Press Cuttings Transcripts
Why in the world hasn’t London built its own?
Estates Gazette,
4th December 2004
The search is on London ’s lack of an international convention centre could be costing it hundreds of millions. But building an ICC in the capital depends on picking a site and deciding the scale of the project. By Darren Lazarus.
Members of the London delegation to the curiously named International Congress and Convention Association convention in Cape Town last month were looking around with envious eyes.
Before its grand opening in July 2003, Cape Town did not have an international convention centre. Just 18 months later, the Cape Town ICC is on target to put ZAR2.5bn (£275m) into the South African economy each year, and delegates from all over the world were being invited to learn from its success.
Almost every major city in the world has an international convention centre. Visitor spend from the centre in Sydney is estimated at A$430m (£178m) each year, and it is estimated that around C$250m (£112m) is generated by the centre in Vancouver.
The UK has a number of ICCs, including those in Birmingham , Edinburgh and Glasgow . But so far London – capital of the fourth largest economy in the world and the largest European city, with a population of 7.3m – has been missing out. And the London Development Agency is gnashing its teeth over the issue.
London ’s largest purpose-built convention venues are the Queen Elizabeth II Conference Centre in Westminster , SW1, and ExCel in the Royal Docks, each of which can hold around 1,000 people. According to research carried out by the London ICC Mayoral Commission, set up last December, the paucity of conference facilities in the capital is pushing away £27m a year.
To fill the gap, and to compete with other European cities, the mayoral commission is assessing the need for a new purpose-built convention centre. If built on the standard model, such a development would need a 12-acre central London site for a 5,000-seat plenary hall, seminar rooms, catering facilities and nearby and nearby hotel accommodation.
Need for London ICC challenged
The need for a new venue is rejected by some in the market, especially those who stand to lose out, such as ExCel. The exhibition centre has recently carried out a £3m upgrade of its Platinum Suite, its purpose-built conference centre, which can hold 1,100 seats and has 50 break-out areas. And it has also created a conference and events division, headed by Vanessa Cotton.
“There are no other big venues in London that can hold a large number of people,” she says, but she shrugs off suggestions by the mayoral commission that there is a need for a single purpose-built convention centre. She says ExCel’s strength lies in its flexibility.
“If you will want a conference above 1,000 people, you will struggle to find anywhere,” she notes. “But we are a blank canvas. We are not prescriptive. If you want 5,000 in a room, we can do it. At the [ Edinburgh ] EICC in Scotland , there is little room for exhibition space next to the convention centre. The division between convention centres and exhibition centres is blurring.”
But Gerry Archer, chair of the commission, say s a visit to Cape Town helped convince him of the need for a new convention centre. “Almost all of the key worldwide players in the convention centre market want London to have better facilities,” he says. “Our conclusion was that London as a market would gradually decline if such a centre was not built.” The commission is now sounding out the views of the real estate industry before publishing its final report in March 2005.
Having decided on the need, the commission is faced with a trickier question:> where do you put it?
To some, this seems as a no-brainer. Many developers would jump at the chance of a 12-acre requirement and a development opportunity. For example, the Royal Business Park has been lying dormant for years. The scheme, next to ExCel, has been planning consent for 1.61m sq ft of office space, so you would expect development partner Development Securities to be keen on the prospect.
However, according to executive director Paul Willis, it is not that straightforward.
“At the end of the day, it all depends on money,” he says. “We have a number of sites in our portfolio which could host a requirement of that size. But it boils down to a question of value. Generally, convention centres don’t make much money. So there needs to be a benefit for developers.
“There should be a subsidy equal to that for the best alternative use, or the local authority should give something back in planning terms. After all, we’re not running a charity.”
Despite his company’s development at King’s Cross being singled out as a location for a convention centre in an early draft of the London Plan, Argent chief executive Roger Madelin is also appalled by the prospect of a behemoth on his site. “I don’t think that a huge thing is in the best interests of King’s Cross,” he says. “It’s a big box. It’s not a great thing to have in a vibrant part of London .”
But Madelin accepts that there is a need for the project – and he has a novel suggestion for where it should go. “The London Convention Centre will go to the north end of Hyde Park , in Marble Arch, most of it underground,” he says. “That is the only place for it, and I’m not just saying that because I don’t want it to come to King’s Cross.”
Glimmer of hope
Bu there is a glimmer of hope for the LDA: it could decide that a convention centre is a top-priority legacy use for part of the planned Olympic site in the Lower Lea Valley . However, that would delay work on the scheme until after the prospective Games in 2012. And if London does not get those Games, the cost of a convention centre on the site would be prohibitive.
Also, as Ken Cohen, a partner at London specialist DE & J Levy, says: “Although convention centres have their advantages when they complement the rest of the site, developers might be concerned about them as they are a hands-on business.”
Willis adds: “They are a bit like art galleries – everyone wants to build one, but generally they don’t make much money, so who is prepared to pay for them?”
The best solution may be a proposal being floated by Anthony Lyons, managing director of St James Capital, which bought Earls Court & Olympia Group for £245m in May. If a deal for a £150m MGM Mirage casino at Olympia falls through, some of the space could be converted. Lyons also says that he is “seriously entertaining” the possibility of a permanent convention centre as an addition to the west London site, even if it is chosen for one of the eight proposed mega-casinos.
In fact, Lyons is in advanced negotiations with that owner of a nearby building, which he believes could be converted into a convention centre. The deal, if it goes through, could provide the LDA and the commission with exactly the solution they need.
London ’s convention centre: the candidates
FAVORITE Earls Court & Olympia, West London
Earls Court & Olympia , which was bought by St James Capital for £245m in May, has been cited as one potential option as it has decent transport links and is not too far away from the perks of central London .
St James managing director Anthony Lyons is in talks with a neighbouring landlord to buy a building for a permanent convention centre, which will tie into the Earls Court offer.
The 36-acre site already has an established brand name for holding large exhibitions, while the Olympia 2 building, which is the site of a proposed 250,000 sq ft MGM Mirage casino, currently houses a 450-seat conference centre.
MAYBE Stratford City and Olympic site, Lower Lea Valley
According to one local Docklands agent, Chelsfield’s, Standhope’s and LCR’s £3.5bn Stratford City is better suited for a new purpose-built convention centre that the ExCel and Development Securities’ Royals Business Park . He says: “If a convention centre is going to come to ease London , then it has good transport already. ExCel has just got road and the DLR [Docklands Light Railway].”
However, while a convention centre might be ideal for regeneration, building in the Lower Lea Valley is affected by London ’s 2012 Olympic bid. The LDA is proposing an Olympic Village for a 585-acre site that crosses into Stratford City , so a convention centre may have to wait.
PERHAPS ExCel and Royals Business Park , Royal Docks, E16
Like Earls Court , ExCel has the benefit of being a recognised brand name. ExCel opened on a 110-acre site in 2000 mainly as an exhibition centre and has successfully poached some of Earls Court ’s key events, such as The Boat Show. And ExCel could build a new purpose-built convention centre. It has a 25-acre plot of land at the east end of the site, which will form the second phase of development.
Chief executive Jamie Buchan says: “We have a study under way which is evaluating the options for the development of phase 2, and we expect that this study will be complete in early summer 2005. Clearly, the building of a convention facility is a constituent part of that study,”
LONGSHOTS King’s Cross Central and Marble Arch, central London
Argent St George’s scheme, King’s Cross Central, on a 67-acre site in and around the King’s Cross and St Pancras stations, is the best-connected site for a central London convention centre, says the ICC commission.
But the joint venture between Hermes-owned Argent and its residential partner, St George, has no intention of putting a convention centre into the proposed 8m sq ft scheme, which already includes 5.25m sq ft of offices and 508,000 sq ft of hotels.
Argent’s chief executive Roger Madeline argues that the best site would be beneath Hyde Park at Marble Arch. However, plans for the area (pictured) are still only conceptual, and have little backing.