Why should investors care about placemaking? Interview with Yoo Capital
Creating great spaces with a unique identity and broad appeal takes time, effort and boldness – but patient capital can reap the rewards, says Lloyd Lee of Yoo Capital in an exclusive interview with Infinite Global
What’s the point of “placemaking”, what is it really, and is it just a “buzzword”?
These are questions we have been putting to a range of industry experts, through our campaign – Place Stories – and the responses show that the real estate sector is beginning to coalesce around a spectrum of shared placemaking principles. But significant challenges remain and have been frequently observed.
One of the most notable of these challenges is just how to encourage investment in placemaking, when the upfront costs can be considerable and the return on investment (ROI) may not filter through for several years.
It’s something Lloyd Lee, Managing Partner at Yoo Capital, is passionate about. And he should know: Yoo Capital is leading the high-profile redevelopment of Olympia London, where placemaking is key as it transitions from an event and exhibition centre into a multi-functional space with wide appeal.
In a wide-ranging interview on the rationale and practicalities of placemaking, he acknowledges investors’ responsibility to do the maths first and foremost, but adds, “Investors are starting to wake up to the fact that returns have to be replicable and sustainable. The danger in being tempted by the “short buck” is that you actually lose it in the end. By contrast if you think about the long term, you create sustainable value for everybody.”
Articulating the ethos
There’s still some way to go to get that message across. To put the placemaking agenda into practice, for Lee, the importance of communication cannot be underestimated. He makes the point that investment managers must articulate the investment ethos, in terms of both the numbers and the narrative, to demonstrate how a placemaking approach will pay dividends over time.
It’s not just investors who need to be won over. Community engagement is vital too, in order to get local buy-in to a scheme. “It’s a lot of work and not a lot of people do it to any significant degree,” says Lee. “But you can’t just pop up with a plan and expect stakeholders who have ever seen or heard of it to just say: what a great idea!”
“Talk to the leaders of the borough. Look at the industrial strategy that they’ve set out for the community. Listen to people and take their views on board, incorporating them into what you are doing so that you are contributing back. That’s the logical approach.”
This is about far more than paying lip-service to transparency and community outreach: Lee argues that it is fundamental to a scheme’s success (and consequent value), by making the area popular and busy. His view is that thinking about what local residents, businesses and other users want from the outset, and designing spaces that fit their needs and aspirations, is a far better approach than simply deciding what to build in a vacuum, and trying to change it afterwards to make it more attractive.
His advice is to ask: will people actually want to go there? Instead of, for instance, a pure office or luxury residential, developers should increasingly consider incorporating cultural and social assets that drive footfall and consumer spend – such as theatres, restaurants, bars, a hotel, pop-ups and non-profits and perhaps even schools. Doing so is more likely to create a place that is heaving with activity seven days a week, attractive both to locals and as a destination.
“Step away from the Excel spreadsheet and look at it as a human being,” Lloyd Lee says. “The minute it’s vibrant and there’s demand for it, that’s when you can start to look at the economic pieces to make the puzzle fit together. That’s when you’ll get an occupier saying, I not only prefer that location, I would even pay more for it. You need to be confident about what you’re doing and be bold.”
Underpinning this is experience, identity and legacy. It’s what people do in those spaces and how they feel about them that matters. They need to have meaning and purpose now, but the architecture also needs to be timeless and sustainable so that spaces can be adapted and re-adapted for generations to come – something that resonates across the regeneration of Olympia.
“If you can create an open palette for future generations to find new uses and create new stories, that, for us, is what placemaking is all about,” says Lee. “Who’s writing that story, how many different stories can be written in one place to create a tapestry of storytelling. That’s what gives the space its character.”
Building that character may take time, but Lee’s message is that it will ultimately be rewarding. It will require patient capital, but that goes hand in hand with economic, social and environmental sustainability as well as long-term value creation. For investors prepared to take the long view, placemaking is more than just an empty phrase added to a planning application – it’s a concept with longevity, a narrative that will endure. And that’s a story worth listening to.
The Olympia London Story
For over a century, London’s Olympia has been playing host to global innovation, culture and entertainment as an event and exhibition space. Yoo Capital is keen to build on its heritage whilst re-imagining the possibilities of the space for a wider audience.
With land such a scarce commodity in London, Yoo Capital feels a real responsibility to make the most of it, in terms of ensuring the local community felt the benefit of Olympia London. That’s why they are going above and beyond when it comes to community engagement.
As well as extending the public consultation timeframe to months rather than weeks, it has also been creative with its community engagement. For example, the company threw a Halloween event for local families last year and got 700 RSVPs for children and their parents.
By opening dialogue, building trust and generating goodwill, stakeholders can feel that their voice has value, and that this is a scheme with an identity and a narrative they can get behind.