The Future of London Heritage Quarter – Trends up to 2040

London Heritage Quarter have partnered with Arup to assess key trends and developments
impacting the area, up to 2040, and to produce recommendations for action.

Work and skills in 2040

• The number of jobs in Westminster will grow, but not as fast as elsewhere in London. However, Westminster will remain at the centre of London’s economy, with the highest number of jobs in London at 820,000 by 2040.
• By 2040, there will be up to 1.1m new green jobs in London, with finance the largest green economy sector. The green transition may be constrained by a lack of skills, and reskilling will require a significant cross-sector effort.
• UK government is aiming to relocate around one-fifth of civil service roles out of London by 2027. Private sector occupiers may follow, and others may take the vacated space. This shift may unlock opportunities for growing a private sector presence in the area, subject to adapting the office stock to new occupiers’ needs.
• The ‘flight to quality’ now appears structural. This means that higher specifications and more central locations are winning out over secondary centres and stock and may continue to do so to 2040. Location is increasingly a key factor that determines the desirability of offices. Office swill need to offer a diversity of spaces, from larger, flexible collaboration spaces to smaller spaces for focus tasks or online meetings. Many workspaces will become compelling destinations, drawing workers away from home and third spaces.
• Employees are returning to the office slowly, but flexible work may lead to right-sizing in the short term. Office occupancy is expected to recover to 2019 levels by 2040 but could be reached as early as 2030 or earlier if the economy grows faster.
• Artificial intelligence (AI) will significantly impact the nature of work by 2040, potentially creating new roles, and augmenting others. London HQ is well-placed to benefits from new and augmented roles created by the AI revolution in the workplace and will remain a desirable venue for in-person
  meetings.

Retail in 2040

• Central London will gain from a gradual recovery in retail spending. Whilst real worker expenditure might not reach 2019 levels until the mid-2030s, (Arup, 2022), tourism spending is expected to rebound quicker (GLA Economics, 2022). In the long-term, the vibrancy of the retail offer in the
  LHQ area will still depend on a balanced mix of office workers, tourists and locals.
• In-person stores will remain competitive by providing a more immersive, personalised experience. Some flagship physical stores may introduce theatrical settings through alternative store layouts, lighting design or multi-sensory interventions. Other retailers may prioritise data-driven
  personalised interactions.
• Consumers and retailers will embrace the era of localism, distinctiveness and attention to ethics. In the short term, this may lead to a shift from major chain brands or innovative forms of co-location. While chain stores may rebound in the long term, they are likely to be repositioned as
  more local and community-oriented.

Read full report here