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MALDON DISTRICT EMPLOYMENT LAND REVIEW May 2015

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MALDON DISTRICT EMPLOYMENT LAND REVIEW May 2015 MALDON DISTRICT EMPLOYMENT LAND REVIEW May 2015 INDEX OF CONTENTS 1.0 Property Market Context 2.0 Market Comparisons 3.0 Market Values, Activity and Demand 4.0 Market Appeal Of Existing and Potential Employment Sites APPENDIX I - ANALYSIS OF EMPLYMENT LAND AVAILABILTY APPENDIX II - SCHEDULE OF TAKE UP AND VALUES ACHIEVED APPENDIX III - SCHEDULE OF AVAILABLE PREMISES APPENDIX IV - EXPLANATION OF SCORING SYSTEM AND METHODOLOGY USED APPENDIX V - LOCATION MAPS OF EXISTING AND POTENTIAL SITES APPENDIX VI - SCORE SHEETS OF EXISTING EMPLOYMENT SITES APPENDIX VII - SCORE SHEETS OF POTENTIAL EMPLOYMENT SITES APPENDIX VIII - SUMMARY OF SCORES ACHIEVED FOR ALL SITES APPENDIX IX - AERIAL PHOTO AND PHOTOGRAPHS OF EXISTING SITES APPENDIX X - AERIAL PHOTO AND PHOTOGRAPHS OF POTENTIAL SITES 1 1.0 PROPERTY MARKET CONTEXT 1.1 Maldon District is situated in the south-east of Essex, approximately 54 miles north-east of London and equidistant from the City of Chelmsford to the west, and Southend-on-Sea to the south. The population of the District is around [62,000] dispersed across a total land area of some [138 sq. miles]. 1.2 The principle centres of population are Maldon and Heybridge, Burnham on Crouch and the Ward known as Wickham Bishops and Woodham situated to the north-east of Maldon. The balance of the District comprises some 26 settlements connected by a network of mainly B and C class roads which deliver slow journey times both within and across the District. The major roads serving the District comprise the B1018 between Maldon and Witham; the A414 between the A12 at Sandon and Maldon; and the A132 which connects Burnham and Latchingdon via the B1515. 1.3 Of the three major employment centres, only Burnham benefits from a mainline rail connection to London Liverpool Street via Shenfield with a journey time of circa 1 hour 10 minutes. The services run on the hour and outside peak hours, requires a change at Shenfield. 1.4 Like many rural authorities, agriculture was the largest single employment sector in the District in the 19th and early 20th Century. Local companies such as Bentall’s and Ernest Doe & Sons reflect this history. In the case of Maldon, the Rivers Blackwater and Crouch provide important arteries serving Maldon and Burnham and seafaring has always played an important part in the commercial activities of the area. 1.5 The towns of Maldon and Heybridge expanded as a result of shipping and port related trade with other UK ports, Europe and the Baltic States. That trade withered away in the first half of the 20th Century and with the reduced influence of agriculture, the town needing to find other forms of employment capable of utilizing the District’s natural and historic resources. 1.6 The port related activities left behind a stock of large but relatively low specification buildings. Local employers such as Brooks Brothers, Timber Merchants and Maldon Sea Salt, reflect the towns trading history. Large industrial manufacturers such as BET plc found good uses for these buildings and at one stage occupied the whole of the Blackwater Trading Estate for the manufacture of ladders and other access equipment. 2 1.7 Recently the District has seen the growth of high-tech industrial/manufacturing concerns such as Calorex Heat Pumps, Eppendorf Cryotec and NDC Infrared Engineering. The latter provide precision measurement and control systems to an international marketplace. CML Microsystems who’s HQ is located at Oval Park, Langford, are involved in the design and manufacture of semi-conductor systems and employ circa 100 people. The company moved into the District in the mid 90’s seeking a better quality environment for their highly qualified staff. 1.8 Maldon District offers a good quality of life with a long coastline, attractive countryside access to sailing and other water related activities. The District is close to a number of larger employment centres such as Basildon and Chelmsford but has limited rail communications. For many employers the quality of life outweighs the lack of road and rail links but as a result higher paid employees depend on the car for travel to work. 1.9 The largest employers in the District are manufacturing, construction, wholesaling and retail and professional/public and private services. The latter is the highest single group with over 8,500 employed out of a total potential workforce of some 32,000 persons. 1.10 A facet of the Maldon District employment market is the diverse range and large number of small businesses located across a variety of employment sites across the District. Most small business owners tend to work close to the owners home... As a result it is reasonable to assume that Maldon has within its borders a reservoir of entrepreneurial skill and talent that could be developed further. In our opinion, Maldon has the potential to grow its employment levels by: enhancing the range of small business opportunities in the major urban centres, and other easily accessible locations adopting a positive planning strategy to ensure the delivery of high quality serviced employment sites improving the quality of the existing employment areas by -active support and encouragement to private and public sector investors investment in infrastructure and broadband services improving the quality and training given to the local workforce 1.11 The main obstacle to the achievement of these objectives is the viability of new commercial development and by association, the shortage of alternative means of funding the construction of infrastructure and services to enable the delivery of serviced employment sites. By way of explanation, a serviced site is one where within reasonable size constraints an occupier is able to purchase the land from a landowner or 3 developer and build out their required building or facility without having to upgrade drainage or other services and access the site from an adoptable road without the permission of a third party. Put simply, the market value of new industrial premises constructed in and around Maldon will be less than the combined and value and build cost. This deficit is often funded by inherent costs savings stemming from the move, the release of a higher value site elsewhere or by landlords or occupiers willing to take a long term view or a reduced return on their investment. 1.12 Maldon District is not alone in having to overcome such issues. Market Rent levels for older industrial and office buildings have moved very little throughout the East Anglian region over the last 10 years. We attach at Appendix II a schedule of transaction evidence in Maldon over the last two years. Ignoring small units below 185 sq. m (2,000 sq. ft.) industrial rent levels are generally around £4.50 per sq. ft. per annum and office rents £6 to £10 per sq. ft. per annum depending on age and quality. 1.13 Some speculative development has taken place in surrounding Boroughs and Districts such as Chelmsford and Basildon over this period. These towns have significantly better road and rail links and rent levels for similarly sized new industrial units are £6.25 to £7.25 per sq. ft. per annum and for new offices £15-21 per sq. ft. per annum. Broadly speaking, new development can be made viable at or in excess of these rent levels under current (2015) market conditions as long as land values are not excessive. 1.14 In the absence of new employment development Maldon may find it difficult not only to attract inward investment but also to retain existing employers who increasingly require modern flexible accommodation and in certain instances, larger premises. Such occupiers may have no choice but to relocate out of area. In our experience, existing local occupiers are reluctant to move out of area unless or until they have explored all other options. 1.15 The viability problems set out at 1.11 above and the shortage of available services sites dictate that few occupiers can afford to procure new commercial floor space. As a result such occupiers may have no option but to lease existing buildings as they arise within a few months of their existing lease expiry date – wherever those opportunities arise. Some may plan to acquire new freehold premises – but they are the exception as lease structures, the cost of funding and the required lead in times are not conducive to what can be volatile trading conditions that are not conducive to long term planning. 1.16 The availability of alternative premises and sites during the narrow ‘window of opportunity’ referred to at 1.15 is fundamental to the decision making process. Many prospective relocations and property investment 4 transactions fail due to planning delays or unforeseen costs followed by a loss of confidence by the Directors. 1.17 The District needs to find ways to broaden the range of its commercial offer, boost the number of serviced sites and encourage inward investment from specialist occupiers or ‘footloose’ companies unable to source or afford suitable employment sites elsewhere in the region 1.18 The shortage of suitable employment floor space is not conducive to a healthy employment market but there are no easy solutions when rents and values are so low. Analysis of new commercial developments in the region over the last 15 years would suggest that new industrial development acts as a catalyst to induce investment both by local occupiers and ‘land hungry’ low employment activities such as warehousing and storage. 1.19 New developments, by their nature and design, motivate occupiers and inspire confidence as compared to older industrial estates which offer little or no ‘added value’ to occupiers. Careful thought needs to be given to how such sites can be brought forward and the delivery of roads, infrastructure and services thereto.
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