Henderson Park is angling to claw back space from an empty pub in a City of London office block – a move the investor said underscored changing attitudes to drinking among the Square Mile’s workforce.
The redevelopment at Ibex House, at 42-47 Minories, EC3, would remove the area available for patrons of the closed Peacock pub on the lower-ground floor, leaving it with the cellar and back-of-house area as well as new space on the ground floor. The changes would shrink the pub from 2,272 sq ft to 1,735 sq ft. The space taken back would be turned into bicycle storage for office occupiers.
The owner argued that the redevelopment would make the pub “more efficient” for a new tenant. The space has been vacant since 2017. But its application with the City of London Corporation also noted that adding bike storage would make the office “more attractive”.
A report from Newmark as part of the application explores the challenges faced by pub operators in London and the trends that mean switching the space to end-of-journey facilities may make sense.
This marks the first year that the number of licensed pubs, bars and restaurants nationwide has fallen below 100,000, Newmark said, citing research by the British Beer Association that claims 750 pubs are set to close in the first half of 2024.
In London, the number of pubs has fallen to 3,500 from 4,840 in 2001, a drop of more than a quarter over little more than two decades. Newmark pins the fall on rising rents, the Covid-19 pandemic and dampened demand – as well as the increasing cost of a pint, now at an average of £5.90 in the capital.
Three of the seven pubs within 500m of Ibex House are closed – Dirty Martini, The Crosswall and The Flock – “suggesting that there is an excess of supply of public house space in the area”, Newmark said.
However, the demographics around Ibex House have made running a pub there more challenging.
“The age demographics show that 24-to-34-year-olds dominate the 500m area around Ibex House, accounting for over 35% of the population in that area – this age group has been shown to have lower demand for alcohol compared to their older peers,” Newmark said.
“In the same 500m-radius area, Muslims make up over 27.8% of the population and Islam encourages abstinence from alcohol. Local population demographics reflect falling demand for drinking establishments.”
The agency added: “The excess of public house supply nearby, in co-ordination with consumers’ falling demand for pubs, demonstrates that a smaller unit at Ibex House is more suitable. Removing the less productive lower-ground-floor space from the Ibex House pub will therefore enable a new operator to trade more successfully.”
At the same time, a boost to bike storage is warranted by the fact that daily bike journeys are now at their highest on record, Newmark said. “When companies are looking for offices, they are making sure they have bike storage as the importance continues to grow, and 11% say better bike storage options at the workplace are what would encourage them to ride to work,” the agency said.
“Offering bike storage facilities demonstrates that the company values employee wellbeing, sustainability and varied transportation options,” Newmark said.
“With the addition of having dedicated changing rooms, it allows employees to change into work attire and keep their personal clothes separate – this helps maintain cleanliness and hygiene in the office environment. Converting the pub space to bike storage will therefore enhance the local workers’ experience of being located at Ibex House.”
The application is another step in what Henderson Park has called a “phased refurbishment” of the Grade II listed block, which it bought for £121m in 2019.
The company has also recently applied for permission to start a new fit-out of the building’s ground and lower-ground floors, as well as alterations to the main entrance and the addition of a roof terrace on the eighth floor.
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