network Premises             •        Enables vacant premises to be occupied.               •   Would require direct
                           Audit.                                                                                                                      intervention because


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                                                                     TABLE 11.1
                                                      GUIDELINES ON ALTERNATIVE INTERVENTIONS

Option                  Relevance to main employment areas                       Benefits                                                              Caveats
                Kingsland Basin/Kingsland Road                                      •     Contribution to wider regeneration and economic           market unlikely to
                                                                                          development objectives.                                   provide voluntarily.
                    •     A number of recently built commercial units
                          remain vacant and this mechanism could be                                                                             •   from other localities.
                          used to increase levels of occupation. Should                                                                         •   Development costs
                          complement the nearest incubator, Accelerator,                                                                            could be high
                          probably focused on meeting the needs of
                          design/media/visual art businesses.
                Dalston

                    •     Potential to facilitate growth of cultural and
                          creative industries quarter. Should not conflict
                          with existing initiatives being undertaken by
                          Bootstrap Enterprises. Could support a second
                          phase of this project if it proves to be successful.
                Hackney Central

                    •     Potential to facilitate growth of fashion/clothing
                          industries quarter.
                Hackney Wick

                    •     Relatively low cost area so may lead to
                          unnecessary distortions in the market. Potential
                          to reconfigure and implement previous initiative
                          promoted by Workspace plc.


Refurbishment   Shoreditch                                                           •        Attractive to businesses looking to locate in     •   Possible that the only
of Existing                                                                                   buildings with more character.                        buildings that become
Employment          •     Area of greatest potential because of large stock                                                                         available are the most
Premises                  of suitable buildings and area of greatest                 •        Enable currently vacant premises to be                difficult and relatively
                          demand.                                                             occupied, maximising a currently under-utilised       expensive to adapt.


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                                                                       TABLE 11.1
                                                        GUIDELINES ON ALTERNATIVE INTERVENTIONS

Option                     Relevance to main employment areas                      Benefits                                                                 Caveats
                     •     Could be used to support sector specific                             resource.                                            •   Potentially sub-optimal
                           initiatives proposed by City Fringe Partnership.                                                                              development.
                 Kingsland Basin/Kingsland Road                                                                                                      •   Would require direct
                                                                                                                                                         intervention because
                     •     Potential to provide accommodation for                                                                                        market unlikely to
                           businesses being forced out of South Shoreditch                                                                               provide voluntarily.
                           by high rents.
                                                                                                                                                     •   May not be
                 Dalston                                                                                                                                 economically viable.

                     •     Potential to facilitate growth of cultural industries                                                                     •   Could be long term
                           quarter.                                                                                                                      financial liability.

                 Hackney Central                                                                                                                     •   Will require commitment
                                                                                                                                                         to future levels of
                     •     Potential to facilitate growth of fashion/clothing                                                                            subsidy.
                           industries quarter.
                 Hackney Wick

                     •    Limited opportunities.
Rent Relief to   Can be considered for managed workspace in all sub-                   •        Suitable for meeting the needs of qualifying small   •   May require
Enable           areas to assist businesses at start up stage.                                  and micro businesses at an early stage of their          commitment to future
Business Start                                                                                  development.                                             levels of subsidy.
Ups
                                                                                       •        Creates opportunities for start up businesses that   •   May not be sustainable.
                                                                                                would otherwise be unable to find premises.
                                                                                                                                                     •   Could create an
                                                                                       •        Can bridge the mismatch between supply and               imbalance at the sub
                                                                                                demand, in the short to medium term.                     regional level by
                                                                                                                                                         attracting businesses
                                                                                       •        Facilitates the occupation of vacant commercial          from other localities.
                                                                                                units.
                                                                                                                                                     •   Would require strategy
                                                                                       •        Obviates the need for large capital allocations.         to enable successful



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                                                                     TABLE 11.1
                                                      GUIDELINES ON ALTERNATIVE INTERVENTIONS

Option                     Relevance to main employment areas                  Benefits                                                                 Caveats
                                                                                                                                                    businesses to ‘move-
                                                                                                                                                    on’.
Promote the     Shoreditch                                                         •        Enables important clusters to grow and              •   May exclude other
Growth of Key                                                                               consolidate in Hackney, strengthening the local         businesses with growth
Sectors             •      Key sectors identified by City Fringe                            economy.                                                potential.
                           Partnerships. Could be used to support CFP
                           initiatives.                                            •        Enables a focused, targeted approach tailored to    •   Support infrastructure
                                                                                            the specialist needs of sector based businesses.        would be required to
                Kingsland Basin/Kingsland Road                                              Conducive to the attraction of inward investment.       ensure success.
                                                                                   •        Complement the City Fringe Partnership strategy
                    •      Facilitate the development of                                    initiatives
                           design/media/visual art businesses that are
                           migrating north from Shoreditch.                        •        Create opportunities for start up businesses that
                                                                                            would otherwise be unable to find premises.
                Dalston
                                                                                   •        Increase in employment opportunities.
                    •      Facilitate the development of cultural industries       •        Create opportunities for the development of
                           sectors.                                                         supportive networks.

                Hackney Central

                    •      Facilitate the development of clothing industry
                           based in Mare Street DEA.

                Hackney Wick



Environmental   All locations                                                      •        Would enable some town centres to increase          •   A more marginal issue.
Improvements                                                                                business occupiers due to safer and more
                                                                                            attractive operating conditions.                    •   Requires a long term
                          Employ Community Support Officers to provide
                                                                                                                                                    management
                          high visibility patrols within employment areas,
                                                                                   •        Improve the wider image of Hackney.                     commitment to give
                          providing reassurance and tackling antisocial
                                                                                                                                                    priority to the


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                                                                     TABLE 11.1
                                                      GUIDELINES ON ALTERNATIVE INTERVENTIONS

Option                      Relevance to main employment areas                Benefits                                                                 Caveats
                           behaviour.                                            •     Address an issue identified by Atkins report.               maintenance of the
                                                                                                                                                   streetscene.
                                                                                  •        Contribute to wider Regeneration and Liveability
                           Introduce initiatives such as the Environmental
                                                                                           objectives.                                         •   May only be successful
                           Business Pledge developed by Manchester City
                                                                                                                                                   if complemented by
                           Council. Work with partner agencies to encourage       •        Wider community benefits for residents and              other initiatives such as
                           local businesses to improve their environmental                 workers alike.                                          the introduction of
                           performance and their local environment.
                                                                                  •        Better street lighting will improve safety.             Neighbourhood
                                                                                                                                                   Wardens and
                            Invest in infrastructure and environmental
                                                                                                                                                   improvements to
                            improvements, to create a sought-after
                                                                                                                                                   Community Safety and
                            industrial/business location.
                                                                                                                                                   improved Public
                                                                                                                                                   Transport.
                                                                                                                                               •   Revenue implications.


Accessibility and   Can be considered for all sub-areas                           •        Opportunities to capitalise on existing and         •   Some interventions may
Improvements                                                                               forthcoming rail routes.                                be long term in nature.
to public
transport                                                                         •        Potentially significant impact on opening up less
system.                                                                                    central areas to small business workspace
                                                                                           demand.

                                                                                  •        Some interventions can take place short term
                                                                                           and at relatively low costs, e.g. improvements
                                                                                           around London Fields station, or introduction on
                                                                                           new bus services.




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11.4    Establishing Coordination Capacity within the Borough Council

An essential step will be to set up a mechanism to administer the development
funding and processes associated with Section 106 funding related for re-provision of
B1, B2, B8 workspace or related employment growth initiatives where employment
land is lost, such as through residential developments undertaken on former
employment land.

This may require a small section of 1-2 officers to be established within the Council,
within or working on behalf of the Planning or Economic Development/Regeneration
areas. This would be in line with the Consultation Draft of the Planning Contributions
Draft which states that 'The Council's Economic Development department will
evaluate the impact of development to assess the type of contributions a developer
may deliver.'

This coordination section would involve the following functions:

       Advise on the scope of what is required from the development agreement for
       Section 106 agreement.

       Administer the pool of funding received from developer contributions.

       Commission work to investigate and marshal demand for workspace identify
       sites on which solutions can be delivered.

       Facilitate and forge partnership arrangements between workspace operators
       and residential developers where mixed use developments can meet a fully
       worked up workspace need for an identified purpose.

       Work with other council departments to bring about public realm improvements
       which may accompany workspace developments, such as environmental and
       public transport enhancements.

Consideration should be given towards advertising, prequalification and selection of a
panel of development coordination teams who can be commissioned on a project by
project basis to advise on development values or to undertake development
feasibility studies for specific projects meeting specific needs. Such teams would
typically involve a multi-disciplinary grouping including an architect, a chartered
surveyor, quantity surveyor and structural engineering specialist. Typically this would
be made up of a consortium of professionals who would collectively have access to a
range of more specialist professional expertise elsewhere in their firms or through
associate networks.

11.5    Development Coordination Functions

Once funding receipts have begun to be accumulated, there will be a need to work
with appropriate business, sector-related, community organisations, or social
enterprises to:

        a) Marshal demand for specific workspace requirements, which are location
           specific.

        b) Define and specify workspace projects by location, size and configuration,
           which will provide solutions to the needs of these bodies.

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       c) Identify and procure sites which match the needs of those projects.

       d) Coordinate construction of the required workspace.

       e) Arrange handover of the developed space on appropriate commercial
          terms.

In terms of delivery, the Council would have the option of working directly with those
who are coordinating sector development initiatives and encouraging them to acquire
their own expertise to work up schemes for workspace provision.

Alternatively, there would be the option of setting up an independent, arms length
corporate vehicle to undertake these functions. This would enable expertise to be
focused in a single entity oriented to the planning, economic and regeneration aims
of the borough. It would avoid the need for the borough council to devote significant
management time to the process and avoid potential conflicts of interest. This would
most likely take the form of a development trust as described below.

11.6   The Case for Establishment of a Development Trust

11.6.1 Areas of Added Value

Given that there is a justifiable case for market intervention, there is therefore a case
for establishing a corporate vehicle which operates as the market intervention
organisation acquiring, owning, funding and letting properties either directly or
indirectly to groupings of small businesses requiring workspace in Hackney. This
would most likely be in the form of a Property Trust which will have some form of
relationship with Hackney Borough Council whereby it would receive capital funding
from the Borough Council that will be utilised to fund the procurement of property.
The form of the relationship with the Borough Council and the capital funding could
take many forms.

An arms length vehicle potentially can add value in a number of ways.

       Capital Financing. A Trust could potentially raise debt finance or attract equity
       finance utilising different structures to those available to the Borough Council.

       Operational Style. To maximise the opportunity a Trust would have to operate
       in a commercial style similar to the companies it will be competing with in the
       market. An arms length vehicle will have more potential to operate
       commercially than an internal Borough Council division.

       Funds Recycling. In any corporate model there will be a real possibility for
       revenue profits and capital gains to be realised. If these are received by the
       Borough Council they may be seen as a general cash inflow and be utilised to
       fund Borough Council’s general spending programmes. If they flowed directly
       into a Trust they would be effectively ring fenced and available to support
       further investment programmes.

       Focus. The Trust management team would be entirely focussed on a single
       specialised market and as such would develop specific skills, knowledge and
       contacts which would be materially different to those of an in-house Borough
       Council division.

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       Borough Council Control and Influence. If the Trust for all but minor decisions
       requires Borough Council approval it is effectively incapable of operating at
       arms length and is in all but name an internal division of the Borough Council
       ;
       Staffing. If the Trust does not have its own permanent staff and is staffed
       through secondments from the Borough Council it will be difficult if not
       impossible for it to grow a culture or modes of operation which are distinct
       from those of the Borough Council. In all but name it will be an internal
       division of the Borough Council;

       Operational Style. Although arms length and theoretically able to work
       independent of the Borough Council it could be set up with a constitution that
       forces it to work in a similar way to the Borough Council, for instance imposed
       financial regulations and operational procedures. The more these are
       imposed the more it will look like a mirror image of the Borough Council with
       little if any real added value. The Trust would need a financial regime to
       reflect the fact that it is handling public sector funds but this is not the same
       as having an identical regime to the Borough Council;

       Low Deal Volume. There can be various reasons for creating an arms length
       vehicle; these typically revolve around tax structuring and protecting/pledging
       assets in capital financing deals. Neither of these circumstances is likely to
       occur in this case. All freestanding vehicles create additional costs that will
       vary according to whether the vehicle is a shell or a full trading organisation. If
       there is a low volume of trading activity in the vehicle it will increase overall
       costs but not produce any significant advantage compared with the in house
       option.

The vast majority of the above issues are ones that are totally within the control of
the Borough Council and the Borough Council has significant degrees of freedom in
relation to how it establishes and allows a Property Trust to function. The Borough
Council may have some constraints that flow from its own statutory powers and
responsibilities and these will need to be considered in due course. It is unlikely that
the Borough Council is so constrained that a freestanding vehicle could not be
structured in a way that can create real added value.

In summary the case for a Property Trust is almost entirely dependent on how the
Borough Council chooses to establish the Trust and allows it to function.

11.6.2 Core Functions

The core business of the Trust would be to provide expert property advice to the
identified groupings of small businesses with a collective need for affordable and/or
specialist workspace and where necessary fund properties for use by those
businesses.

In procuring property the issues that the Trust addresses will be confined to property
related matters. In addition there are other matters, which the groupings of end
users may need to address in order to inform the property procurement process.
These include:

   •   Space Specification. How a building will be subdivided and what
       services/facilities are provided to each unit or common area.

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   •   Specialist Requirements. Where there are specialist users there may be
       specialist requirements for instance in relation to floor loadings, lighting
       standards or power supplies.
   •   Support Services. How a building will be used and what non-standard
       facilities may be incorporated.

These issues need to be addressed as part of the property procurement process. In
reality we would anticipate that through the Trust and groupings of end users working
closely together it would be possible to resolve both the operational and property
issues within a single agreed property specification document.

Property advice required by the groupings of end users would be provided in a
flexible but not necessarily open-ended basis. For complex matters a formal
commissioning approach could be adopted with charges being levied although not
necessarily on a full cost basis.

The Trust would only acquire a property interest following a clear brief from the
grouping of end users. It is imperative that the Property Procurement process is end
user driven.

Subject to Borough Council policy and financial constraints the Trust could when
procuring property:

       Develop a new building on an acquired site;
       Refurbish or adapt an acquired building;
       Acquire a building already fit for purpose; and
       Working with Public or Private Sector partner’s facilities a ‘deal’ without
       necessarily taking a direct interest.

Once a property brief is agreed between the Trust and a grouping of end users there
are four possible major transaction types for procuring the property.

Freehold or premium leasehold;
Acquiring a leasehold interest with no premium;
Deficit funding a commercial development; and
Facilitating or brokering a deal between the end user grouping and a Third Party.

All these options should be available to the development trust, if this option is
selected.




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12.      CONCLUSIONS

12.1     Key Findings

This report has clearly identified a major imbalance between the demand and supply
of small business workspace of a suitable quality across Hackney.

       Hackney is rapidly becoming a favoured location for professional and business
       services, media and design related businesses attracted by close proximity to
       the large customer bases in the City and West End. South Shoreditch is the
       areas where this demand is concentrated.

       The level of demand from these businesses for workspace in South Shoreditch
       is significant. There are a large number of unfulfilled requirements for space
       under 1,000 sq ft (93 sq m). Intervention is needed to address this imbalance.

       There is evidence to suggest that professional and business services and
       creative sector micro-businesses are being attracted to Dalston and Hackney
       Central. Whilst this represents a tiny fraction of the demand experienced in
       South Shoreditch, it nevertheless suggests that with appropriate provision of
       managed workspace, a stronger case of such businesses could potentially be
       attracted to these areas.

       Two thirds of the available floorspace is in South Shoreditch. However, given
       the number of unfulfilled requirements, the strategic model indicates that much
       of this floorspace is of the wrong size and type.

       Live work schemes no longer cater for the needs of small businesses seeking
       to set up in Hackney as they are too expensive.

       Much of the newly built vacant floorspace elsewhere in Hackney is also of the
       wrong type and in some cases in the wrong place.

The study has spelt out the case for intervention in order to address market failure in
the small business workspace market, particularly to provide units of the right size
and quality at an affordable price. This needs to be addressed in order to meet the
economic development and regeneration needs of the borough.

12.2     Recommendations

To address the needs identified, the following actions are recommended.

      1. Policies should be set in place or maintained to preserve employment uses
         within these areas where demand for business workspace is prominent.

      2. Developers should, where appropriate be encouraged to configure or
         reconfigure any space provided on-site to make it more suitable and
         appealing to SME occupiers.

      3. In other areas which are characterised by high concentrations of residential
         development, sites which are remote from main employment areas can be
         selectively released from employment uses, provided that contributions
         towards re-provision are made where appropriate. This should be subject to

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      preserving sufficient industrial and warehousing space to meet demand in line
      with projections from the strategic model and/or more localised in market
      intelligence that may emerge in the future.

   4. The Council should focus on off-site interventions, whereby financial
      contributions received for loss of employment in one part of the borough can
      be directed towards replacement space in another, provided that a legal basis
      for this can be established. This should be the priority target for funding
      contributions emanating from the Councils SPD Planning Contributions
      Policy.

   5. A coordination mechanism should, in the first instance be set up within the
      Council. This could comprise two officers responsible for advising on and
      administering the pooled development funding from Section 106, specifying
      the scope of employment growth schemes, particularly those related to
      affordable workspace then coordinating their delivery.

   6. An arms length corporate vehicle, in the form of a development trust should
      be established as the vehicle for acquiring, owning, funding, developing and
      letting properties which meet the demand for small business workspace
      where the private sector is failing to do so.

   7. This vehicle should focus on identifying suitable sites and buildings, working
      up suitable development schemes and working with appropriate not for profit
      or private sector deliverers to acquire such sites then implement and operate
      these schemes.

   8. Through these two mechanisms, as a priority, workspace schemes should be
      initiated in South Shoreditch to address the identified shortage of small
      business office and studio space in South Shoreditch. The key focus needs to
      be in providing good quality space subdivided into units of up to 500 sq ft (46
      sq m) and between 501 – 1000 sq ft (47 – 93 sq m).

   9. This should include the development of managed workspace centres, ideally
      of 20 – 25,000 sq ft (1,859 – 2,323 sq m) both to meet the needs of specialist
      sectors and for general users in the business services, media and design
      fields. A supply of general office and studio space of between 500 sq ft (46 sq
      m) and 3,000 sq ft (279 sq m) should also be delivered through these
      mechanisms.

   10. Such intervention needs to centre around addressing the collective needs of
       individual sectors, particularly the business services, media and design, or
       where this is not appropriate, marshalling the demand from other suitable
       groupings of end users with similarly identified workspace needs.

   11. More managed workspace schemes should then be initiated in Dalston and
       Hackney Central, focusing on the provision of start up units of under 500 sq ft
       (46 sq m) and in the longer term expansion units up to 3,000 sq ft (279 sq m).

   There is now an opportunity for the Council to take forward these proposals. In
   so doing, it can bring about the successful consolidation and growth of a number
   of specialist business sectors, unlocking current constraints on their potential
   development and leading to greater dynamism, vibrancy and sustainability within
   the local economy.

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                              APPENDICES




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APPENDIX 1




MAPS




1.     Hackney Employment Areas

2.     Postcode Map




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APPENDIX 2
                                                CASE STUDIES OF MIXED USE PLANNING APPLICATIONS
                                                                  MIXED USE DEVELOPMENTS



                                                 Floorspace Created by Sample of Mixed Use Development

ADDRESS                                                                                    B1 Floorspace (m2)          Built
                                                                                                                 630   Yes
Old Gainsborough Film Studios New North Road/ Imber Street/Poole Street                                         2545   Yes
Land At 257-269 Mare Street 280-288 Richmond Road And Martello Street                                           6814   Yes
1-3 Long Street                                                                                                 5778   Yes
23-41 Wenlock Road (Royle House)                                                                                2181   Yes
6-24 Southgate Road                                                                                             2440   Yes
Land Bordered By Britannia Walk, Nile Street, Provost Street And Ebenezer Street                                1724   Yes
238-240 Kingsland Road                                                                                          1862   Yes
8 - 14 Orsman Road                                                                                              1842   Yes
5-7 Wenlock Road                                                                                                3660   Yes
297-301 Kingsland Road                                                                                           702   Yes
Westland Place/Nile Street/Britannia Walk                                                                       3007   Yes
Hornes House, 15 Ramsgate Street London E8                                                                      1242   Yes
35 37 & 39 Stoke Newington High Street                                                                             0   Yes
284-288 Kingsland Road                                                                                          1441   Yes
3-23 Bentley Road                                                                                                  0   Yes
21-29 Shore Road                                                                                                 661   Yes
Britannia Walk Industrial Units, 11-13 Ebenezer Street                                                          1291   Yes
16-30 Provost Street                                                                                            1102   Yes
43a Manor Road                                                                                                   120   Yes




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                                              Floorspace Created by Sample of Mixed Use Development

ADDRESS                                                                               B1 Floorspace (m2)           Built
9-13 Arcola Street                                                                                           296   Yes
23-35 Waterson Street                                                                                        465   Yes
Perseverance Works Waterson Street                                                                           500   Yes
9-11 Garden Walk                                                                                             620   Yes
                                                                                                           40529


Leeside And Middlesex Wharves (Latham’s Yard) Mount Pleasant Hill                                           6390    No
29-53 Chatham Place Burberry Building                                                                      5273     No
Adelaide Wharf And 118 - 120 Queensbridge Road                                                               690    No
3-11 Wenlock Street                                                                                          530    No
23-41 Wenlock Road (Royle House)                                                                             645    No
50 - 60 Wharf Road                                                                                         5879     No
26-30 Southgate Road                                                                                         147    No
2 - 26 Somerford Grove                                                                                     4908     No
2 - 46 Sedgwick Street                                                                                     1181     No
48 - 50 Well Street & 30-32 Shore Road                                                                       490    No
1 - 7 Mackintosh Lane                                                                                        268    No
273 - 277 Wick Road                                                                                          576    No
102-110 Mare Street                                                                                          716    No
114 - 142 Mare Street & 11 - 15 Tudor Road                                                                   503    No
14 Triangle Road                                                                                             870    No
1-3 Silesia Buildings                                                                                        547    No
35 - 41 Westland Place                                                                                       760    No
16 - 26 Westgate Street/Corner Of Triangle Road                                                              767    No
32a Geldeston Road                                                                                           544    No
Land Adjoining 112-122 Tabernacle Street                                                                     426    No




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Study of Small Business Workspace Provision in Hackney




                                                Floorspace Created by Sample of Mixed Use Development

ADDRESS                                                                                 B1 Floorspace (m2)              Built
20 Ramsgate Street                                                                                              1489      No
167-171 Balls Pond Road                                                                                           176     No
166-168 Shepherdess Walk                                                                                        3718      No
Land Adjacent To 15 Micawber Street                                                                               821     No
2 -16 Phipp Street                                                                                                951     No
16 Andrews Road                                                                                                   809     No
8 Long Street                                                                                                     630     No
                                                                                                                41184




                                      Analysis of a review of Planning Applications for Mixed Use Development
MIXED USE DEVELOPMENTS - DETERMINED                                                          New Build/Refurb           Live-work
Leeside And Middlesex Wharves (Latham’s Yard) Mount Pleasant Hill                                New Build              Live-work
Old Gainsborough Film Studios New North Road/ Imber Street/Poole Street                         New Build               Live-work
29-53 Chatham Place Burberry Building                                                            New Build
Adelaide Wharf And 118 - 120 Queensbridge Road                                                   New Build
Land At 257-269 Mare Street 280-288 Richmond Road And Martello Street                           New Build               Live-work
3-11 Wenlock Street                                                                              New Build
1-3 Long Street                                                                                  New Build
23-41 Wenlock Road (Royle House)                                                               Refurbishment            Live-work
23-41 Wenlock Road (Royle House)                                                                 New Build              Live-work
23-41 Wenlock Road (Royle House)                                                                 New Build              Live-work
6-24 Southgate Road                                                                              New Build              Live-work
Land Bordered By Britannia Walk, Nile Street, Provost Street And Ebenezer Street                 New Build              Live-work
50 - 60 Wharf Road                                                                               New Build




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                                      Analysis of a review of Planning Applications for Mixed Use Development
MIXED USE DEVELOPMENTS - DETERMINED                                                          New Build/Refurb   Live-work
238-240 Kingsland Road                                                                           New Build
8 - 14 Orsman Road                                                                               New Build
26-30 Southgate Road                                                                             New Build
2 - 26 Somerford Grove                                                                           New Build      Live-work
5-7 Wenlock Road                                                                                 New Build
2 - 46 Sedgwick Street                                                                           New Build
297-301 Kingsland Road                                                                           New Build      Live-work
Westland Place/Nile Street/Britannia Walk                                                        New Build      Live-work
Hornes House, 15 Ramsgate Street London E8                                                       New Build      Live-work
48 - 50 Well Street & 30-32 Shore Road                                                           New Build
35 37 & 39 Stoke Newington High Street                                                           New Build
1 - 7 Mackintosh Lane                                                                            New Build
92-100 Stoke Newington Road                                                                    Refurbishment    Live-work
273 - 277 Wick Road                                                                              New Build
284-288 Kingsland Road                                                                           New Build      Live-work
102-110 Mare Street                                                                              New Build
114 - 142 Mare Street & 11 - 15 Tudor Road                                                       New Build
14 Triangle Road                                                                                 New Build
3-23 Bentley Road                                                                                New Build
21-29 Shore Road                                                                                 New Build
1-3 Silesia Buildings                                                                            New Build
35 - 41 Westland Place                                                                           New Build
16 - 26 Westgate Street/Corner Of Triangle Road                                                 New Build
124-128 Shacklewell Lane                                                                       Refurbishment    Live-work
7 Shepherdess Place                                                                            Refurbishment    Live-work
32a Geldeston Road                                                                               New Build
Land Adjoining 112-122 Tabernacle Street                                                         New Build
Britannia Walk Industrial Units, 11-13 Ebenezer Street                                          New Build       Live-work




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Study of Small Business Workspace Provision in Hackney




                                      Analysis of a review of Planning Applications for Mixed Use Development
MIXED USE DEVELOPMENTS - DETERMINED                                                          New Build/Refurb   Live-work
Stamford Works Gillett Street                                                                  Refurbishment
21 - 31 Shacklewell Lane                                                                       Refurbishment    Live-work
Springfield House Tyssen Street                                                                Refurbishment    Live-work
20 Ramsgate Street                                                                               New Build      Live-work
167-171 Balls Pond Road                                                                          New Build
16-30 Provost Street                                                                             New Build
166-168 Shepherdess Walk                                                                         New Build
Land Adjacent To 15 Micawber Street                                                              New Build      Live-work
43a Manor Road                                                                                   New Build
9-13 Arcola Street                                                                               New Build
2 -16 Phipp Street                                                                               New Build
8 Long Street                                                                                    New Build
23-35 Waterson Street                                                                            New Build
Perseverance Works Waterson Street                                                               New Build      Live-work
16 Andrews Road                                                                                  New Build
9-11 Garden Walk                                                                                 New Build

LIVE-WORK SCHEMES
298-316 Kingsland Road &1a Arbutus Street                                                        New Build      Live-work
293-297 Kingsland Road                                                                         Refurbishment    Live-work
260 - 268 Kingsland Road                                                                         New Build      Live-work
1-6 Bateman's Row                                                                                New Build      Live-work
23-41 Wenlock Road (Wenlock Works)                                                               New Build      Live-work
Wenlock Works, Wenlock Road                                                                      New Build      Live-work
Enterprise House, Tudor Grove                                                                  Refurbishment    Live-work
57-59 Dalston Lane                                                                               New Build      Live-work

OTHER EXAMPLES – NOT DETERMINED




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Study of Small Business Workspace Provision in Hackney




                                   Analysis of a review of Planning Applications for Mixed Use Development
MIXED USE DEVELOPMENTS - DETERMINED                                                                    New Build/Refurb             Live-work
Eagle House Land Bounded By 159-189 City Road Britannia Walk Ebenezer Street & Westland Place   Part Refurbishment/Part New Build
London N1 7EH
1 Felstead Street                                                                                          New Build
23 - 47 Mare Street                                                                                        New Build
199 - 205 Richmond Road                                                                                    New Build
43 - 51 New North Road & 134 - 142 East Road                                                               New Build
1 Dunn Street                                                                                              New Build
17-21 Wenlock Road                                                                                         New Build
227 227a 227b 227c City Road & 4 Windsor Terrace                                                           New Build
79 -85 Hackney Road                                                                                        New Build
50 Acton Mews                                                                                              New Build
Babik House 124 - 130 Shacklewell Lane                                                                     New Build                Live-work




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Study of Small Business Workspace Provision in Hackney




                                 FULL DETAILS OF THE CASE STUDIES WHICH WERE REVIEWED

SOUTH SHOREDITCH

Address        No.               Development Description           Decision      Completed     Applicant         Design/description of        Occupation
                                                                                                                 Commercial Floorspace

OLD            SOUTH/261/99/FP   Erection of 8 and 12 storey       07/07/2000    21/05/2003    Gainsborough      B1 office space on ground    Majority
GAINSBOROUGH                     building with alterations to      Granted       CT Schedule   Studios Ltd,      and first floor              occupied
FILM STUDIOS                     existing building along Poole                                 Fitzroy Square,   B1 office space adjacent
NEW NORTH                        Street and extensions to                                      W1P 5AH           to canal.
ROAD/ IMBER                      provide 174 residential units
                                 78 live-work units and                                        Southern          Total office space of 2150
STREET/                                                                                        Housing           m2 .
                                 approximately 2,151m2 of B1
POOLE STREET                     floor space together with                                     Group/City &
                                 restaurant and film studios                                   Counties
                                 and provision of 174                                          Hsing,6-8 St
                                 basement parking with                                         Johns Sq
                                 landscaping.
                                                                                               EC1M 4NH

SHEPHERDESS    SOUTH/163/00/FP   Use of basement & ground          23/06/2000    Completed     Westcombe         11 No. B1 Units on           Ground Floor
PLACE                            floor as b1 use & 5 upper                       01/02/2001    Homes             Ground Floor of different    Vacant. No work
                                                                   Granted
CHOCOLATE                        floors for 20 live-work units &                 CT Schedule   1145a             sizes:                       on subdivision
STUDIOS                          14 flats + ext                    Standard                                                                   undertaken.
                                                                   Conditions                  Greenford Road    33.75 m2
                                 alterations/extensions.                                                         52.5 m2                      Agents state that
                                                                   relating to                 Greenford                                      commercial
                                                                   live-work.                                    67.5 m2
                                                                                               Middx             76.5 m2                      floorspace is not
                                                                                                                 80.75 m2                     on the market.
                                                                                               OB6 0DP
                                                                                                                 104.5 m2                     Some indication
                                                                                                                                              that the
                                                                                                                 8 No. B1 Units on Ground     basement is
                                                                                                                 Floor of different sizes:    occupied.

                                                                                                                 37.5 m
                                                                                                                        2                     Developer
                                                                                                                 56 m
                                                                                                                      2                       declined to
                                                                                                                 71.25 m2                     discuss.
                                                                                                                 199 m2




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Study of Small Business Workspace Provision in Hackney




                                                                                                             313.5 m2

THE CIRCUS      2005/0809         Erection of a 3 storey         30/09/2005   Not started   The Circus       First floor 5 no.             Likely occupiers
SPACE,                            extension to the existing      Granted                    Space, Coronet   workspaces with typical       not yet known.
CORONET                           combustion chamber building                               Street, N1 6HD   sizes:
                                                                                                                      2
STREET/HOXTON                     to provide an energy centre,                                               14.7 m
                                                                                                                     2
SQUARE                            creation structure,                                                        17.6m
                                  workspaces and associated                                                  Second floor 5 no.
                                  activities involving partial                                               workspaces with typical
                                  demolition of rear building.                                               sizes:
                                                                                                                     2
                                                                                                             12.8 m
                                                                                                                    2
                                                                                                             16.5m
                                                                                                             Mezzanine floor 6 no.
                                                                                                             workspaces with typical
                                                                                                             sizes:
                                                                                                                  2
                                                                                                             11 m
                                                                                                             8.5m2


23-41 WENLOCK   SOUTH/756/98/FP   Redevelopment involving        17/02/2000   23/04/2002    Lemon Land Ltd                   2
                                                                                                             Total of 2040 m of B1
ROAD                              new 3, 4 & part 6 storey       Granted      VOA
                                                                                                             floorspace in 12 units of
(ROYLE HOUSE)                     building to provide 49 live-                                               varying sizes located
                                  work units, b1 floor space                                                 mostly on the ground floor.
                                  and car parking
                                                                                                             Ground Floor:
                                                                                                             Sizes range
                                                                                                                   2
                                                                                                             295 m
                                                                                                             235 m2
                                                                                                             325 m2
                                                                                                             350 m2
                                                                                                             Southernmost end of 3
                                                                                                             storey building also
                                                                                                             contains B1 element on
                                                                                                             upper floors.
                                                                                                             49 live-work units
                                                                                                             Range 75 m2
                                                                                                             to 110 m2.




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Study of Small Business Workspace Provision in Hackney




7-27 DRYSDALE   SOUTH             Construction of 12 Flats, 27     22/03/1999   Completed     City Lofts      Ground Floor:              6 remaining
STREET N1 6ND   169/99/FP/A       live-work, 25 commercial         Granted                    Developments.   9 no. units
                                  B1,B2, B8 units and 30 car                                                        2                    Average Price
                                                                                                              39.6m                      per m2
                                  parking spaces.                                                             39.6m2                     £2144
                                                                                                              57.3m2
                                                                                                              49.1m2
                                                                                                              63.8m2
                                                                                                              77.8m2
                                                                                                              195.5m2
                                                                                                              478.3m2
                                                                                                              209.7m2
                                                                                                              First Floor
                                                                                                              5 no. units
                                                                                                              78.9 m2
                                                                                                              140.67 m2
                                                                                                                       2
                                                                                                              90.99 m
                                                                                                              111.81 m2
                                                                                                                       2
                                                                                                              97.12 m
                                                                                                              Second Floor
                                                                                                              5 no. units
                                                                                                              119.93 m2
                                                                                                              139,86 m2
                                                                                                                        2
                                                                                                              120.33 m
                                                                                                              124.91 m2
                                                                                                                      2
                                                                                                              95.96 m

PERSEVERANCE    SOUTH/196/99/FP   Partial redevelopment of car     26/08/1999   Completed     Giltarc Ltd     Ground Floor:              7 occupied
WORKS                             park by a 3 storey building to                01/03/2004                    8 no. units                1 vacant
                                                                   Granted                    Wharfdale
WATERSON                          provide 8 b1 units 11 live/                   VOA           House           7@ 42 m2
STREET                            work units and 10 flats                                                     1@60 m2
                                                                                              42-46 Wharf
                                                                                              Dale Road
                                                                                              London N1 9RY
                                                     st                                                        st           2        2
16/17 HOXTON    2003/2437         Change of use of 1 floor to      19/12/2003   Implemented   Capital &       1 Floor 33.3 m plus 9 m    Occupied
SQUARE N1 6NT                     mixed B1/D1 (offices and         Granted                    Provident
                                  crèche)




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Study of Small Business Workspace Provision in Hackney




BRITANNIA WALK   2002/1217         Erection of a part 4 and a       Decided at   Started         Goldcrest         Ground Floor:                3 B1 units
                                                                                                                               2
INDUSTRIAL                         part 5 storey building to        Appeal       19 April 2004   Homes             Unit 1 56 m                  remain vacant.
UNITS, 11-13                       provide B1 office floorspace     04/03/2003                   (Britannia) Ltd   Unit 2 94.5 m2               Evidence
EBENEZER                           (1291sqm) on the ground                       NHBC records                      Unit 3 94.5 m2
                                                                                                 Unit 7                                         obtained
STREET                             floor, and 60 sqm on the first                                Hurlingham        Unit 4 84 m2                 indicates that
                                   floor, 18 live-work units on                                  Business Park     Unit 5 54 m2                 only 1 live-work
                                   the first and second floors                                                     Unit 5a 926 m2               unit used for
                                   and 14 residential flats                                      Sulivan Road      Unit 6 69 m2                 employment
                                   comprising 12x2 bedroom                                       London SW6        Unit 7 100.6 m2              purposes.
                                   and 2x1 bedroom on the third                                  3DU               Unit 8 117 m2
                                   and fourth floors, together                                                     Unit 9 117 m2                Occupiers
                                   with 5 car parking spaces,                                                      Unit 10 60 m2                regard Old
                                   bicycle racks, altered vehicle                                                  Unit 11 56 m2                Street as good
                                   access to Britannia Walk and                                                                                 location citing
                                                                                                                   18 live-work units           proximity to
                                   demolition of existing
                                   buildings.                                                                      Only 1 of these apparently   public transport.
                                                                                                                   used for work.               reasonably safe
                                                                                                                                                environment for
                                                                                                                                                female
                                                                                                                                                employees and
                                                                                                                                                ability to
                                                                                                                                                purchase
                                                                                                                                                freehold.
                                                                                                                                                2 occupiers are
                                                                                                                                                engaged in
                                                                                                                                                travel industry.
                                                                                                                                                One of these
                                                                                                                                                purchased
                                                                                                                                                property.
                                                                                                                                                3 vacancies

LAND             SOUTH/831/99/FP   Erection of parts 5 & 6 storey   05/05/2000   01/10/2002      Islington &       Ground Floor:                Offices on
BORDERED BY                        +basement building to form       Granted      VOA             Shoreditch Ha     578 m2                       Ground Floor.
BRITANNIA                          80 flats 6 live-work units                                    Unit              153.4 m2                     All appear to be
WALK, NILE                         office light industrial uses &                                7,Shepperton      Pharmacy 271 m2              occupied.
STREET,                            carpark                                                       Road, London                                   Clinic/Pharmacy.
PROVOST                                                                                          N13df
STREET AND                                                                                       Moorfields Eye




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EBENEZER                                                                                     Hospital, City
STREET                                                                                       Road, London
                                                                                             EC1V 2PD


50 - 60 WHARF   2004/2702     Erection of a part 3 part 5       16/09/2005   Not built. No   The Workspace     Basement:                    Not started
ROAD                          part 6 part 8 and part 10         Granted      start details   Group Plc         5 no. B1 units
                              storey building to provide 77                  LDD             C/O The           Ground Floor:
                              residential units (19 x 1 bed                                  Halpern           13 no B1 units
                              32 x 2 bed 20 x 3 bed and 6 x                                  Partnership Ltd
                              4 bed) and 5879 square                                                           First Floor:
                              meters (GEA) of B1 (office)                                    The Royle         7 no. B1 units.
                              floor space together with 46                                   Studios           Second Floor:
                              car parking spaces and 70                                      41 Wenlock        7 no. B1 units.
                              cycle spaces at basement                                       Road              Third Floor:
                              level and demolition of the
                                                                                             London N1 7SG     7 no. B1 units.
                              existing buildings.
                                                                                                               Fourth Floor:
                                                                                                               7 no. B1 units.
                                                                                                               Fifth Floor:
                                                                                                               6 no. B1 units.
                                                                                                               Range of sizes e.g.:
                                                                                                               13 m2
                                                                                                               25 m2


SARA LANE       2003/0953     Conversion of existing            27/06/2003   Completed       Arts Services     Total of 40 studios on the   Most units
COURT,                        basement and ground floor         Granted                      Grants, 129-132   site.                        appear to be
STANWAY                       ancillary storage to 18 artists                                Mare Street,      Basement sizes:              occupied.
STREET N1                     studios.                                                       E8 3RH            30 m
                                                                                                                    2
                                                                                                                                            Built to stem the
                                                                                                               22 m2                        loss of artists’
                                                                                                               Complements the 22           studio
                                                                                                               SPACE studios already at     space in Hoxton
                                                                                                               the site.                    to residential
                                                                                                               50% of the new               developments
                                                                                                               studios are wheelchair       and rising
                                                                                                               accessible.                  business rents.




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Study of Small Business Workspace Provision in Hackney




MIXED USE DEVELOPMENTS
DALSTON


Address               No.              Development                 Decision        Completed     Agent             Design of              Occupation
                                       Description                                                                 Commercial
                                                                                                                   Floorspace

9-13 ARCOLA STREET    NORTH/1010/00/   Erection of part 3 and      06/12/2001      Completed     BURGESS           Workshop 205m2 in      Offices are fully
                      FP               part 4 storey building to   Granted         24/06/2003    MEAN              basement (suitable     occupied.
                                       provide 12x1bed flats                                     ARCHITECTS        for subdivision)
                                       and 296m2 of B1 use         Condition:      CT Schedule
                                                                   Development                   3, COWPER         3 offices on ground
                                       on ground floor.                                          ROAD              floor
                                                                   can only be
                                                                   carried out                   LONDON
                                                                   by NIHHA or                   SW19 1AA
                                                                   other
                                                                   registered
                                                                   HA>
                                                                   Reason:
                                                                   Scheme only
                                                                   acceptable
                                                                   because it is
                                                                   a HA.

124-128 SHACKLEWELL   SOUTH/614/00/F   Change of use of bldg       14/02/2001      Completed     YEATES            2 ground floor         Unit One
LANE                  P                to 627sqm b1, 14 flats,     Granted         15/03/2002    DESIGN &          commercial units.      Vacant – never
                                       19 live/ work units with                                  ARCHITECTUR       Unit One 523 m2 ;      been occupied.
                                                                                   VOA
                                       13 car bays, new 3rd flr                                  E                 Unit Two 140 m2 .
                                       extn & alteration.                                        74                21 live-work units
                                                                                                 CLERKENWELL       ranging in size from
                                                                                                 ROAD              71 m2 to 82m2 .
                                                                                                 LONDON
                                                                                                 EC1M 5NL

124-128 SHACKLEWELL   2001/1264        Change of use and           02/05/2002                    Yeates Design &
                                       conversion of ground




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Study of Small Business Workspace Provision in Hackney




LANE                                floor to 6 live-work units   Refused                               Architecture
                                    and a residential studio.                                          74 Clerkenwell
                                                                                                       Road
                                                                                                       London
                                                                                                       EC1M 5NL

HORNES HOUSE            2003/1772   Erection of a part 10,       21/12/2004      Not built. No start   Waugh
15 RAMSGATE STREET                  part 4 storey building to    Granted         details LDD           Thistleton
LONDON E8                           provide 1242sqm of                                                 Limited
                                    class B1 space; 4 live-      Condition:
                                                                 Completion                            51 Great
                                    work units; and 48                                                 Eastern Street
                                    residential units,           of
                                    demolition of existing       employment                            London
                                    building.                    floorspace to                         EC2A 3HP
                                                                 shell and
                                                                 core
                                                                 condition
                                                                 prior to
                                                                 residential
                                                                 occupation.
                                                                 Reason: To
                                                                 ensure
                                                                 provision of
                                                                 industrial
                                                                 floorspace.

THE CHOCOLATE           2004/1563   Change of use of             3/8/2004                              Peter Bernamont    8 General Studios on   All fully let.
FACTORY                             existing vacant factory      Granted                               Wharf Studios      Ground Floor
MARSHA LYNE WORKS                   to 16 artists studios and    1/12/2004                             Baldwin Terrace,   ranging from 33 m2
                                    2 self contained 1 bed                                             N1 7RU.            to 16.5 m2.
FARLEIGH PLACE N16                  units and extension at                                                                8 Artists Studios on
                                    first floor.                                                                          First Floor ranging
                                                                                                                          from 28.5 m2 to 16
                                                                                                                            2
                                                                                                                          m.

11a GILLET STREET N16   2003/0648   Erection of 4 storey         17/4/2003.                            Russell Brown,     4 studios on second
                                    building to provide          Granted                               Hawkins/Brown      and third floors
                                    gallery and café (AB)        17/4/2003                             Architects         ranging in size from
                                                                                                                               2
                                    on ground floor, music                                             60 Bastwick        68 m of floor area




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                                    venue (D@) and           Street     on second floor and
                                                                             2
         QuickTime™ and a
                                    employment use (B!) on   EC1V 3TN   63 m on third floor.
     TIFF (LZW) decompressor
  are needed to see this picture.
                                    upper floors.




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Study of Small Business Workspace Provision in Hackney




MIXED USE DEVELOPMENTS
KINGSLAND BASIN/KINGSLAND ROAD


238-240       2002/1671         Redevelopment of part 5      20/07/2005    Started 15   Community       CGMS Limited   1595 m2        Still under
KINGSLAND                       and 6 storey block and a     Granted       June 2005    Housing         7th Floor      offices        construction.
ROAD                            4 storey block to provide                  NHBC         Association     Newspaper      proposed.
                                1862sqm business (B1)                      records      c/o CgMs        House          No details
                                space, 216sqm                                           Limited
                                business/restaurant/bar                                                 8-16 Great
                                use (B1/A3) and 73                                                      New Street
                                residential units with                                                  London EC4A
                                associated parking and                                                  3BN
                                vehicular accesses.

284-288       2002/2112         Erection of a part 4 and     24/09/2003    Completed    Investland      Hepher Dixon    Original      Now 6 no. B1
KINGSLAND                       part 7 storey block                                     (Kingsland)     Limited        Drawings       units:
                                                             Decision      21/06/2005                                                 70 m
                                                                                                                                           2
ROAD                            adjacent to Kingsland        from Appeal                Limited         100 Temple     Ground
                                Road; erection of a 5                                                                                 81 m2
                                                                                        OCC Estate      Avenue         Floor:              2
                                storey block along Lee                                                                                87 m
                                                                                                                       2 no. B1
                                Street and erection of a 7                              105 Eade Road   London EC4Y                   70 m2
                                                                                                                       units               2
                                                                                                        0HP                           80 m
                                storey block adjacent to                                London N4 1TJ                  168m2
                                                                                                                                      71 m2
                                Acton Mews, to provide                                                                 153m2
                                1441sqm of B1                                                                                         Average sale
                                (Business)                                                                             First Floor:
                                                                                                                                      price £2869 per
                                                                                                                       2 no. B1
                                accommodation; 14 live-                                                                               m2 .
                                work units, 31 residential                                                             units
                                                                                                                             2
                                units and basement car                                                                 253m           Marketed as
                                parking (Revised                                                                       252m2          Haggerston
                                Scheme of                                                                                             Studios.
                                                                                                                       14 live-work
                                SOUTH/411/00/FP).                                                                                     Live-work
                                                                                                                                      occupied by
                                                                                                                                      artists, product
                                                                                                                                      designers.
298-316       SOUTH/871/00/FP   Erection of 8,7,5 storey     09/11/2001    Completed    NEPTUNE         STEPHEN        Ground         Range of units
KINGSLAND                       bldg 5th fl extension to a   Granted       01/09/2005   ESTATES         DAVY/PETER     Floor:         available Min size
ROAD &                          retained bldg for 1310m2                                LIMITED         SMITH ARCHS    B1 units 918   80 m2
                                                                                                                         2
1A ARBUTUS                      b1 fl. space, 101 live-                                 125             77 EAST        m              Max size 326




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Study of Small Business Workspace Provision in Hackney




STREET                          work units & parking.                                  CLOUDESLEY    ROAD                          m2.
                                                                                       ROAD          LONDON        Lower
                                                                                       LONDON        N1 6AH        Ground:         Leasehold £15
                                                                                                                   B1 units 488    Per Sq. Ft.
                                                                                                                     2
                                                                                                                   m
                                                                                                                                   The available
                                                                                                                   Upper
                                                                                                                                   units are situated
                                                                                                                   Ground:
                                                                                                                                   on the ground
                                                                                                                   B1 units 767
                                                                                                                     2             floor apparently
                                                                                                                   m                  2
                                                                                                                                   m ideal for media
                                                                                                                   First Floor:    related
                                                                                                                   B1 units 405    businesses and
                                                                                                                   m2              photographic
                                                                                                                                   studios.
                                                                                                                   Second
                                                                                                                   Floor:
                                                                                                                   B1 units 386
                                                                                                                   m2
                                                                                                                   Third Floor:
                                                                                                                   B1 units 367
                                                                                                                   Lower
                                                                                                                   Ground:
                                                                                                                   B1 units 488
                                                                                                                   m2
                                                                                                                   m2


                                                                                                                   101 live-work
                                                                                                                   units
297-301       SOUTH/366/99/FP   erection of 3 four-storey    23/06/2000   15/01/2002   LEMON LAND    STEPHEN       Ground Floor    A number of units
KINGSLAND                       buildings for 52 private &                             LTD           DAVY PETER    8 No. B1        remain vacant.
                                                             Granted      CT                                       units:
ROAD                            5 social live-work units,                 Schedule     C/O STEPHEN   SMITH ARCH.
                                13 b1 units, parking &                                                             @ 54m2          Evidence that
                                                                                       DAVY          39-41 NORTH   each unit       some units
                                landscaping.                                                         ROAD                          occupied by
                                                                                       PETER SMITH                 Ground Floor
                                                                                       ARCHITECTS    ISLINGTON                     artists -
                                                                                                                   5 No. B1        (Rachmaninoff’s
                                                                                       39-41 NORTH   LONDON        units:          Studios Unit 106)
                                                                                                                          2
                                                                                       ROAD                        @ 54m




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Study of Small Business Workspace Provision in Hackney




                                                         ISLINGTON   N7 9DP   each unit      Fashion – (Scott
                                                                              47 No. live-   Filippa Unit GO7)
                                                                              work units @
                                                                              84m2 each
                                                                              unit
                                                                              2 No. social
                                                                              live-work
                                                                              units @ 84m2
                                                                              each unit
                                                                              3 No. social
                                                                              live-work
                                                                              units @ 51m2
                                                                              each unit




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      Study of Small Business Workspace Provision in Hackney



      MIXED USE DEVELOPMENTS
      MARE STREET


21-29 SHORE    2002/1928    Erection of five storey building to        18/06/2004   Unsure –      Ruth Yani      Rivington Street   Ground Floor:           1 Ground
ROAD                        provide 2 floors of B1 use on the          Granted      VOA           c/o Liss       Studio             6 No. B1 Units          Floor unit to let
                            lower floors and residential use on the                 suggests 10   Gulhane        54 Rivington       39m2                    First Floor not
                            three upper floors. There are 11 x B1                   flats at 29   Innes          Street             39.2m2                  known
                            units and 17 flats, comprising of 8                     Shore Road    (Solicitors)                      65m2
                            two-bedroom and 9 one-bedroom                                                        London             63m2
                            flats.                                                                1 Junction     EC2A 3QN           63m2
                                                                                                  Road                              63m2
                                                                                                  Romford                           First Floor
                                                                                                  RM1 3QS                           5 No. B1 Units
                                                                                                                                    82.5m2
                                                                                                                                    63m2
                                                                                                                                    61m2
                                                                                                                                    61m2
                                                                                                                                    61m2

LAND AT 257-   2001/1443    Redevelopment involving erection of        11/12/2003   Partially     Fortville      GML Architects     Ground Floor:
269 MARE                    4, 5, and part 4, 6 and 15 storey          Granted      completed     1 Allsop       7 Garrett St       1 large area 6814 m2
STREET 280-                 height buildings; together with single                                Place
288                         storey extension and refurbishment of                                                London
RICHMOND                    a retained 4 storey building to                                       London         EC1Y 0TY
ROAD AND                    provide 142 flats, 17 live-work units                                 NW1 5LF
MARTELLO                    and 6814 sq.m. of commercial
STREET                      floorspace.



11-20 TUDOR    SOUTH/500/   external alterations, 4th flr extension,   24/08/2000   Completed     EAST           ALLFORD HALL       Ground Floor:           At least 4 units
GROVE          99/FP        conversion of upper flrs into 8 res        Granted      01/04/2001    CITY           MONAGHAN                               2
                                                                                                                                    B1 floorspace 1153 m    appear to be
                            units/27 live/ work units.                                            INVESTM        MORRIS             total.                  occupied. All
                                                                                                  ENTS           5-23 OLD                                   social
                                                                                                  LIMITED        STREET             7 units average size
                                                                                                                                    167.2 m2                providers.
                                                                                                  C/O 7          LONDON
                                                                                                  CHESTER        EC1V 9HL           First Floor:            NSPCC




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     Study of Small Business Workspace Provision in Hackney



                                                                                 FORD                         235 m2 live work        City & hackney
                                                                                 GARDENS                      6 no. 1 bed no. 1 bed   Carers
                                                                                                                     2
                                                                                 LONDON                       @77m                    Addction
                                                                                 NW3 7DD                      3 no. 2 bed@109m2       Hackney.
                                                                                                              Second Floor:           City And
                                                                                                              235 m2 live work        Hackney
                                                                                                              6 no. 1 bed             Association
                                                                                                              3 no. 2 bed             For Mental
                                                                                                              Third Floor:            Health
                                                                                                              235 m2 live work        Live-work units
                                                                                                              6 no. 1 bed             advertised as
                                                                                                              3 no. 2 bed             residential.


11-20 TUDOR   2001/0953   Development: Change of Use of 6 X         06/03/2002   Ability     Steve Georgiou
GROVE                     B1 units on the ground floor to 7 Live-   Refused      Developme   10 Whitehouse
                          Work Units                                Loss of      nts LTD     Way
                                                                    employment   16-26       Southgate
                                                                    generating   Banner      London
                                                                    floorspace   Street      N14 7LT
                                                                                 London
                                                                                 EC1Y 8QE
11-20 TUDOR   2002/0293   Development: Change of Use of 6 X         24/10/2002   Ability     Steve Georgiou
GROVE                     B1 units on the ground floor to 7 Live-   Refused      Developme   10 Whitehouse
                          Work Units                                Loss of      nts LTD     Way
                                                                    employment   16-26       Southgate
                                                                    generating   Banner      London
                                                                    floorspace   Street      N14 7LT
                                                                                 London
                                                                                 EC1Y 8QE




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Study of Small Business Workspace Provision in Hackney


APPENDIX 3

                  DEVELOPMENT ECONOMICS OF HORNES HOUSE

Background

The market for B1 space throughout the London area is presently depressed and
rent levels have fallen compared to those being seen around 2002. At that time,
generally speaking, the provision of B1 space in primarily live-work and residential
developments in Hackney would, at best, break even. However, with falling rent
levels and, at the same time, increasing construction costs, the situation appears to
be at a point where development of B1 space now shows a significant loss.

The Hornes House proposal in Ramsgate Street proposed a gross area for the B1
space of 13, 371 sq ft (1,243 sq m). The gross internal saleable area to be provided
was calculated at 11, 751 sq ft (1,092 sq m).

Assuming that the B1 space will be provided to a shell finish, with all services
available to the unit, rental levels would be £10 psf.

In terms of capital values, a capitalisation yield of 7.5% was assumed. With
deductions for purchasers’ acquisition costs, a capital value rate of £126 psf and a
gross development value of £1,480,626 was estimated.

In assessing the site value/loss the following assumptions were made:

       •     profit as 15%
       •     professional fees at 12%
       •     internal overheads at 10%
       •     finance at 10%
       •     marketing fees at 4%
       •     contractors return at 10%

These were applied to the above gross development value and to the following
building costs:

£85psf (£914.96 psm) for the accommodation within a low rise building
£135 psf (£1,453.17 psm) for accommodation within a high rise building

These rates were applied to the gross internal area and it was calculated that they
represent approximately £113.34 psf (£1,220 psm) and £139.46 psf (£1,501 psm)
based on the gross internal saleable area.

Other assumptions made were:

   •       3 month lead in period
   •       24 month construction period
   •       9 month average sales void

Allowing also for purchasers costs on site value, it was calculated that the B1 space
would show a loss in terms of site value of £664,655.




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Study of Small Business Workspace Provision in Hackney



                              B1 APPRAISAL
15 Ramsgate Street, London
GDV                                 11,751   @ £126                1,480,626
Costs
Sales at 4%                                              £59,225
Build (Tower) 3,907                          @ £135                £527,445
Build (Low) 9,464                            @ £85                 £804,440
Contractors Overheads at 10%                                       £133,188
Internal Overheads at 10%                                          £146,507
Fees at 12%                                                        £193,390
Interest   at   10%     compounded                                 £107,317
quarterly for 3 months lead in, 24
months build and 9 month sales void
Developers Return at 15%                                           £185,400

                                                                   -£676,286
Less costs at 1.75%
                                                                   -£664,655




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                 Study of Small Business Workspace Provision in Hackney


                 APPENDIX 4

                                                                  STRATEGIC MODEL

ALL HACKNEY                                        AREA FLOORSPACE DEMAND AND SUPPLY MODEL
                                                                           Manufacturing Construction        Distribution   Transport/comms Banking and    Business        Other           Total
                                                                                                                                            Finance        Services        services

                                                   Factor

Local Business Activity Data
No. Business Units                                                                 872             276               529              340           118         1678              687               4500
Hackney Annual Employment Growth                                                    -53             -67              342              966           296           575            -322               1737



Relocation Replacement Floorspace Demand
Propensity to Relocate
Time horizon for considering relocation (months)             60                      60                 60             60              60             60              60              60              60
Propensity to relocate                                      34%                   33%             35%               40%              42%           32%           34%             30%                34%
Businesses wishing to relocate in Hackney area              31%                   19%             25%               24%              20%           18%           49%             31%                31%
Propensity to relocate in surrounding area                  30%                   33%             38%               24%              20%           41%           30%             27%                30%
Factor for retention in Hackney                             0%                      0%              0%                0%              0%             0%               0%              0%             0%
Projected relocations retained in Hackney                   31%                   19%             25%               24%              20%           18%           49%             31%                31%
Optimism bias adjustment                                    80%                   80%             80%               80%              80%           80%           80%             80%                80%
Propensity to relocate in Hackney                           8%                      5%              7%                8%              7%             5%          13%                  7%             8%
Demand snapshot timeframe (months)                           12                      12                 12             12              12             12              12              12              12
Propensity to relocate                                1.69%                    1.00%           1.40%             1.54%            1.34%         0.92%         2.67%           1.49%                1.69%
Total Current Businesses Relocating                                               8.75            3.86              8.13             4.57          1.09        44.73            10.22              75.89


Floorspace requirements


Projected Mean existing space Employment Based                                   2533            2775              3061             7748          2102          2004              778               2506
Replacement space exc. growth                                                  22158           10723             24872            35405           2286         89636             7953          193034


Employment Growth Demand
Share of Annual Employment Growth                                            100.0%          100.0% 100.0%                      100.0%        100.0% 100.0% 100.0%                             100.0%
Floorspace ratio/employment density sqft                                           365             365               540              205           215           205             205
Total incremental floorspace required sqft                                    -19345          -24455 184680                     198030          63640 117875                 -66010            454415


Total Floorspace Required Exc Exceptional                                        2813         -13732 209552                     233435          65926 207511                 -58057            647449


Exceptional Demand
1-500                                                       400      350                                                                                     140000
501-1000                                                    300      750                                                                                     225000
1001-2000                                                    50     1500                                                                                       75000
2001-3000                                                                                                                                                              0
3001-4000                                                                                                                                                              0
4001-5000                                                                                                                                                              0
5001-10,000                                                                                                                                                            0
10,000-15000                                                                                                                                                           0
Sub Total                                                   750                                                                                              440000



Total Floorspace Required                                                        2813         -13732 209552                     233435          65926 647511                 -58057 1087449




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                   Study of Small Business Workspace Provision in Hackney


ALL HACKNEY                             AREA FLOORSPACE DEMAND AND SUPPLY MODEL
                                                            Manufacturing Construction       Distribution       Transport/comms Banking and       Business        Other           Total
                                                                                                                                Finance           Services        services

                                        Factor

Allocation of Demand by Use
Offices                                                              5%            80%              55%                  66%           97%              45%             67%
Light industrial                                                   30%             10%                0%                 30%             1%                  9%              8%
Studio                                                               0%              0%               0%                  0%             0%             45%             20%
General industrial                                                 65%               0%               0%                  0%             0%                  0%              0%
Warehouse storage                                                    0%            10%              45%                   4%             2%                  1%              5%
Total                                                            100%            100%             100%                 100%          100%             100%            100%


Demand by Sector and Size


Offices
Total Requirement                                                   141        -10986 115254                        154067          63948             93380         -38898            376906
1-500 sqft                                  6.02%     350              8           -661            6939                 9276          3850            68622           -2342               85693
501 - 1000 sqft                             8.95%     750             13           -983          10314                13787           5723 109606                     -3481           134978
1001 - 2000 sqft                          12.36%     1500             17         -1358           14249                19047           7906            45294           -4809               80346
2001 - 3000 sqft                          10.78%     2500             15         -1184           12426                16611           6895            10068           -4194               40636
3001 - 4000 sqft                            7.55%    3500             11           -829            8698               11628           4826             7047           -2936               28445
4001 - 5000 sqft                            5.82%    4500              8           -640            6710                 8970          3723             5437           -2265               21944
5001-10,000 sqft                          16.17%     7500             23         -1777           18639                24916         10342             15102           -6291               60954
10-15,000 sqft                            32.34%    12500             45         -3553           37278                49832         20684             30203         -12581            121909
Total Requirement                           100%                    141        -10986 115254                        154067          63948 291380                    -38898            574906


Studio
Total Requirement                                                      0                 0                  0                0                0       93380         -11611                81769
1-500 sqft                                  6.02%     350              0                 0                  0                0                0       68622             -699              67923
501 - 1000 sqft                             8.95%     750              0                 0                  0                0                0 109606                -1039           108567
1001 - 2000 sqft                          12.36%     1500              0                 0                  0                0                0       45294           -1435               43859
2001 - 3000 sqft                          10.78%     2500              0                 0                  0                0                0       10068           -1252                8816
3001 - 4000 sqft                            7.55%    3500              0                 0                  0                0                0        7047             -876               6171
4001 - 5000 sqft                            5.82%    4500              0                 0                  0                0                0        5437             -676               4761
5001-10,000 sqft                          16.17%     7500              0                 0                  0                0                0       15102           -1878               13224
10-15,000 sqft                            32.34%    12500              0                 0                  0                0                0       30203           -3756               26448
Total Requirement                                                      0                 0                  0                0                0 291380              -11611            279769


Light industrial
Total Requirement                                                   844          -1373                      0         70031             659           18676           -4645               84192
1-500 sqft                                  6.02%     350             51             -83                    0           4216              40          13724             -280              17669
501 - 1000 sqft                             8.95%     750             76           -123                     0           6267              59          21921             -416              27784
1001 - 2000 sqft                          12.36%     1500           104            -170                     0           8658              82           9059             -574              17159
2001 - 3000 sqft                          10.78%     2500             91           -148                     0           7550              71           2014             -501               9077
3001 - 4000 sqft                            7.55%    3500             64           -104                     0           5285              50           1409             -351               6354
4001 - 5000 sqft                            5.82%    4500             49             -80                    0           4077              38           1087             -270               4902
5001-10,000 sqft                          16.17%     7500           136            -222                     0         11326             107            3020             -751              13616
10-15,000 sqft                            32.34%    12500           273            -444                     0         22651             213            6041           -1502               27232
Total Requirement                                                   844          -1373                      0         70031             659           58276           -4645           123792


General industrial
Total Requirement                                                 1829                   0                  0                0                0               0               0            1829
1-500 sqft                                  6.02%     350           110                  0                  0                0                0               0               0             110
501 - 1000 sqft                             8.95%     750           164                  0                  0                0                0               0               0             164
1001 - 2000 sqft                          12.36%     1500           226                  0                  0                0                0               0               0             226




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ALL HACKNEY                             AREA FLOORSPACE DEMAND AND SUPPLY MODEL
                                                            Manufacturing Construction       Distribution       Transport/comms Banking and       Business       Other          Total
                                                                                                                                Finance           Services       services

                                        Factor

2001 - 3000 sqft                          10.78%     2500           197                  0                  0                0                0              0              0             197
3001 - 4000 sqft                            7.55%    3500           138                  0                  0                0                0              0              0             138
4001 - 5000 sqft                            5.82%    4500           106                  0                  0                0                0              0              0             106
5001-10,000 sqft                          16.17%     7500           296                  0                  0                0                0              0              0             296
10-15,000 sqft                            32.34%    12500           591                  0                  0                0                0              0              0             591
Total Requirement                                                 1829                   0                  0                0                0              0              0            1829


Warehouse storage
Total Requirement                                                      0         -1373           94298                  9337          1319             2075          -2903          102753
1-500 sqft                                  6.02%     350              0             -83           5678                   562             79           1525            -175              7587
501 - 1000 sqft                             8.95%     750              0           -123            8438                   836           118            2436            -260             11445
1001 - 2000 sqft                          12.36%     1500              0           -170          11658                  1154            163            1007            -359             13453
2001 - 3000 sqft                          10.78%     2500              0           -148          10167                  1007            142              224           -313             11078
3001 - 4000 sqft                            7.55%    3500              0           -104            7117                   705           100              157           -219              7755
4001 - 5000 sqft                            5.82%    4500              0             -80           5490                   544             77             121           -169              5982
5001-10,000 sqft                          16.17%     7500              0           -222          15250                  1510            213              336           -469             16618
10-15,000 sqft                            32.34%    12500              0           -444          30500                  3020            426              671           -939             33235
Total Requirement                                                      0         -1373           94298                  9337          1319             6475          -2903          107153


Total
Total Requirement                                                 2813         -13732 209552                        233435          65926 207511                   -58057           647449
1-500 sqft                                  6.02%     350           169            -827          12617                14055           3969 152494                    -3496          178982
501 - 1000 sqft                             8.95%     750           252          -1229           18752                20889           5899 243570                    -5195          282938
1001 - 2000 sqft                          12.36%     1500           348          -1698           25907                28859           8150 100654                    -7177          155043
2001 - 3000 sqft                          10.78%     2500           303          -1481           22593                25168           7108            22373          -6259              69805
3001 - 4000 sqft                            7.55%    3500           212          -1036           15815                17618           4975            15661          -4382              48863
4001 - 5000 sqft                            5.82%    4500           164            -800          12200                13591           3838            12081          -3380              37695
5001-10,000 sqft                          16.17%     7500           455          -2221           33889                37752         10662             33559          -9389          104707
10-15,000 sqft                            32.34%    12500           910          -4442           67779                75504         21323             67119        -18778           209415
Total Requirement                                                 2813         -13732 209552                        233435          65926 647511                   -58057 1087449




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                                                          ANALYSIS OF FLOORSPACE SUPPLY, DEMAND AND EXCESS/SHORTFALL, ALL HACKNEY
                    Use
                    B1a                                                                                B1b                                   B1c                                                            B2
                    Offices new       Offices second-hand high Offices older low-cost   Sub Total      Studio/R&D Flexible      Sub Total    Light            Light            Light Industrial Sub Total   General General             Sub         B8
                                      standard                                                                                               Industrial       Industrial       older low-cost               industrial industrial       Total       Warehousing
                                                                                                                                             new              second-                                       new        second-                      and Storage
                                                                                                                                                              hand high                                                hand
                                                                                                                                                              standard




                                                                                                                                                                                                                                                                  Total

Floorspace Supply
Area:
Supply Snapshot
1-500 sqft                        0                     7692                      621          8313          1305       2081         3386                 0           300                    0        300           0               0           0         3150       15149
501 - 1000 sqft                   0                     9859                    5710         15569           7560       3307        10867                 0         3694                1721        5415            0               0           0             0      31851
1001 - 2000 sqft                  0                    81150                  32748         113898        30134       22851         52985                 0       23388               27845       51233             0               0           0             0 218116
2001 - 3000 sqft                  0                    35114                  20335          55449        13736       18188         31924                 0       17817               17742       35559             0               0           0             0 122932
3001 - 4000 sqft                  0                    51628                  24688          76316           1955     10523         12478          3624           10480               18815       32919             0               0           0             0 121713
4001 - 5000 sqft           9322                        31382                    8712         49416              0     18470         18470                 0       26605               13127       39732             0               0           0             0 107618
5001-10,000 sqft                  0                    58489                  47293         105782              0     25408         25408        13033                     0          49283       62316             0               0           0             0 193506
10-15,000 sqft                    0                    12267                  10165          22432        13230       10847         24077                 0       14276               45616       59892             0               0           0             0 106401
TOTAL                      9322                      287581                  150272         447175        67920      111675       179595         16657            96560              174149 287366                  0               0           0         3150 917286


Assumptions on Annual Floorspace Turnover


1-500 sqft                 1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
501 - 1000 sqft            1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
1001 - 2000 sqft           1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
2001 - 3000 sqft           1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
3001 - 4000 sqft           1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
4001 - 5000 sqft           1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
5001-10,000 sqft           1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1
10-15,000 sqft             1.33                          1.33                    1.33           1.33         1.33        1.33         1.33          1.33             1.33                1.33        1.33        1.33       1.33          1.33            1.33               1




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                                                         ANALYSIS OF FLOORSPACE SUPPLY, DEMAND AND EXCESS/SHORTFALL, ALL HACKNEY
                   Use
                   B1a                                                                                  B1b                                   B1c                                                            B2
                   Offices new       Offices second-hand high Offices older low-cost       Sub Total    Studio/R&D Flexible       Sub Total   Light            Light            Light Industrial Sub Total   General General             Sub         B8
                                     standard                                                                                                 Industrial       Industrial       older low-cost               industrial industrial       Total       Warehousing
                                                                                                                                              new              second-                                       new        second-                      and Storage
                                                                                                                                                               hand high                                                hand
                                                                                                                                                               standard




                                                                                                                                                                                                                                                                   Total
Estimated Annual
Supply


1-500 sqft                       0                    10230                      826            11056         1736       2768          4503                0           399                    0        399           0               0           0         4190            20148
501 - 1000 sqft                  0                    13112                    7594             20707      10055         4398         14453                0         4913                2289        7202            0               0           0             0           42362
1001 - 2000 sqft                 0                  107930                   43555             151484      40078       30392          70470                0       31106               37034       68140             0               0           0             0       290094
2001 - 3000 sqft                 0                    46702                  27046              73747      18269       24190          42459                0       23697               23597       47293             0               0           0             0       163500
3001 - 4000 sqft                 0                    68665                  32835             101500         2600     13996          16596         4820           13938               25024       43782             0               0           0             0       161878
4001 - 5000 sqft         12398                        41738                  11587              65723            0     24565          24565                0       35385               17459       52844             0               0           0             0       143132
5001-10,000 sqft                 0                    77790                  62900             140690            0     33793          33793       17334                     0          65546       82880             0               0           0             0       257363
10-15,000 sqft                   0                    16315                  13519              29835      17596       14427          32022                0       18987               60669       79656             0               0           0             0       141513
TOTAL                    12398                      382483                  199862             594743      90334      148528        238861        22154          128425               231618 382197                  0               0           0         4190       1219990

Summary of
Projected Demand
1-500 sqft                                                                                      85693                                 67923                                                        17669                                    110            7587        178982
501 - 1000 sqft                                                                                134978                               108567                                                         27784                                    164          11445         282938
1001 - 2000 sqft                                                                                80346                                 43859                                                        17159                                    226          13453         155043
2001 - 3000 sqft                                                                                40636                                  8816                                                          9077                                   197          11078             69805
3001 - 4000 sqft                                                                                28445                                  6171                                                          6354                                   138            7755            48863
4001 - 5000 sqft                                                                                21944                                  4761                                                          4902                                   106            5982            37695
5001-10,000 sqft                                                                                60954                                 13224                                                        13616                                    296          16618         104707
10-15,000 sqft                                                                                 121909                                 26448                                                        27232                                    591          33235         209415
TOTAL                            0                          0                          0       574906            0            0     279769                 0                0                 0 123792               0               0 1829             107153        1087449




                                                                                                                                                                                                                                                                       135
  Study of Small Business Workspace Provision in Hackney




                                                        ANALYSIS OF FLOORSPACE SUPPLY, DEMAND AND EXCESS/SHORTFALL, ALL HACKNEY
                      Use
                      B1a                                                                              B1b                                 B1c                                                     B2
                      Offices new   Offices second-hand high Offices older low-cost       Sub Total    Studio/R&D Flexible     Sub Total   Light         Light        Light Industrial Sub Total   General General         Sub      B8
                                    standard                                                                                               Industrial    Industrial   older low-cost               industrial industrial   Total    Warehousing
                                                                                                                                           new           second-                                   new        second-               and Storage
                                                                                                                                                         hand high                                            hand
                                                                                                                                                         standard




                                                                                                                                                                                                                                                  Total


Assumed Demand by
Quality
1-500 sqft                     5%                      80%                     15%              100%         20%        80%        100%            5%           55%             40%       100%          5%         95% 100%              100%
501 - 1000 sqft                5%                      80%                     15%              100%         20%        80%        100%            5%           55%             40%       100%          5%         95% 100%              100%
1001 - 2000 sqft             10%                       80%                     10%              100%         20%        80%        100%          15%            55%             30%       100%        15%          85% 100%              100%
2001 - 3000 sqft             10%                       80%                     10%              100%         20%        80%        100%          15%            55%             30%       100%        15%          85% 100%              100%
3001 - 4000 sqft             20%                       75%                      5%              100%         25%        75%        100%          20%            60%             20%       100%        20%          80% 100%              100%
4001 - 5000 sqft             30%                       70%                      0%              100%         30%        70%        100%          30%            60%             10%       100%        30%          70% 100%              100%
5001-10,000 sqft             30%                       70%                      0%              100%         30%        70%        100%          30%            60%             10%       100%        30%          70% 100%              100%
10-15,000 sqft               40%                       60%                      0%              100%         40%        60%        100%          40%            50%             10%       100%        40%          60% 100%              100%

Projected Demand by
Quality
1-500 sqft                   4285                    68554                  12854              85693      13585       54339        67923           883         9718            7068      17669             6        105       110         7587        178982
501 - 1000 sqft              6749                  107982                   20247             134978      21713       86854      108567          1389        15281           11114       27784             8        155       164       11445         282938
1001 - 2000 sqft             8035                    64277                    8035             80346         8772     35087        43859         2574          9437            5148      17159           34         192       226       13453         155043
2001 - 3000 sqft             4064                    32509                    4064             40636         1763       7053        8816         1362          4992            2723        9077          30         168       197       11078             69805
3001 - 4000 sqft             5689                    21334                    1422             28445         1543       4628        6171         1271          3812            1271        6354          28         110       138         7755            48863
4001 - 5000 sqft             6583                    15360                            0        21944         1428       3332        4761         1471          2941              490       4902          32           75      106         5982            37695
5001-10,000 sqft            18286                    42668                            0        60954         3967       9257       13224         4085          8169            1362      13616           89         207       296       16618         104707
10-15,000 sqft              48764                    73145                            0       121909      10579       15869        26448       10893         13616             2723      27232          237         355       591       33235         209415
TOTAL                     102454                   425831                   46621             574906      63350      216418      279769        23927         67968           31898 123792               462       1367 1829            107153        1087449




                                                                                                                                                                                                                                                      136
  Study of Small Business Workspace Provision in Hackney




                                                          ANALYSIS OF FLOORSPACE SUPPLY, DEMAND AND EXCESS/SHORTFALL, ALL HACKNEY
                    Use
                    B1a                                                                               B1b                                 B1c                                                         B2
                    Offices new       Offices second-hand high Offices older low-cost   Sub Total     Studio/R&D Flexible     Sub Total   Light            Light         Light Industrial Sub Total   General General             Sub         B8
                                      standard                                                                                            Industrial       Industrial    older low-cost               industrial industrial       Total       Warehousing
                                                                                                                                          new              second-                                    new        second-                      and Storage
                                                                                                                                                           hand high                                             hand
                                                                                                                                                           standard




                                                                                                                                                                                                                                                            Total




Excess/Shortfall


1-500 sqft                -4285                       -58324                 -12028         -74637      -11849      -51571       -63420         -883            -9319            -7068     -17270            -6       -105          -110           -3397       -158834
501 - 1000 sqft           -6749                       -94870                 -12652        -114271      -11659      -82455       -94114        -1389          -10368             -8825     -20582            -8       -155          -164         -11445        -240576
1001 - 2000 sqft          -8035                        43653                  35520          71138       31306        -4695       26611        -2574           21669            31886       50981          -34        -192          -226         -13453         135051
2001 - 3000 sqft          -4064                        14193                  22982          33111       16506       17137        33643        -1362           18704            20874       38216          -30        -168          -197         -11078             93695
3001 - 4000 sqft          -5689                        47331                  31413          73055          1057       9367       10425         3549           10126            23753       37428          -28        -110          -138           -7755        113015
4001 - 5000 sqft           5815                        26378                  11587          43780        -1428      21233        19804        -1471           32444            16969       47942          -32          -75         -106           -5982        105437
5001-10,000 sqft        -18286                         35122                  62900          79736        -3967      24536        20569       13249             -8169           64185       69264          -89        -207          -296         -16618         152656
10-15,000 sqft          -48764                        -56830                  13519         -92074          7017      -1442        5575      -10893              5371           57946       52425        -237         -355          -591         -33235             -67902
TOTAL                   -90056                        -43348                 153241          19837       26983      -67891       -40907        -1773           60457           199720 258405             -462       -1367 -1829                 -102964         132542
Floorspace Supply
Area:
Supply Snapshot
1-500 sqft                        0                     7692                      621          8313         1305       2081        3386                0           300                 0        300           0               0           0         3150       15149
501 - 1000 sqft                   0                     9859                    5710         15569          7560       3307       10867                0         3694             1721        5415            0               0           0             0      31851
1001 - 2000 sqft                  0                    81150                  32748         113898       30134       22851        52985                0       23388            27845       51233             0               0           0             0 218116
2001 - 3000 sqft                  0                    35114                  20335          55449       13736       18188        31924                0       17817            17742       35559             0               0           0             0 122932




                                                                                                                                                                                                                                                                137
Study of Small Business Workspace Provision in Hackney



APPENDIX 5

                   ANALYSIS OF FLOORSPACE SUPPLY, DEMAND AND EXCESS/SHORTFALL, ALL HACKNEY SUB AREAS
South Shoreditch              Use
                              B1a                                                     B1b                               B1c                                                      B2
                              Offices       Offices     Offices older       Sub Total Studio/R&D Flexible   Sub Total   Light            Light       Light Industrial Sub Total General        General           Sub          B8 Warehousing
                              new           second-     low-cost                                                        Industrial       Industrial  older low-cost             industrial new industrial        Total        and Storage
                                            hand high                                                                   new              second-hand                                           second-hand
                                            standard                                                                                     high
                                                                                                                                         standard                                                                                                  Total

Estimated Annual Supply
1-500 sqft                              0      8421.6                   0 8421.56        1735.7 2767.73 4503.38                      0             0              0          0             0                 0            0                    0      12925
501 - 1000 sqft                         0       13112        5732.3 18844.8                7061 2068.15 9129.12                      0      2417.9                0 2417.94                0                 0            0                    0      30392
1001 - 2000 sqft                        0     105159          37167 142326               38214 30391.8 68605.39                      0       19800       1060.01 20859.7                   0                 0            0                    0 231791
2001 - 3000 sqft                        0       46702         27046 73747.2              15324      24190 39514.3                    0       23697       18335.4      42032                0                 0            0                    0 155293
3001 - 4000 sqft                        0       59528         32835 92363.2              2600.2 13995.6 16595.74            4819.9          9775.5       5794.81 20390.2                   0                 0            0                    0 129349
4001 - 5000 sqft               6583.5           36094         11587           54264            0 24565.1 24565.1                     0       35385       4730.81 40115.5                   0                 0            0                    0 118945
5001-10,000 sqft                        0       63198         31416 94613.5                    0 14743.1 14743.05           8529.3                 0              0 8529.29                0                 0            0                    0 117886
>10,000 sqft                            0       16315                   0 16315.1              0 14426.5 14426.51                    0             0              0          0             0                 0            0                    0      30742
TOTAL                          6583.5         348529        145783 500895                64935 127148 192082.6               13349           91074         29921 134345                    0                 0            0                    0 827323


Projected Demand by Quality
1-500 sqft                       3472           55552         10416           69440      13087      52348      65435            722            7937          5772     14430                2             40              42              2254 151601
501 - 1000 sqft                  5513           88213         16540 110266               20932      83728     104659           1141          12547           9125     22813                3             56              59              3445 241242
1001 - 2000 sqft                 4921           39364           4921          49206        7919     31676      39595           1671            6129          3343     11143              15              86         101                  2799 102843
2001 - 3000 sqft                 1417           11334           1417          14168        1072      4286        5358           604            2215          1208       4027             14              78              92              1878         25523
3001 - 4000 sqft                 2061            7728            515          10304         974      2922        3897           586            1757            586      2929             13              54              67              1366         18562
4001 - 5000 sqft                 2318            5409                   0      7728         877      2046        2922           659            1318            220      2197             15              35              50              1025         13922
5001-10,000 sqft                 6569           15327                   0     21895        2484      5796        8280          1867            3734            622      6224             43             100         143                  2903         39445
>10,000 sqft                    17516           26275                   0     43791        6624      9936      16560           4979            6224          1245     12447             114             171         285                  5806         78889
TOTAL                           43787         249202          33808 326797               53968 192738         246706         12228           41861         22121      76210             219             620         839                 21475 672027




                                                                                                                                                                                                                                                           138
Study of Small Business Workspace Provision in Hackney




South Shoreditch    Use
                    B1a                                              B1b                               B1c                                                 B2
                    Offices   Offices     Offices older    Sub Total Studio/R&D Flexible   Sub Total   Light         Light       Light Industrial Sub Total General        General        Sub       B8 Warehousing
                    new       second-     low-cost                                                     Industrial    Industrial  older low-cost             industrial new industrial     Total     and Storage
                              hand high                                                                new           second-hand                                           second-hand
                              standard                                                                               high
                                                                                                                     standard                                                                                         Total




Excess/Shortfall



1-500 sqft            -3472      -47130        -10416 -61018           -11351 -49581         -60932           -722        -7937         -5772 -14430                  -2            -40       -42             -2254 -138676
501 - 1000 sqft       -5513      -75100        -10808 -91421           -13871 -81659         -95530          -1141      -10129          -9125 -20395                  -3            -56       -59             -3445 -210850
1001 - 2000 sqft      -4921       65795         32246        93120      30295      -1284      29011          -1671       13671          -2283       9717             -15            -86     -101              -2799 128948
2001 - 3000 sqft      -1417       35368         25629        59580      14253      19904      34157           -604       21482         17127      38005              -14            -78       -92             -1878 129770
3001 - 4000 sqft      -2061       51800         32320        82059        1626     11073      12699           4234         8018          5209     17461              -13            -54       -67             -1366 110787
4001 - 5000 sqft       4265       30684         11587        46536         -877    22519      21643           -659       34067           4511     37919              -15            -35       -50             -1025 105023
5001-10,000 sqft      -6569       47871         31416        72718       -2484      8947        6463          6662        -3734           -622      2306             -43           -100     -143              -2903      78441
>10,000 sqft         -17516       -9959                   0 -27476       -6624      4490       -2134         -4979        -6224         -1245 -12447               -114            -171     -285              -5806     -48148
TOTAL                -37203       99327       111974 174099             10966 -65590         -54624           1121       49214           7800     58135            -219            -620     -839             -21475 155295




                                                                                                                                                                                                                              139
     Study of Small Business Workspace Provision in Hackney




Kingsland Basin/Kingsland Road   Use
                                 B1a                                                           B1b                                       B1c                                                          B2
                                 Offices       Offices     Offices          Sub Total          Studio/R&D Flexible       Sub Total       Light            Light            Light      Sub Total       General General Sub Total B8
                                 new           second-hand older low-                                                                    Industrial       Industrial       Industrial                 industrial industrial     Warehousing
                                               high        cost                                                                          new              second-          older low-                 new        second-        and Storage
                                               standard                                                                                                   hand high        cost                                  hand
                                                                                                                                                          standard                                                                            Total

Estimated Annual Supply
1-500 sqft                                 0         1330               0               1330            0            0               0                0                0           0              0         0        0        0     4189.5             5520
501 - 1000 sqft                            0             0              0                 0       1272.8             0     1272.81                    0                0           0              0         0        0        0           0            1273
1001 - 2000 sqft                           0             0    1842.1             1842.05                0            0               0                0      2327.5                0     2327.5             0        0        0           0            4170
2001 - 3000 sqft                           0             0              0                 0       2944.6             0     2944.62                    0                0           0              0         0        0        0           0            2945
3001 - 4000 sqft                           0             0              0                 0             0            0               0                0                0           0              0         0        0        0           0               0
4001 - 5000 sqft                           0     5644.52                0        5644.52                0            0               0                0                0     15029       15029              0        0        0           0           20674
5001-10,000 sqft                           0             0              0                 0             0 9074.59          9074.59                    0                0     11305       11305              0        0        0           0           20380
>10,000 sqft                               0     14592.8                0       14592.76          17596              0     17595.9                    0                0           0              0         0        0        0           0           32189
TOTAL                                      0     21567.3      1842.1            23409.33          21813 9074.59            30887.9                    0      2327.5          26334       28662              0        0        0     4189.5            87148


Projected Demand by Quality
1-500 sqft                             113           1811         340                   2264          152        609            761               28             313            228         570             1       13       14        505             4114
501 - 1000 sqft                        164           2626         492                   3282          213        853           1066               40             439            319         797             1       19       20        707             5873
1001 - 2000 sqft                       563           4504         563                   5630          365       1462           1827             205              752            410        1367             5       29       34       1213            10070
2001 - 3000 sqft                       521           4170         521                   5213          335       1340           1675             188              689            376        1253             5       26       31       1112             9284
3001 - 4000 sqft                       730           2736         182                   3648          305        914           1218             182              547            182         911             5       18       23        808             6609
4001 - 5000 sqft                       844           1970               0               2815          274        640            914             205              410              68        683             5       12       17        606             5035
5001-10,000 sqft                     2344            5470               0               7815          777       1812           2589             581             1162            194        1936            14       34       48       1718            14106
>10,000 sqft                         6254            9380               0           15634            2071       3107           5178            1549             1936            387        3873            38       57       96       3436            28216
TOTAL                              11534           32668        2099                46300            4493     10737          15229             2979             6248           2164      11391             74     208      282       10105            83307




                                                                                                                                                                                                                                                 140
     Study of Small Business Workspace Provision in Hackney




Kingsland Basin/Kingsland Road   Use
                                 B1a                                                        B1b                                   B1c                                               B2
                                 Offices    Offices     Offices          Sub Total          Studio/R&D Flexible     Sub Total     Light         Light        Light      Sub Total   General General Sub Total B8
                                 new        second-hand older low-                                                                Industrial    Industrial   Industrial             industrial industrial     Warehousing
                                            high        cost                                                                      new           second-      older low-             new        second-        and Storage
                                            standard                                                                                            hand high    cost                              hand
                                                                                                                                                standard                                                                    Total
Excess/Shortfall



1-500 sqft                           -113         -481        -340                   -934         -152       -609          -761           -28         -313       -228        -570         -1     -13      -14       3684             1405
501 - 1000 sqft                      -164        -2626        -492               -3282            1060       -853          207            -40         -439       -319        -797         -1     -19      -20       -707            -4600
1001 - 2000 sqft                     -563        -4504       1279                -3788            -365      -1462        -1827          -205          1576       -410         961         -5     -29      -34      -1213            -5901
2001 - 3000 sqft                     -521        -4170        -521               -5213            2610      -1340         1269          -188          -689       -376       -1253         -5     -26      -31      -1112            -6339
3001 - 4000 sqft                     -730        -2736        -182               -3648            -305       -914        -1218          -182          -547       -182        -911         -5     -18      -23       -808            -6609
4001 - 5000 sqft                     -844         3674               0               2830         -274       -640          -914         -205          -410     14961       14346          -5     -12      -17       -606            15638
5001-10,000 sqft                    -2344        -5470               0           -7815            -777       7262         6486          -581         -1162     11111         9369        -14     -34      -48      -1718             6274
>10,000 sqft                        -6254         5212               0           -1041         15525        -3107       12418         -1549          -1936       -387       -3873        -38     -57      -96      -3436             3972
TOTAL                             -11534       -11101         -257              -22891         17321        -1662       15659         -2979          -3920     24170       17271         -74    -208    -282       -5915             3841




                                                                                                                                                                                                                               141
Study of Small Business Workspace Provision in Hackney




 Dalston                       Use
                               B1a                                                           B1b                                       B1c                                                          B2
                               Offices       Offices     Offices          Sub Total          Studio/R&D Flexible       Sub Total       Light            Light            Light      Sub Total       General General Sub Total B8
                               new           second-hand older low-                                                                    Industrial       Industrial       Industrial                 industrial industrial     Warehousing
                                             high        cost                                                                          new              second-          older low-                 new        second-        and Storage
                                             standard                                                                                                   hand high        cost                                  hand
                                                                                                                                                        standard                                                                            Total

 Estimated Annual Supply
 1-500 sqft                              0         1330               0               1330            0            0               0                0                0           0              0         0        0        0     4189.5             5520
 501 - 1000 sqft                         0             0              0                 0       1272.8             0     1272.81                    0                0           0              0         0        0        0           0            1273
 1001 - 2000 sqft                        0             0    1842.1             1842.05                0            0               0                0      2327.5                0     2327.5             0        0        0           0            4170
 2001 - 3000 sqft                        0             0              0                 0       2944.6             0     2944.62                    0                0           0              0         0        0        0           0            2945
 3001 - 4000 sqft                        0             0              0                 0             0            0               0                0                0           0              0         0        0        0           0               0
 4001 - 5000 sqft                        0     5644.52                0        5644.52                0            0               0                0                0     15029       15029              0        0        0           0           20674
 5001-10,000 sqft                        0             0              0                  0            0 9074.59          9074.59                    0                0     11305       11305              0        0        0           0           20380
 >10,000 sqft                            0     14592.8                0       14592.76          17596              0     17595.9                    0                0           0              0         0        0        0           0           32189
 TOTAL                                   0     21567.3      1842.1            23409.33          21813 9074.59            30887.9                    0      2327.5          26334       28662              0        0        0     4189.5            87148


 Projected Demand by Quality
 1-500 sqft                          113           1807         339                   2258           59        235            294               24             259            188         471             0        7        8        692             3722
 501 - 1000 sqft                     158           2529         474                   3161           82        329            411               33             362            264         659             1       10       11        969             5211
 1001 - 2000 sqft                    542           4336         542                   5420          141        564            704             169              621            339        1130             3       16       19       1661             8933
 2001 - 3000 sqft                    497           3974         497                   4968          129        517            646             155              570            311        1036             3       15       17       1522             8189
 3001 - 4000 sqft                    723           2710         181                   3613          117        352            470             151              452            151         753             3       10       13       1107             5955
 4001 - 5000 sqft                    813           1897               0               2710          106        247            352             169              339              56        565             3        7        9        830             4467
 5001-10,000 sqft                  2303            5374               0               7678          299        699            998             480              960            160        1600             8       19       27       2353            12655
 >10,000 sqft                      6142            9213               0           15355             798       1198           1996            1280             1600            320        3201            21       32       54       4705            25311
 TOTAL                           11291           31840        2032                45163            1732       4139           5870            2462             5164           1789        9414            41     116      157       13839            74444




                                                                                                                                                                                                                                                      142
Study of Small Business Workspace Provision in Hackney




 Dalston             Use
                     B1a                                                     B1b                                   B1c                                               B2
                     Offices    Offices     Offices          Sub Total       Studio/R&D Flexible     Sub Total     Light         Light        Light      Sub Total   General General Sub Total B8
                     new        second-hand older low-                                                             Industrial    Industrial   Industrial             industrial industrial     Warehousing
                                high        cost                                                                   new           second-      older low-             new        second-        and Storage
                                standard                                                                                         hand high    cost                              hand
                                                                                                                                 standard                                                                    Total
 Excess/Shortfall



 1-500 sqft              -113        -1807         168               -1751          -59       -235          -294           -24         -259       -188        -471         0       -7       -8       -692             -3215
 501 - 1000 sqft         -158        -2529         308               -2379          -82       -329          -411           -33         -362       -264        -659         -1     -10      -11       -969             -4429
 1001 - 2000 sqft        -542        -4336        -542               -5420         -141       -564          -704         -169          -621       -339       -1130         -3     -16      -19      -1661             -8933
 2001 - 3000 sqft        -497        -1204        -497               -2197         -129       -517          -646         -155          -570       -311       -1036         -3     -15      -17      -1522             -5418
 3001 - 4000 sqft        -723        -2710        -181               -3613         -117       -352          -470         -151          -452       -151        -753         -3     -10      -13      -1107             -5955
 4001 - 5000 sqft        -813        -1897               0           -2710         -106       -247          -352         -169          -339         -56       -565         -3      -7       -9       -830             -4467
 5001-10,000 sqft       -2303        -5374               0           -7678         -299       -699          -998         -480          -960       -160       -1600         -8     -19      -27      -2353            -12655
 >10,000 sqft           -6142        -9213               0          -15355         -798      -1198        -1996        -1280          -1600       -320       -3201        -21     -32      -54      -4705            -25311
 TOTAL                -11291       -29069         -744              -41103       -1732       -4139        -5870        -2462          -5164      -1789       -9414        -41    -116    -157      -13839            -70384




                                                                                                                                                                                                                        143
Study of Small Business Workspace Provision in Hackney




Hackney Central               Use
                              B1a                                                         B1b                                           B1c                                                                 B2
                              Offices       Offices         Offices older Sub Total       Studio/R&D Flexible         Sub Total         Light             Light         Light            Sub Total          General General Sub Total B8
                              new           second-         low-cost                                                                    Industrial        Industrial    Industrial                          industrial industrial     Warehousing
                                            hand high                                                                                   new               second-hand   older low-                          new        second-        and Storage
                                            standard                                                                                                      high          cost                                           hand
                                                                                                                                                          standard                                                                                  Total

Estimated Annual Supply
1-500 sqft                              0               0        319.2        319.2                0             0                 0                 0           399                 0                399         0        0        0           0             718
501 - 1000 sqft                         0               0              0              0         790     2330.16          3120.18                     0      2495.08 1228.92                          3724         0        0        0           0            6844
1001 - 2000 sqft                        0               0     2650.69       2650.7                 0             0                 0                 0      1610.63 10564.2                  12174.82             0        0        0           0           14826
2001 - 3000 sqft                        0               0              0              0            0             0                 0                 0             0                 0                  0         0        0        0           0               0
3001 - 4000 sqft                        0               0              0              0            0             0                 0                 0             0                 0                  0         0        0        0           0               0
4001 - 5000 sqft                        0               0              0              0            0             0                 0                 0             0                 0                  0         0        0        0           0               0
5001-10,000 sqft                        0               0     23695.3        23695                 0             0                 0                 0             0 10307.5                  10307.5             0        0        0           0           34003
>10,000 sqft                            0               0     13519.5        13519                 0             0                 0                 0      18987.1                  0       18987.08             0        0        0           0           32507
TOTAL                                   0               0     40184.6        40185              790     2330.16          3120.18                     0      23491.8 22100.6                   45592.4             0        0        0           0           88897


Projected Demand by Quality
1-500 sqft                          79           1258               236       1572                53            212               265                18          195           142                    355         0        9        9         467            2669
501 - 1000 sqft                   110            1761               330       2201                74            297               371                25          273           199                    497         1       12       13         653            3736
1001 - 2000 sqft                  377            3019               377       3774               127            509               637            128             469           256                    852         3       18       22       1120             6405
2001 - 3000 sqft                  346            2767               346       3459               117            467               584            117             430           234                    781         3       17       20       1027             5871
3001 - 4000 sqft                  503            1887               126       2516               106            318               425            114             341           114                    568         3       11       14         747            4270
4001 - 5000 sqft                  566            1321                  0      1887                96            223               318            128             256             43                   426         3        8       11         560            3202
5001-10,000 sqft                 1604            3742                  0      5346               271            631               902            362             724           121                   1207         9       21       31       1587             9073
>10,000 sqft                     4277            6415                  0     10692               722        1083             1804                966           1207            241                   2415        24       37       61       3174            18146
TOTAL                            7862          22171              1415       31448              1565        3741             5306              1857            3896           1349                   7102        47     133      180        9334            53371




                                                                                                                                                                                                                                                            144
Study of Small Business Workspace Provision in Hackney




Hackney Central     Use
                    B1a                                               B1b                                     B1c                                                               B2
                    Offices     Offices     Offices older Sub Total   Studio/R&D Flexible      Sub Total      Light              Light         Light         Sub Total          General General Sub Total B8
                    new         second-     low-cost                                                          Industrial         Industrial    Industrial                       industrial industrial     Warehousing
                                hand high                                                                     new                second-hand   older low-                       new        second-        and Storage
                                standard                                                                                         high          cost                                        hand
                                                                                                                                 standard                                                                               Total
Excess/Shortfall



1-500 sqft                -79       -1258            83      -1253           -53        -212           -265                -18          204          -142                  44         0       -9       -9        -467           -1950
501 - 1000 sqft        -110         -1761          -330      -2201          716         2033          2749                 -25        2222           1030                3227         -1     -12      -13        -653            3108
1001 - 2000 sqft       -377         -3019         2273       -1123          -127        -509           -637           -128            1142         10309             11323            -3     -18      -22      -1120             8421
2001 - 3000 sqft       -346         -2767          -346      -3459          -117        -467           -584           -117             -430          -234                -781         -3     -17      -20      -1027            -5871
3001 - 4000 sqft       -503         -1887          -126      -2516          -106        -318           -425           -114             -341          -114                -568         -3     -11      -14        -747           -4270
4001 - 5000 sqft       -566         -1321              0     -1887           -96        -223           -318           -128             -256            -43               -426         -3      -8      -11        -560           -3202
5001-10,000 sqft      -1604         -3742       23695        18349          -271        -631           -902           -362             -724        10187                 9100         -9     -21      -31      -1587            24930
>10,000 sqft          -4277         -6415       13519         2827          -722       -1083         -1804            -966           17780           -241            16572           -24     -37      -61      -3174            14360
TOTAL                 -7862       -22171        38769         8736          -775       -1411         -2186          -1857            19596         20751             38490           -47    -133     -180      -9334            35526




                                                                                                                                                                                                                                145
Study of Small Business Workspace Provision in Hackney




 Hackney Wick                  Use
                               B1a                                                         B1b                                          B1c                                                                    B2
                               Offices       Offices         Offices older Sub Total       Studio/R&D Flexible         Sub Total        Light            Light            Light             Sub Total          General General Sub Total B8
                               new           second-         low-cost                                                                   Industrial       Industrial       Industrial                           industrial industrial     Warehousing
                                             hand high                                                                                  new              second-          older low-                           new        second-        and Storage
                                             standard                                                                                                    hand high        cost                                            hand
                                                                                                                                                         standard                                                                                      Total

 Estimated Annual Supply
 1-500 sqft                              0               0              0              0            0             0                0                 0                0                0                   0         0        0        0           0                0
 501 - 1000 sqft                         0               0              0              0         931              0          931                     0                0                0                   0         0        0        0           0              931
 1001 - 2000 sqft                        0               0              0              0            0             0                0                 0                0     1979.04              1979.04             0        0        0           0             1979
 2001 - 3000 sqft                        0               0              0              0            0             0                0                 0                0     3738.63              3738.63             0        0        0           0             3739
 3001 - 4000 sqft                        0               0              0              0            0             0                0                 0     4162.9                      0           4162.9            0        0        0           0             4163
 4001 - 5000 sqft                        0               0              0              0            0             0                0                 0                0     6153.91              6153.91             0        0        0           0             6154
 5001-10,000 sqft                        0               0              0              0            0             0                0                 0                0     55238.9             55238.89             0        0        0           0            55239
 >10,000 sqft                            0               0              0              0            0             0                0                 0                0     42335.2             42335.23             0        0        0           0            42335
 TOTAL                                   0               0              0              0         931              0          931                     0     4162.9            109446             113608.6             0        0        0           0           114540


 Projected Demand by Quality
 1-500 sqft                          98          1567                294        1958               -2             -7               -9            19             204               148                    370         1       13       14        964              3297
 501 - 1000 sqft                    137          2193                411        2742               -2            -10          -12                26             285               207                    518         1       18       19       1349              4616
 1001 - 2000 sqft                   470          3760                470        4700               -4            -17          -21              133              489               267                    889         5       28       33       2313              7914
 2001 - 3000 sqft                   431          3446                431        4308               -4            -16          -20              122              448               244                    815         5       26       31       2121              7254
 3001 - 4000 sqft                   627          2350                157        3133               -4            -11          -14              118              355               118                    592         4       18       22       1542              5276
 4001 - 5000 sqft                   705          1645                   0       2350               -3             -7          -11              133              267                    44                444         5       12       17       1157              3957
 5001-10,000 sqft                 1997           4661                   0       6658               -9            -21          -30              378              755               126                   1259        14       33       47       3277             11211
 >10,000 sqft                     5326           7990                   0     13316               -24            -36          -60            1007             1259                252                   2518        38       57       94       6555             22422
 TOTAL                            9791          27611              1762       39164               -52        -125           -177             1936             4062               1407                   7405        73     205      278       19278             65948




                                                                                                                                                                                                                                                                  146
Study of Small Business Workspace Provision in Hackney




 Hackney Wick        Use
                     B1a                                               B1b                                         B1c                                                         B2
                     Offices     Offices     Offices older Sub Total   Studio/R&D Flexible         Sub Total       Light         Light        Light         Sub Total          General General Sub Total B8
                     new         second-     low-cost                                                              Industrial    Industrial   Industrial                       industrial industrial     Warehousing
                                 hand high                                                                         new           second-      older low-                       new        second-        and Storage
                                 standard                                                                                        hand high    cost                                        hand
                                                                                                                                 standard                                                                              Total
 Excess/Shortfall



 1-500 sqft                -98      -1567           -294       -1958            2              7               9           -19         -204          -148               -370         -1     -13      -14       -964            -3297
 501 - 1000 sqft         -137       -2193           -411       -2742         933              10         943               -26         -285          -207               -518         -1     -18      -19      -1349            -3685
 1001 - 2000 sqft        -470       -3760           -470       -4700            4             17           21            -133          -489          1712               1090         -5     -28      -33      -2313            -5935
 2001 - 3000 sqft        -431       -3446           -431       -4308            4             16           20            -122          -448          3494               2924         -5     -26      -31      -2121            -3516
 3001 - 4000 sqft        -627       -2350           -157       -3133            4             11           14            -118         3807           -118               3570         -4     -18      -22      -1542            -1113
 4001 - 5000 sqft        -705       -1645               0      -2350            3              7           11            -133          -267          6109               5710         -5     -12      -17      -1157             2197
 5001-10,000 sqft      -1997        -4661               0      -6658            9             21           30            -378          -755        55113            53980           -14     -33      -47      -3277            44028
 >10,000 sqft          -5326        -7990               0    -13316            24             36           60          -1007         -1259         42083            39817           -38     -57      -94      -6555            19913
 TOTAL                 -9791       -27611         -1762      -39164          983             125        1108           -1936            101      108039           106203            -73    -205    -278      -19278            48591




                                                                                                                                                                                                                                 147
             Study of Small Business Workspace Provision in Hackney




Rest of Hackney           Use
                          B1a                                                                 B1b                             B1c                                                                           B2
                          Offices new Offices second-       Offices older low-cost Sub Total Studio/R&D Flexible Sub Total Light Industrial        Light Industrial       Light Industrial older Sub Total General              General            Sub Total B8 Warehousing and
                                      hand high                                                                            new                     second-hand high       low-cost                         industrial new       industrial                   Storage
                                      standard                                                                                                     standard                                                                     second-hand                                           Total

Estimated Annual Supply
1-500 sqft                         0            478.8                          0    478.8             0        0          0                   0                       0                      0          0                   0                 0           0                       0           479
501 - 1000 sqft                    0                    0             1079.96        1080             0        0          0                   0                       0                      0          0                   0                 0           0                       0       1080
1001 - 2000 sqft                   0                    0             1895.25 1895.3 1864.66                   0 1864.7                       0               7368.2                6155.24 13523                           0                 0           0                       0     17283
2001 - 3000 sqft                   0                    0                      0          0           0        0          0                   0                       0             14063.4 14063                           0                 0           0                       0     14063
3001 - 4000 sqft                   0          9137.1                           0 9137.1               0        0          0                   0                       0             5264.14 5264.1                          0                 0           0                       0     14401
4001 - 5000 sqft                5815                    0                      0 5814.8               0        0          0                   0                       0                      0          0                   0                 0           0                       0       5815
5001-10,000 sqft                   0                    0             7788.48 7788.5                  0        0          0           8804.6                          0                      0 8804.6                       0                 0           0                       0     16593
>10,000 sqft                       0                    0                      0          0           0        0          0                   0                       0                      0          0                   0                 0           0                       0            0
TOTAL                           5815          9615.9                  10763.7 26194 1864.66                    0 1864.7               8804.6                  7368.2                25482.8 41656                           0                 0           0                       0     69715


Projected Demand by
Quality
1-500 sqft                       163             2608                       489      3260            44     177        221                    21                 235                      171        427                    0                  1          1               1143            5051
501 - 1000 sqft                  228             3651                       685      4564            62     247        309                    30                 329                      239        598                    0                  1          1               1600            7072
1001 - 2000 sqft                 782             6259                       782      7823           106     424        530                154                    564                      308      1025                     0                  2          2               2743          12123
2001 - 3000 sqft                 717             5737                       717      7171            97     388        485                141                    517                      282        940                    0                  2          2               2514          11113
3001 - 4000 sqft                1043             3912                       261      5216            88     265        353                137                    410                      137        683                    0                  1          1               1829            8082
4001 - 5000 sqft                1174             2738                          0     3912            79     185        265                154                    308                        51       513                    0                  1          1               1371            6061
5001-10,000 sqft                3325             7758                          0 11083              225     525        750                436                    871                      145      1452                     1                  2          3               3886          17174
>10,000 sqft                    8867           13300                           0 22166              600     900      1500               1162                    1452                      290      2905                     2                  3          6               7771          34348
TOTAL                        16299             45963                      2934 65195                1302 3111        4413               2234                    4686                    1623       8543                     4                 12        17               22857 101024




                                                                                                                                                                                                                                                                      148
             Study of Small Business Workspace Provision in Hackney




Rest of Hackney         Use
                        B1a                                                           B1b                              B1c                                                                      B2
                        Offices new Offices second-   Offices older low-cost Sub Total Studio/R&D Flexible Sub Total Light Industrial     Light Industrial     Light Industrial older Sub Total General              General            Sub Total B8 Warehousing and
                                    hand high                                                                        new                  second-hand high     low-cost                         industrial new       industrial                   Storage
                                    standard                                                                                              standard                                                                   second-hand                                       Total
Excess/Shortfall



1-500 sqft                    -163            -2129                  -489     -2781           -44    -177       -221                -21                 -235                  -171       -427                    0                 -1         -1              -1143       -4572
501 - 1000 sqft               -228            -3651                   395     -3484           -62    -247       -309                -30                 -329                  -239       -598                    0                 -1         -1              -1600       -5992
1001 - 2000 sqft              -782            -6259                 1113      -5928         1759     -424      1335                -154                6804                  5848 12498                          0                 -2         -2              -2743        5160
2001 - 3000 sqft              -717            -5737                  -717     -7171           -97    -388       -485               -141                 -517                13782 13124                          0                 -2         -2              -2514        2951
3001 - 4000 sqft            -1043              5225                  -261      3921           -88    -265       -353               -137                 -410                 5127       4581                     0                 -1         -1              -1829        6319
4001 - 5000 sqft              4641            -2738                      0     1903           -79    -185       -265               -154                 -308                    -51      -513                    0                 -1         -1              -1371        -247
5001-10,000 sqft            -3325             -7758                 7788      -3295         -225     -525       -750              8369                  -871                  -145      7352                 -1                    -2         -3              -3886        -581
>10,000 sqft                -8867           -13300                       0 -22166           -600     -900     -1500              -1162                -1452                   -290     -2905                 -2                    -3         -6              -7771 -34348
TOTAL                     -10484            -36347                  7830 -39001              563 -3111        -2548               6571                 2682                 23860 33113                      -4                -12           -17             -22857 -31309




                                                                                                                                                                                                                                                           149
             Study of Small Business Workspace Provision in Hackney




Other Main Employment
Areas                     Use
                          B1a                                                             B1b                             B1c                                                                             B2
                          Offices new Offices second-       Offices older low- Sub Total Studio/R&D Flexible Sub Total Light Industrial new Light Industrial Light Industrial older       Sub Total       General              General            Sub Total B8 Warehousing and
                                      hand high             cost                                                                            second-hand high low-cost                                     industrial new       industrial                   Storage
                                      standard                                                                                              standard                                                                           second-hand                                           Total

Estimated Annual Supply
1-500 sqft                         0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
501 - 1000 sqft                    0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
1001 - 2000 sqft                   0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
2001 - 3000 sqft                   0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
3001 - 4000 sqft                   0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
4001 - 5000 sqft                   0                    0                   0         0            0        0         0                   0                  0                        0               0                    0                 0           0                       0           0
5001-10,000 sqft                   0                    0                   0         0            0 9975        9975                     0                  0                        0               0                    0                 0           0                       0     9975
>10,000 sqft                       0                    0                   0         0            0        0         0                   0                  0             18334.1 18334.1                                 0                 0           0                       0 18334
TOTAL                              0                    0                   0         0            0 9975        9975                     0                  0             18334.1 18334.1                                 0                 0           0                       0 28309


Projected Demand by
Quality
1-500 sqft                        53               842                   158      1052           24       97       122                  10               105                      76            191                        0                  5          6                  514        1884
501 - 1000 sqft                   74             1178                    221      1473           34     136        170                  13               147                    107             267                        0                  7          8                  719        2637
1001 - 2000 sqft                 252             2020                    252      2525           58     234        292                  69               251                    137             457                        2                 11        13                  1233        4521
2001 - 3000 sqft                 231             1852                    231      2314           54     214        268                  63               231                    126             419                        2                 11        12                  1131        4144
3001 - 4000 sqft                 337             1262                     84      1683           49     146        195                  61               183                      61            305                        2                  7          9                  822        3014
4001 - 5000 sqft                 379               884                      0     1262           44     102        146                  69               137                      23            229                        2                  5          7                  617        2261
5001-10,000 sqft                1073             2504                       0     3577          124     290        414                 194               389                      65            648                        6                 13        19                  1747        6405
>10,000 sqft                    2861             4292                       0     7154          331     497        828                 518               648                    130           1295                     15                    23        38                  3495 12810
TOTAL                           5260            14833                    947 21040              718 1716         2434                  996              2090                    724           3810                     29                    83       112                10278 37675




                                                                                                                                                                                                                                                                     150
             Study of Small Business Workspace Provision in Hackney



Other Main Employment
Areas                   Use
                        B1a                                                         B1b                             B1c                                                                       B2
                        Offices new Offices second-    Offices older low- Sub Total Studio/R&D Flexible Sub Total Light Industrial new Light Industrial Light Industrial older    Sub Total   General               General            Sub Total B8 Warehousing and
                                    hand high          cost                                                                            second-hand high low-cost                              industrial new        industrial                   Storage
                                    standard                                                                                           standard                                                                     second-hand                                        Total
Excess/Shortfall



1-500 sqft                     -53              -842               -158     -1052          -24      -97      -122                 -10               -105                    -76        -191                    0                  -5         -6                  -514 -1884
501 - 1000 sqft                -74            -1178                -221     -1473          -34     -136      -170                 -13               -147                  -107         -267                    0                  -7         -8                  -719 -2637
1001 - 2000 sqft              -252            -2020                -252     -2525          -58     -234      -292                 -69               -251                  -137         -457                    -2             -11           -13                -1233 -4521
2001 - 3000 sqft              -231            -1852                -231     -2314          -54     -214      -268                 -63               -231                  -126         -419                    -2             -11           -12                -1131 -4144
3001 - 4000 sqft              -337            -1262                 -84     -1683          -49     -146      -195                 -61               -183                    -61        -305                    -2                 -7         -9                  -822 -3014
4001 - 5000 sqft              -379              -884                   0    -1262          -44     -102      -146                 -69               -137                    -23        -229                    -2                 -5         -7                  -617 -2261
5001-10,000 sqft            -1073             -2504                    0    -3577         -124 9685         9561                 -194               -389                    -65        -648                    -6             -13           -19                -1747     3570
>10,000 sqft                -2861             -4292                    0    -7154         -331     -497      -828                -518               -648                18205        17039                -15                 -23           -38                -3495     5524
TOTAL                       -5260            -14833                -947 -21040            -718 8259         7541                 -996             -2090                 17610        14524                -29                 -83         -112                -10278 -9366




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