04Learning from King’s Cross Regeneration

The Government has held up the King’s Cross regeneration scheme on the periphery of central London as an example of what it wants to do in its 20 designated areas. This section looks at what learnings the King’s Cross scheme has for regeneration schemes elsewhere.

The King’s Cross scheme has been a success on several metrics

After a few false starts through the 1980s and 1990s, the on-going redevelopment of the 67 acres at King’s Cross, which began in the mid-2000s, has been a success. Before the intervention, King’s Cross was an island of low demand for space, with several market and policy failures stopping its redevelopment, within an otherwise increasingly high demand London.

The outcome to date is that many new businesses have moved into the area – the number of firms roughly doubled to 800 between 2010 and 2021. The most notable amongst them have been Facebook, Universal Music, Havas, AutoTrader and Google. In addition, the number of jobs increased from 8,000 to 27,000 between 2011 and 2019 (noting that some of these jobs moved from elsewhere in London). As a measure of growing demand, estimated office rents in King’s Cross more than doubled in value, going from 48 per cent below the London city centre average in 2010, to 19 per cent above in 2022.

The make-up of jobs looks somewhat different to wider central London too. Figure 2 shows that in 2019, the wider King’s Cross area had a higher share of jobs in the arts, public administration, education, and information and communications (despite Google’s large UK HQ not due for completion until 2024), a lower share of jobs in finance and professional legal services, and – reflecting its role as a place of leisure – a higher share in restaurants and retail too. This suggests the site has offered something slightly different to the central London average.

Figure 2: The make-up of jobs in King’s Cross looks different to wider central London

Figure 3 - The make-up of jobs in Kings Cross looks different to wider central London

Source: ONS, Business Register of Employment Survey

Note: King’s Cross is defined as MSOA Camden 022. Central London is defined as a circle with a radius of 2 miles from Holborn station.

The success of King’s Cross has also gone beyond economic measures, as many thousands of residents have moved in. In 2020 there were 12,200 residents that lived in and around the site – up from 7,900 a decade earlier. It has also been a success from a design and public realm perspective, with numerous buildings and public spaces on site being nominated for or winning design and architecture awards.

As of November 2017, development costs (mostly from construction) reached £3 billion, and the 900 homes and roughly 279,000 m2 of commercial space had been provided.9

Arguably though, King’s Cross’ economic regeneration could have been even more successful. More office space could have been provided to allow more productive firms and jobs to locate there. King’s Cross only provides 3.1 m2 of floorspace for every square metre of ground, less than Broadgate (4.2 m2), Canary Wharf (4.7 m2), or Paddington (3.7 m2). 10

What happened at King’s Cross

Regeneration in King’s Cross has a long history. Various attempts to regenerate the 67-hectare site during the 1980s and 1990s had failed before redevelopment finally began in the 2000s.

Key milestones:

  • The trigger for the site’s redevelopment was bringing the Channel Tunnel Rail Link (HS1) to King’s Cross during a time of high and growing demand for space in London. London and Continental Railways (LCR) was formed in the 1990s to construct the railway and, as a result, had received ownership of land at King’s Cross and St Pancras stations in 1996. Argent was later brought on board to lead development of the regeneration on the King’s Cross site.
  • King’s Cross was designated an ‘opportunity area’ in the 2000 Camden Council Unitary Development Plan, and again in the 2004 London Plan to provide substantial new office space to meet growing demand in the Capital.
  • Following years of consultations and strategic planning, planning permission was granted by Camden council for most of the site in 2006.
  • Following the completion of HS1 in late 2007, Argent and LCR came together with Exel (now DHL, another landowner on the site at this time) and formed the King’s Cross Central Limited Partnership (KCCLP). Redevelopment of the site began in 2008.
  • Through public financing, the Northern Ticket Hall in the station reached completion in 2009, the station’s distinctive departure concourse opened in March 2012, and the King’s Cross square in front of the station opened in 2013.
  • The distinctive Granary building opened in 2011, with UAL’s Central Saint Martins’ campus locating there. Pancras square, located between the two stations, and the home of several high-profile firms, opened to the public in 2015. The Coal Drops Yard shopping complex opened in 2018, and Google’s distinctive “Groundscraper” HQ is due for completion in 2024.

Figure 3: Timeline of the King’s Cross Regeneration

King's Cross regeneration timeline

The King’s Cross site suffered from a number of market and policy failures

To get to where it is today, the King’s Cross site had to overcome a few market and policy failures.

Using the framework set out in the last section, Table 2 sets out what these failures were, which are then discussed in more detail below. While they are placed into simplified categories for presentation purposes, some failures will span different categories.

Table 2: Market and policy failures in King's Cross

Market and policy failures Issues addressed in King’s Cross
Coordination failures
  • Fragmented land ownership
  • Preference for short-term returns
  • Sub-optimal use of space
  • Urban blight
Planning and policy uncertainty
  • Planning system uncertainty
  • Protected views and height restrictions
  • Policy churn and conflicts of public bodies
Under provision of public goods
  • Quality of build and public realm
  • Public transport access
Demand uncertainty
  • First mover problems – who invests first?
  • Who will occupy the space and at what price?

Source: Adapted from Swinney P and Wilcox Z (2013): Developing interest: The future of Urban Development Funds in the UK, London: Centre for Cities

Coordination failures

There are several coordination failures that play out across regeneration projects, and King’s Cross was no different. As with many sites, fragmented land ownership, urban blight and how to use space to maximise benefits were live issues.

Key to dealing with these coordination failures was the consolidation of land ownership. Land assembly can be one of the most challenging barriers to developments, as hold-out landowners can drive up costs of assembly before planning permission is even granted. The Channel Tunnel Rail Act 1996 simplified the process of assembling land through compulsorily purchase orders for the construction of HS1, and some remaining pockets of land on the King’s Cross site were assembled through private arrangement. The private sector then further reduced the risk of coordination failures, as the landowners and developer for the site, LCR, Exel, and Argent, formed a single entity – KCCLP – which owned the land. Single land ownership meant that the partnership could more efficiently deliver infrastructure on site, such as the combined heat and power plant and associated pipe network, which is an energy-efficient way of providing heat on the estate.

The use of institutional funding enabled the partners to adopt a long-term view of the regeneration project. Pension funds, such as BT Pensions and AustralianSuper, provided capital for the scheme, whereas alternative funding sources, such as debt financing are more short term in their outlook.

Both of these factors meant the owners were able to capture the benefits of redevelopment across the area, and over time, reduce the effect of coordination failures. This allowed lead developer Argent to create a strategic master plan for the area and develop a “placemaking” strategy (see below), which, according to sources interviewed as part of this research, contributed to creating value across the area in the longer-term. This included setting out how they wanted to have mixed uses on site, rather than it just being used for residential or office, for example. This also meant the owners could benefit from clearing urban blight in the area – up-front costs are paid back with longer-term profit.

Key learnings: Consolidated land ownership combined with long-term capital allows for a more integrated and patient approach to development, including an emphasis on placemaking.

Planning and policy uncertainty

The planning system in the UK produces some of the greatest uncertainty that large developments or regeneration schemes face.11 Its discretionary, case-by-case decision-making processes make development within urban areas especially unpredictable. Although land assembly is always a challenge in urban development, planning risk in Britain makes it especially important for delivering urban regeneration.12

A number of steps were taken to help overcome the challenges within the King’s Cross site, although this was not wholly successful.

To manage the process, the developer undertook a six-year engagement with the community and local authorities.13 This included:

  • Drafting and publishing multiple documents before submitting a planning application to inform local authorities and other stakeholders.
  • Consulting with more than 4,000 people from over 150 local organisations by June 2003, before submitting planning application.14
  • Meeting regularly with King’s Cross Development Forum; over 40 times in total.15

Flexibility was shown by local government in the planning process. Camden and Islington boroughs indicated that “flexibility in phasing, construction and layout to meet changing market demand and ensure diversity of use” was a priority and recognised the need to “design-in” future flexibility into the masterplan and design.16 The planning application focused on the areas where more certainty was needed by the local authorities, through defining the public realm and streets. Instead of providing specific uses and sizes for each building at this point, the application built in flexibility by outlining approximate uses and floorspaces, and maximum heights of the ‘development parcels’ where the buildings would be located.17 This resulted in planning permission which provided flexibility in how floorspace could be used (20 per cent leeway by defining minimums and maximums for uses) and around where such uses could be located.18 The single planning permission granted in 2006 is still being used today to complete the site.

Although these steps seem to have reduced the potential planning failures on the site, it did not fully overcome them.19 The site continued to suffer from a number of issues.

The first was with the planning system:

  • A small portion of the site was in Islington borough, but Islington council initially refused planning permission on the basis that the affordable housing provision was not sufficient.20 However, following public inquiry this was overturned – more than four years after the outline planning application was originally submitted. 21
  • The planning permission for most of the site, granted by Camden council, was subject to judicial review following objections brought forward by local opposition groups. The review found in favour of the development.
  • The results of Camden’s consultations on the 2004 outline application were incorporated in a revised application, submitted by Argent in 2005, which reduced the height of some buildings and added additional greenspace. This likely reduced the amount of space available for commercial floorspace on a development that has subsequently proved to be in high demand.

Secondly, interviewees indicated that policy uncertainty and coordination failures among public bodies added to the challenges of delivering the scheme. Public bodies have different mandates and often poor incentives to maximise the use of sites and can struggle to coordinate with each other and the private sector. Because of the long timelines in the planning system and construction process, policy churn creates substantial risk and uncertainty for developments. For King’s Cross, national priorities such as HS1, and later the Olympics, helped public bodies to coordinate, but elsewhere, policy uncertainty and churn among public bodies will remain a risk.

These market and policy failures caused delays, increased costs, and reduced end returns of the development. The costs were not just financial but resulted in less commercial office space being provided. This meant that although King’s Cross was still a successful economic regeneration project, more space for high productivity firms and jobs could have been provided.

Key learnings: While right for the planning process to set parameters, the nature of local government boundaries and the planning system introduced additional risks and changed outcomes. Added to this is the risk of policy churn or conflicting priorities of public bodies who may be stakeholders. The public sector should reduce these risks by setting clear criteria for outcomes before a scheme begins and look to introduce flexibility to help the private sector better manage risk.

Under-provision of public goods

A further challenge with any site is deciding who pays for associated infrastructure to ensure its success. As no one entity usually captures all the benefits from such an investment it is often underfunded without public involvement.

While King’s Cross already had very extensive public transport connections (six London underground lines and two national mainline train stations are located there), the Government further de-risked the project by both bringing HS1 into St Pancras Station and investing heavily in King’s Cross Station. On the latter, the Government investment of £800 million included ticket halls, new access tunnels, and new lifts to make access to most lines step-free and ease congestion.22

The public sector also funded the creation of the new square outside of King’s Cross station, while the British Library opening its new location next to St Pancras station in 1998 also improved the area.

‘Placemaking’ played a big role in the design of the development. Though difficult to define, Argent, LCR, and Exel captured many of its aspects in their 2001 publication “Principles for a Human City”. These principles included creating a robust urban framework, promoting accessibility, delivering a vibrant mix of uses, and utilising heritage.

Ownership of the whole site and high demand in London meant the developers could benefit more from improvements in the public realm and the higher demand it spurred for the site, likely meaning that there was a greater amount of private sector investment in placemaking than if the site was developed piecemeal.

There is still a calculation to be done here regarding what public goods should be provided on the site and who should pay for it. Some of the heritage buildings on site were demolished by the developers, but what was deemed the best was protected and regenerated. These refurbishments were loss-making but contributed to higher demand and profits for other parts of the development, which helped compensate for these heritage investments. The costs of refurbishing heritage buildings are not just the costs of material, planning, and labour, but include the loss of what could have been built there instead. For King’s Cross, keeping low-rise heritage buildings instead of building new, taller buildings, limited the amount of floorspace which could have been provided.23 If King’s Cross had not been so commercially viable as a project, not all the costly aspects of placemaking would have been possible.

Additionally, placemaking, public space and a vibrant mix of uses contributed to the success of the economic regeneration but also meant there was less room on the site for commercial office space. It is impossible to know the exact mix of uses that would have maximised the economic regeneration of the site but, knowing the high demand for office space in King’s Cross now, it is arguable that more productive firms and jobs could have been attracted if more office space had been provided instead of other uses.

Box 2: “Placemaking” and Central Saint Martins

“Placemaking” is a strategy to make an area more attractive and be seen as a ‘destination’. The benefits of placemaking accrue to an area and over time. In King’s Cross it was enabled by a single land-owning entity with a long-term focus leading the regeneration. The impact of placemaking is difficult to quantify by its nature, but its impact can be inferred from the high value of space on the site.

A wide array of factors contributed to making King’s Cross a “place”. Buildings on site have won design awards (as has Granary Square), it has 10 new parks and squares and 20 new streets, and 40 per cent of the total area of the land is given over to public realm, which is designed to be easily navigable for accessibility.24 Some heritage buildings were rejuvenated, contributing to the aesthetics of the site and distinguishing its character as an area of London. A complementary and considered mix of retail and leisure uses, and cultural and educational amenities, has led to a ‘vibrant’ day-and-night economy in King’s Cross.

Central Saint Martins (CSM), one of University of the Arts London’s colleges of art and design, was seen by interviewees as a key contributor to this vibrancy and placemaking. Initial talks to locate the campus on the site began in 2002, before opening in 2011. As an early occupier of the site, CSM acted as a public sector anchor tenant to de-risk the development and demonstrate the use of the site to other potential occupiers. However, interviewees indicated it contributed much more to the development than just overcoming the first mover problem, also acting as a catalyst for firms to locate on site.

By bringing thousands of students to the site, CSM increased footfall and helped support surrounding retail and leisure uses to enable mixed use in King’s Cross. Interviewees said that other firms, such as Google, reported valuing the vibrancy and creativity CSM contributed to the area. CSM’s activities may have generated industry spill-overs which helped attract firms in similar industries to King’s Cross. In 2014, Louis Vuitton, a high-profile partner and sponsor of CSM, moved its UK HQ to the site.

It seems clear that placemaking has a role in regeneration, but it is also contingent on regeneration. Vibrancy in an area depends on the activities that draw people in. For struggling city centres, regeneration must focus on economic improvements to deliver placemaking too.

Key learnings: The provision of public goods can be one of the most challenging aspects of development, but it is an important part of generating the benefits of regeneration.

Demand uncertainty

Even in London, where demand for space was high and growing, demand uncertainty created several risks for King’s Cross. To deal with first-mover hesitancy from the private sector, different parts of the public sector further de-risked the site by placing a number of institutions in and around the development. Camden Council moved onto the site, while the UK Government decided to put the Crick Institute next to the site, consolidating six scientific institutions from across London into one building. The flexibility provided in the planning permission, referenced above, also ensured that King’s Cross could react to opportunity, attract tenants like Central Saint Martins, and respond to the demand which emerged for the site, rather than committing to certain uses and sizes in its initial design.

King’s Cross benefitted from a niche in the London market, by creating an offer to firms that was distinct from what other parts of central London offered, rather than replicating it. It did this in-part through placemaking and encouraging industry related spill-overs (see Box 2), which arguably created an advantage for King’s Cross in attracting certain types of firms. For example, the high-quality public-realm of King’s Cross and the vibrant, mixed-use environment created by placemaking was regarded as advantageous for firms which compete to attract talent in very tight labour markets, such as the tech sector. Though difficult to quantify, Figure 2 (above) does show distinct differences in the sectoral makeup of jobs between King’s Cross and wider central London.

Key learnings: Even in areas of high demand, the public sector may need to make the first move to encourage the private sector to move in too. Demand for space is varied and changes over time, so providing flexibility in planning can enable a development to respond to changing preferences for space and other emerging opportunities over long-term developments. For example, it’s uncertain how hybrid working might impact the type of office space people and firms need.