Rivers give life to land. They also give life to commerce, facilitating the flow of goods and serving as the focal points for trade. But in many parts of the developed world, when old industries gave way to new and manufacturing receded, waterfronts decayed, warehouses closed and docklands stood as tombstones for the death of traditional industry.

Eventually cities started to realise they were letting their best assets go to waste. Waterside regeneration projects have been underway across the UK for many years, and more are coming on stream. From Belfast to Birmingham and Swansea to Southend, riverbanks, canal sides and coastlines are being given second lives. Waterside redevelopments have a way of emboldening quirky designs, such as Cardiff’s love-it-or-hate-it opera house. They also have a way of encouraging developers to undertake projects they might not do elsewhere.

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Market failures

Even so, they tend to need a push from the public sector, says Nora Galley, a partner at Roger Tym & Partners, and public funding is sometimes needed to reverse “market failures”, in which demand is frustrated by a lack of supply. “It is a vicious catch-22 in which demand is apparently not there because there is no supply to offer. So the idea is to use public money and a desirable waterfront to create the kind of operating environment and visual appeal to take away that market failure and capture demand that the economy is perfectly capable of generating,” she says.

The market, Ms Galley adds, “cannot create the certainty needed to take the risks and to get the returns that are achievable. So the public sector takes away those obstacles and lets the market take over.”

This is what is happening in Hull, in north-east England, which has a long-underperforming economy and had nary a new office building in the past 20 years. Hull has no office market to speak of – but it does have one of the most splendid estuary waterfronts in the country with a patch of undeveloped land. A building intended to be Northern Foods’ headquarters and abandoned after the company went through a restructuring has been redeveloped on spec, given an attractive new plaza surrounding it and had its flood defences bolstered. This became Phase 1 of the Humber Quays development that also includes residential, retail and leisure facilities.

“Suddenly it is making a staggering difference in terms of how the area is perceived,” says Ms Galley.

Transformation

In Manchester, at the offices of investment agency MIDAS, Robbie Muirhead, charged with attracting investment in the ‘knowledge’ sector, points out of the window across the water to Salford Quays. “See those – they used to be broken-down Victorian warehouses. Now I look across there and see BUPA, AIG, media companies. What we’re witnessing is the total transformation of Manchester in a mere 15 years.”

“And,” he adds, “we have taken our people with us – we have 2% unemployment.” It is not just the sons and daughters of the former warehouse workers who are working in the posh offices, he says – their parents are working there too.

Manchester’s regeneration, given impetus by a terrorist bomb that ripped apart the city centre in the mid-1990s, can be considered one of the UK’s most successful, as can its transition from the industrial to the digital age. But old industries have not been washed away entirely. “There is still a million tons of cargo coming into Manchester on ocean-going ships,” says Mr Muirhead.

Manchester’s makeover is not yet complete. Work continues across the city, from the Spinningfields city centre commercial development to various projects in the traditionally downmarket east of the city, where the canal system is key to improving the ambience. Construction began this summer on the first phase of Islington Wharf, a three-acre site on the Ashton canal where ISIS Waterside Regeneration intends to create 500 homes next to hotels, retail, leisure and business space.

ISIS, which has 14 schemes in nine UK cities, is calling Islington Wharf its flagship project and says that Manchester will lead the charge towards ‘buy to live’ city-centre developments. “The ISIS philosophy is vibrant waterside living, not selling to investors,” says Mark Howe, project manager at Islington Wharf. ISIS has a policy of only selling to owner-occupiers.

Soulless cities

ISIS chief executive Mark Ryder blames “identikit” and “soulless” city-centre housing schemes for the failure to create sustainable communities in regenerated areas. The Islington Wharf scheme will include 25 family-friendly homes with gardens and offer 40 different apartment types.

“An oversupply of one and two-bedroom apartments – many of them identikit in design – boarded up ground floors in sterile developments and a slowdown in the market have prompted hard questions about the sustainability of city-centre living,” Ryder says. “It’s time to move on from the monoculture of city-centre living, which only appeals to the pockets and aspirations of one group of people.”

Islington Wharf is intended to be the gateway to what is billed as New Islington, and a lynchpin for a group of new neighbourhoods developing on the city-centre side of Great Ancoats.

Canal development

Rochdale, a small borough on the outskirts of Manchester, meanwhile, is working to regenerate its part of the canal corridor, backed by money from the North West Development Agency. The historic Rochdale Canal between Manchester and Littleborough was reopened in 2002, in a move local authorities hope will spark the regeneration of all of the areas through which the canal passes. Anticipated benefits of the canal corridor strategy include: the creation of 15,000 jobs, one-third of which will be accounted for at the Kingsway Business Park; the construction or reuse of 570,000 square metres (m2) of office, leisure and shopping floorspace; and the reclamation and recovery of more than 530 hectares of land.

In Glasgow, the £750m ($1.4bn) International Financial Services District (IFSD) project is part of a 15-year, £1.67bn plan to regenerate an eight-mile stretch of the River Clyde. The aim of the public-private partnership is to secure more than 30,000 jobs (20,000 of them new to Scotland) by 2011 and generate more than £440m annually in additional gross value added to the Scottish economy by 2025. It involves the development of 600,000m2 of new office space and a £50m investment in the broadband network, and is meant to be a catalyst for regenerating the Broomielaw and west city centre neighbourhoods. So far more than 9500 jobs have been created or safeguarded in the area and about 275,000m2 of office space created, IFSD officials say. Radisson SAS has opened a £45m five-star hotel, Glasgow’s second, on the edge of the district.

The IFSD presented “an opportunity to start marketing Glasgow as a financial services location”, says Fraser Galbraith of Scottish Enterprise Glasgow.

Early investors

US-based Morgan Stanley was one of the earlier tenants in the IFSD, arriving in 2002 when it decided to build up institutional support operations in Scotland after a successful pilot programme at the bank’s Cumbernauld credit card centre.

“We have four floors of a six-floor building on Douglas Street and we have announced our expansion at a building called Sentinel on Waterloo Street just around the corner, and we’ve taken two floors there to accommodate our expansion of 300 new employees over next two to three years,” explains Morgan Stanley Glasgow’s executive director of operations Margaret Wallace. This will add to the 500 existing employees at the Douglas Street site who provide back-office support for institutional sales and trading, mainly for the London office.

“When we started here [the IFSD] wasn’t quite the centre that it is now, but nevertheless it was well known that big Scottish companies such as Abbey had a large presence in Glasgow, although they focus more on the retail side. So there was an attraction that we were the first on the wholesale side, yet we could draw from the experience of those who had been in banking here already.”

Offshore, on the Isle of Man, the Department of Tourism and Leisure is leading a project to develop a four or five-star hotel on Douglas Quayside in an effort to attract more upmarket business and leisure visitors. The department is also supporting other hotel developments in the south and west of the island, in Castletown and Peel, and has relaunched its conference initiative based on a £15m redevelopment of the Villa Marina.

Clearly the largest and most ambitious regeneration project in the UK is in London, where the need for new space to accommodate an anticipated population boom has found a perfect match with an influx of development funds ahead of the 2012 Olympic Games. In the next 10 years the number of Londoners is expected to increase from 7.4 million to 8.1 million, and east London is one of the few parts of the city that has room to grow on the necessary scale. Existing residents could use a boost as well: the Thames Gateway has pockets of high unemployment and includes some of the poorest boroughs in the UK.

Olympic catalyst

Post 2012, this part of London will be unrecognisable from its current condition. The Olympic Village, once the athletes leave, will become a housing complex; the media centre, high-end office space for digital media companies. And a range of new mixed-use developments is planned across the Thames Gateway (see below). Canary Wharf, now the grand dame of UK development schemes, is getting some work done too: 1.8 million m2 of office space is proposed or under construction, to add to its present 300,000 m2.

But it remains debatable how much demand really exists for residential and commercial space beyond Canary Wharf. Real estate companies say house prices in this part of the city have been flat for the past few years while they have soared elsewhere in London, and one suspects owner-occupiers are a rarity.

Carving down

The first phase of the Royals Business Park, the 75,000m2 Building 1000, was finished two and a half years ago but sat vacant until the first tenants moved in this summer (a UK IT firm with about 50 employees). Plans to rent it to one large tenant company were abandoned and the floor space is being carved down into more bite-sized chunks of less than 1600m2.

“It’s very cost competitive – half the rent of Canary Wharf (at £19-£20 per square foot) and cheaper than Manchester city centre or Birmingham,” says Oliver Sylge, inward investment manager for Gateway to London.

The building “would very much suit a European business operation”, he says, because of its easy access to City Airport with its services to the continent.

Enquiries will pick up once an anchor tenant is landed, he adds, and then the surrounding area will begin to come to life. “Once a big tenant can be drawn in [to Building 1000], services and activity will follow. It’s all about creating a sense of place, an urban core.”

The trouble is, one cannot easily manufacture the kind of charm or character that comes with time and history. New-build structures often lack aesthetics, and do not tend to grow old gracefully – think of the concrete monstrosities left over from the 1950s for an idea of how today’s housing and office complexes might look to tomorrow’s eye. And planned communities often feel sterile, and as a result, not much like communities at all. Not even a flowing river can bring life to a dead neighbourhood if it has no soul.

LONDON'S EASTERN PROMISE

East of London’s Canary Wharf, investment in transport infrastructure has preceded regeneration, which will prove helpful in the long run but creates a strange present situation where sleek new trains deliver passengers to what feels like nowhere. “There is a perception that east London is remote,” says Craig Harrison, business development manager for Think London, the capital’s inward investment agency.

In fact, the area is well connected to London by train and to other UK and European cities by plane. Though most long-haul trips out of London still mean making the long haul to Gatwick or Heathrow, nearby City Airport, designed to cater to business travel, has 14 airlines serving 27 destinations. A recent Dockland Light Railway extension has brought the line straight to the airport, negating the need for even the short cab ride from the City. Passenger volumes are expected to quadruple by 2030.

The reason the Thames Gateway seems a million miles from London is less to do with the physical distance as the lack of activity on the ground. But one could have said the same thing about Canary Wharf in its early days, when it was a cluster of tall buildings and little else. “You used to catch a bus [in] in the morning and a bus out in the evening; it was desolate after work. Now there is leisure, shopping and nightlife,” says Oliver Sylge, inward investment manager for Gateway to London.

Olympic preparation

This is the vision for neighbouring areas as development pushes out eastward on the back of preparations for the Olympic Games in 2012.

In a section known as East Amsterdam, connected to the Olympic site, 48,000 new homes will be built. Stratford City, a 185-acre, £4bn ($7.5bn) extension to the Stratford town centre, will be the size of Canary Wharf and include commercial, leisure, hotel and residential facilities.

At the eastern edge of Canary Wharf is Wood Wharf, a mixed-use development from partners the Canary Wharf Group, Ballymore and British Waterways. Now in the planning stage, it will come up for consent next year and the first phase is due for completion in 2009. State Street Bank and insurer Aon are having buildings built adjacent to Wood Wharf.

On the Greenwich Peninsula, a 120-hectare former gas works site, 120 square metres (m2) of commercial space, 1200m2 of retail and 10,000 new homes are planned. “It’s the next thing east of Canary Wharf and prime land in terms of waterfront,” says Mr Harrison.

Construction will begin soon here on the O2 arena. Regional development agency One East London is campaigning for the O2 dome to be selected as the site for the UK’s first regional casino. The complex would represent the largest event leisure investment in east London, including the development of facilities such as an Olympic-standard ice-rink, an extreme sports venue and a sports arena, in addition to the controversial casino.

Martin Venning, communications director of the Thames Gateway Development Corporation, says: “These proposals fit perfectly with the strategy for growing and developing east London and the Thames Gateway. It is an exciting proposition.”

Further east, in the Royal Docks area, Silvertown Quays will host 5000 homes, 170,000m2 of retail, leisure and office space, and, it is hoped, 5000 new jobs. This derelict and disused site, once developed, is to serve as the town centre for the Royal Docks.

South of Silvertown, Minoco and Peruvian Wharfs, with about 5200 units, will offer housing with a few commercial entities utilising the wharf itself. Across the water from the quays, the ExCel exhibition centre is being expanded to 305,000m2 so that it can host larger events.

Buy-back scheme

At Dagenham Dock, part of Ford’s industrial site, where the US auto company used to make cars and now produces diesel engines, the government has bought back 329 acres as production has been downsized. This space is earmarked for environmental technology industries and advanced engineering companies. Nearby Beam Reach has been designated for light industries.

A £44m remediation of the 35-hectare Woolwich Arsenal area will convert the former munitions site into high-end residences (priced about £200,000 for a one-bedroom flat), plus a museum and tourist centre as well as warehouses and space for light industry. “It’s on the M25 [London’s outer ring road] and north circular [inner ring road] and the ports so it is popular with inward investors,” says Mr Harrison.