The City of London Corporation has challenged the amount of office space being planned for the Square Mile under the Mayor of London’s new London Plan, arguing that its evidence could substantially underestimate future demand.
The Corporation’s Planning and Transportation Committee approved its response to the Draft London Plan on 30 September. Its own provisional calculations suggest the City could require between 2.2m and 3.0m square metres of additional office floorspace, measured as gross internal area (GIA), between 2024 and 2050.
That compares with about 1.39m sq m GIA in the Greater London Authority’s Economic and Infrastructure Uses Supply and Demand Study.
The disagreement is largely about how projected employment is converted into the physical space businesses will require.
GLA Economics expects the City of London to add about 192,000 jobs between 2024 and 2050, an increase of 27.4 per cent. That is the largest absolute increase projected for any London borough.
A separate GLA supply and demand study estimates that 160,800 of the additional jobs will be office-based and translates this into demand for 1.393m sq m of additional office floorspace.
The City Corporation argues that the method used to calculate the amount of space needed for those workers applies office utilisation rates incorrectly.
Its response focuses on assumptions about both employment density, the amount of space allocated to each worker, and utilisation, the proportion of desks actually occupied at a given time.
Under one GLA scenario, a baseline density of 10 sq m per worker and a 66 per cent utilisation rate produces what the City says amounts to an implied density of 6.7 sq m per full-time worker.
The Corporation argues the utilisation adjustment should work in the opposite direction. If only 66 per cent of desks are occupied at a given time, planning for 10 sq m per worker would imply an effective requirement of about 15 sq m rather than reducing the space allocated to each worker.
It says the GLA approach therefore produces employment densities that are too high and floorspace requirements that are too low.
For its own calculation, the City used a lower trend-based estimate of 130,500 additional jobs because it also questions how employment capacity has been incorporated into the GLA’s borough projections.
It estimated that about 83.7 per cent would be office-based, giving around 109,200 additional office jobs.
Applying alternative density and utilisation assumptions produces a requirement of about 2.21m to 2.96m sq m GIA, rounded by the Corporation to between 2.2m and 3.0m sq m.
The City stresses that these are provisional figures. Its supporting analysis says they were produced for the London Plan consultation, are based on a series of assumptions and should not be used to determine planning applications.
The committee report describes the range as a “rudimentary estimate” and says the Corporation will need its own evidence to establish the precise requirement.
The dispute matters because the London Plan will set the capital’s strategic planning framework to 2050. The Corporation argues that underestimating office demand could eventually restrict investment and development in the Square Mile.
It is also questioning whether enough physical capacity has been identified to accommodate that growth.
The City supports the recognition of the existing City Cluster as a location for metropolitan-scale tall buildings, but argues that the GLA has underestimated the potential around Broadgate and failed to assess Fleet Valley properly.
Its initial modelling suggests changes around Fleet Valley could add about 401,000 sq m of net internal area, equivalent to about 535,000 sq m GIA, to the Square Mile’s development capacity.
It wants the London Plan to allow local plans greater scope to refine the boundaries and capacity of tall-building areas.
The disagreement comes as the City pursues its own substantial expansion of office space.
City Plan 2040 provides for a minimum 1.2m sq m net increase in office floorspace between 2021 and 2040.
That figure is measured differently and covers a shorter period than the new estimates, so the two are not directly comparable.
The Corporation said in June that around half of its City Plan target was already under construction, including schemes at 1 Undershaft, 60 Gracechurch Street and 85 Gracechurch Street.
City Plan 2040 itself moved closer to adoption in September after Housing Minister Matthew Pennycook withdrew a direction requiring further examination of its approach to tall buildings around the Tower of London.
The Corporation says it remains on course to adopt the plan by the end of 2026.
City Hall is also planning for substantial commercial growth.
Its employment projections show London adding about 869,000 jobs by 2050, with professional, scientific, technical and real-estate activities expected to account for 373,000 additional jobs.
The Draft London Plan says the capital will “continue to need prime office space that meets occupier demands in highly accessible locations”.
Its proposed employment policy requires boroughs to provide enough business space, informed by both London-wide and local assessments of supply and demand.
The City Corporation’s objection is that the London-wide evidence underpinning that process starts from too low a figure for the Square Mile.
Consultation on the Draft London Plan closes at 5pm on 15 October. Examination is expected in 2027, with adoption anticipated in 2028.