Combining Infrastructure and Commercial Development

Guy Solway
Developing commercial and residential space around transport infrastructure hubs makes sense, both for developers and transport operators.

As city centre space becomes more constrained, infrastructure-led developments have become important conduits for sustainable urban and mobility planning. In London, most new large mixed-use schemes are part of existing or new transport hubs, and cities globally are doing the same.

Rail operators are among the largest landowners in many cities, and most are now addressing the considerable unrealised potential in the form of their land and building assets. Historically, operators were reluctant to develop, often preferring to protect their asset portfolio, but, today, many are exploring more ambitious and creative ways to make the most of their commercial estate.

The benefits of collaborating with development partners are well recognised. Rail companies can increase the level of income they receive from their assets, developing a revenue stream that complements their reliance on fare-payers and taxpayers.

Rail companies can increase the level of income they receive from their assets, developing a revenue stream that complements their reliance on fare-payers and taxpayers.

A well-connected and fully integrated station can lead to increased economic activity and encourages regeneration of the periphery. The space hopefully becomes a prime urban location, attracting new development, occupiers, business and employment initiatives.

For developers, these sites offer urban land that just isn’t available elsewhere, and the transport hub supports new development, potentially transforming the commercial and residential property market over time. Buyers and tenants want to be near the hub, so footfall and demand are increased.

However, the complexity of infrastructure-led developments must be emphasised. There are significant engineering, programming and structural constraints with most of these sites, together with contaminated land potential. Layouts are hugely complicated by the surrounding infrastructure. Typically, buildings have to be bigger and taller, in order to viably fund complicated construction, therefore more costly overall, and standard cost indices rarely apply.

Although inward investors are keen to develop UK urban sites, most lack the necessary expertise in this very specialised work.

Although inward investors are keen to develop UK urban sites, most lack the necessary expertise in this very specialised work. This points to greater opportunity for the major British firms, who do have the specific experience, but they need to be certain that the opportunities are soundly explored and are commercially viable.

Bringing together the aims and interests of the rail operator and the commercial developer is vital to success. Developers are looking for the best return, rail operators are trying to efficiently operate a railway – two very different business and construction cultures. Aligning the aims and commercial aspirations while enhancing the transport network is challenging, and relationships often break down over the lifetime of the project.

Early involvement of the developer is very helpful, as they can then work with the infrastructure team to develop the most suitable structure, having fully explored the site and assessed its potential. Accurate planning and information around scheduling constraints are critical, as costs are driven up when the daily construction hours are short.

Safety plays a big part, as does continuity of rail service, highlighting the need for good relationships and communication between operator and developer.

Rail is a very public arena, and associated developments and construction are visible and newsworthy. Safety plays a big part, as does continuity of rail service, highlighting the need for good relationships and communication between operator and developer.

It's vital that both parties get the best cost and constructability advice. Faithful+Gould works with large commercial developers and rail operators, achieving efficiency and best value on multi-stakeholder projects at complex sites.

Our experience of infrastructure, with the support of our parent company Atkins, enables us to provide robust cost information to developers to support their business case. We can act for either party or both, and our portfolio includes high-profile developments, such as Crossrail, Southwark Tube, London Bridge station redevelopment, Hammersmith Grove, Solum Regeneration and the Printworks mixed-use development, SE17.

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