The Crossrail journey has been far from smooth. Tunnelling works started on the line that runs from Reading and Heathrow in the west, to Shenfield and Abbey Wood in the east, in 2012. Since then Europe’s biggest infrastructure scheme has been running over budget and suffering from signalling problems. A planned December 2018 opening was scrapped and a blame game about who is at fault has ensued.
Then, last week, Crossrail’s new chief executive Mark Wild revealed there is no chance of completion this year. Plus, he doesn’t “actually know when it will be delivered after that”.
Today a new concern has emerged. Research compiled for the Evening Standard lays bare how London businesses could be hit by Crossrail hold-ups. In the West End alone, retailers and restaurant owners stand to miss out on at least £1 billion of extra income for each year the opening is delayed.
Jace Tyrrell, the boss of New West End Company which represents 600 traders and made the forecast, calls the delays “deeply frustrating”. Anger is also being felt by those working in property, tech and leisure, all across the line.
The New West End Company’s £1 billion calculation is based on extra footfall, and thus sales, that Crossrail, now called the Elizabeth Line, was set to bring in for High Street brands when it opened.
Firms near the Bond Street and Tottenham Court Road Crossrail stations were among those hoping for thousands of extra customers to help them battle headwinds such as weaker consumer confidence and online competition. Many are also struggling with Brexit potentially making London look less attractive to tourists, and higher business rates and rents.
Tyrrell says: “West End businesses have already paid hundreds of millions of pounds to fund the Elizabeth line and made plans and investments on the promise of a 2018 opening.”
He is urging the government to work with businesses to “ensure that the West End continues to thrive at this challenging time”.
Upmarket grocer Planet Organic is among retailers that opened on the tatty end of Oxford Street enticed by the prospect of 200,000 passengers a day using the Elizabeth Line at Tottenham Court Road. Boss Peter Marsh says he is “disappointed” by the delays.
Veteran restaurateur David Page, who chairs Fulham Shore, the owner of pizzas chain Franco Manca, says he has 20 sites waiting to feel the promised benefits. “We wait with bated breath to hear the next opening date.”
It’s not just retail and leisure companies reliant on passing trade who are affected. Those with headquarters in the area are irritated by the endless delays.
In 2015 when Facebook signed for a huge new headquarters at One Rathbone Square, just by Tottenham Court Road, its real estate head cited Crossrail as being one of the area’s biggest draws. Sources say Facebook is among several tech companies “disgruntled” by the rail setbacks. Facebook declined to comment, but is understood to have viewed Crossrail as being a good way to recruit new staff seeking a fast commute.
Not all West End firms are fretting though. Chinatown landlord Shaftesbury, which should see busier shops and restaurants once the new Tottenham Court Road station opens, is upbeat. Shaftesbury’s boss Brian Bickell says there will be “generational benefits” in London from the line. He adds that there is still a queue of brands that want to open on his estate, regardless of Crossrail delays.
Most companies canvassed by this paper say they want more guidance on the opening date. They say they want to get their slice of the £42 billion boost to the economy predicted by Crossrail’s backers (the government, the Greater London Authority, and firms which are contributing via business rates).
Crossrail’s Wild says: “My team and I are working to establish a robust and deliverable plan to open the railway. Once that work is complete then we will be in a position to confirm a new opening date.”
Mayor Sadiq Khan has tried to distance himself from the fiasco, with a spokesman saying he “shares the anger and frustration of local residents and businesses”.
A row has been rumbling about what he knew about the delays and when. Arguably, had businesses been aware of the delays earlier they might have been able to plan for them better.
The disruption is not solely to the West End. Kate Nicholls, chief executive of trade association UK Hospitality, points to hoteliers which invested in sites close to the new Custom House station near Canary Wharf. She says they had expected numerous business travellers to check in this year attracted by the proximity to the ExCeL conference centre. “These firms will have to wait longer for that,” says Nicholls.
In the pubs industry, Young’s boss Patrick Dardis thinks the delays are a blow to watering-hole owners already grappling with rising wage and rates bills. He says: “Young’s is mostly definitely affected. We were looking forward to the end of years of construction disruption from Crossrail, and the promise of better trade as a consequence of the extra flow of people.”
He has pubs near the new stations, including at Farringdon and Stratford.
Near the outer London parts of the Elizabeth Line, some experts say the opening confusion is doing the housing market no favours. Buy-to-let investors and first-time buyers had previously flocked to snap up homes on the route, hoping for future rises in property values and shorter journey times in and out of central London.
Alastair McKee, managing director of One77 Mortgages, says demand for properties near new commuter belt Crossrail stations such as Slough has dropped off recently. He puts that down to Brexit and Crossrail uncertainty. He adds: “With no Crossrail end in sight, the popularity of investing along the line has dwindled, for the time being at least.”
Jon Di-Stefano, whose firm Telford Homes has recently built flats near the Stratford Crossrail station, thinks there are other factors which “weigh more heavily right now” than the Elizabeth Line. His company is having to cope with stamp duty changes and Brexit deterring some buyers.
The embarrassing Crossrail delay is a burden London could do without. Businesses will be crossing their fingers that it can get back on track soon.
Could delays rerail hotel plans?
Travelodge’s boss Peter Gowers has suggested delays could interfere with hotel firms’ investment plans.
His chain has hotels close to 18 of the Crossrail sites, including a £95 million, 395-bedroom building near Liverpool Street opened last year.
Gowers says Travelodge is eyeing 15 more potential hotels along the route, “particularly at the ends of the line which should benefit most from regeneration”.
But he warns Crossrail delays are unhelpful: “Unfortunately, even short-term delays make it harder to make long-term capital commitments, especially in the context of wider economic uncertainty.”
However, property agents remain bullish and predict any delays on investment decisions in the industry will only be short term.
Colin Low, CBRE’s head of hotel investment in Europe, thinks long-term buyers continue to be attracted to “heritage, landscapes and culture that make the UK and London a must-visit destination”.
JLL’s Graham Craggs says he doesn’t think short-term uncertainty is a “material deterrent” for buyers.
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