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Cannock Chase Economic Development Needs Assessment Final Report

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Cannock Chase Economic Development Needs Assessment Final Report Cannock Chase Economic Development Needs Assessment Final Report Cannock Chase District Council April 10th 2019 17266182v3 © 2019 Nathaniel Lichfield & Partners Ltd, trading as Lichfields. All Rights Reserved. Registered in England, no. 2778116. 14 Regent’s Wharf, All Saints Street, London N1 9RL Formatted for double sided printing. Plans based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A 42213/01/SPM/CR 16540584v2 17266182v3 Cannock Chase Economic Development Needs Assessment : Final Report Executive Summary Lichfields was appointed by Cannock Chase District Council [CCDC] to undertake an update to its Employment Land evidence base in November 2018. CCDC is currently in the process of preparing a new Local Plan for the period 2018 to 2036 and is therefore reviewing its existing employment land evidence on the supply and demand of employment land in the District. The EDNA will therefore form a key part of the evidence base for the emerging Local Plan, identifying future growth needs across Cannock Chase within the national and local planning policy context. The EDNA follows the requirements set out in the revised National Planning Policy Framework and Planning Practice Guidance with regards to planning for economic development needs. Both quantitative and qualitative methods have been used to assess the need for, and supply of, employment land. This involved analysis of economic, demographic and commercial property market data, and consultation with a range of stakeholders including commercial agents, economic development and business organisations, and a survey of local businesses. The purpose of the EDNA is to provide the Council with an understanding of the current and potential future requirements for employment land and how this aligns with current stock of B-Class employment land in the District. This was underpinned by a range of scenarios that explored how Cannock Chase’s economy may change over the plan period. Economic Context There have been widespread changes to the local economy and business base of the District following the decline of traditional manufacturing and mining-related activities in the 1980s, which has had a particular impact upon communities such as Rugeley and Brereton. However, whilst the industrial restructuring remains ongoing, in recent years Cannock Chase has seen prolonged levels of job growth and inward investment, predominantly related to logistics, building on the geographical benefits of the District’s proximity to the national highways network. Companies investing in the District have included the likes of Amazon, DHL, Ultra Electronics and Rhenus Logistics. Cannock Chase District can be characterised as having three distinct economic sub-areas: Cannock, Hednesford and Heath Hayes; Rugeley in the north of the District; and Norton Canes in the south-east. The majority of economic activity takes place in the Cannock, Hednesford and Heath Hayes sub-area, which benefits from excellent transport connectivity with the M6 Toll. This sub-area supports the most significant concentration of business activity in Cannock and is home to many well-established local and international firms. The Kingswood Lakeside Employment Park is located immediately to the south-east of this sub-area and is recognised as a key strategic site in Staffordshire’s industrial assets. The District also benefits from its outstanding natural environment, which provides specific business opportunities in tourism and leisure. Overview of B-Class Employment Space Employment space in Cannock Chase is dominated by industrial uses (i.e. manufacturing and distribution uses), although long term trends indicate a gradual erosion of B1c/B2 industrial space in the District; a moderate growth in office space; and a very strong growth in B8 logistics. These recent development trends have resulted in the stock of B class employment space in Cannock Chase increasing over recent years. The existing employment space in Cannock Chase is focused across several large Business Parks and Industrial estates that follow the A5/M6 Toll in the south and have successfully attracted a number of footloose warehousing operators. There are also a number of more traditional industrial estates to the east of Cannock, and in the vicinity of the decommissioned Rugeley Power Station to the north. The majority of the B class employment space is industrial in nature, with Cannock itself having a modest stock of office floorspace that has been affected by Permitted Development Rights to residential use, although there are several successful out of town business parks with modern B1a office floorspace. Pg 1 Cannock Chase Economic Development Needs Assessment : Final Report Commercial Property Market Cannock Chase District’s commercial property market is relatively localised and, notwithstanding some very large logistics employers, remains reliant on a large base of SMEs and existing occupier churn. Notwithstanding this, from a commercial property market perspective, Cannock Chase District is not considered to be a self-contained FEMA, as it has strong relationships with a number of surrounding authorities, particularly in respect of commuting and migration patterns. However, in respect of the supply of employment land, and the potential for future growth, the District is considered to function in a relatively independent manner. The District has been very successful at attracting new companies to locate in Cannock Chase, with large units available in highly accessible locations beside the strategic highways network. The area also benefits from relatively low business and rental costs compared to many other locations in the West Midlands, which brands the District a relatively cost-competitive location for occupiers. Commercial agents confirmed that significant levels of development have come forward in the industrial and logistics sector over the course of the last five years or more, including a relatively high number of speculative developments coming forwards for B8 units in excess of 10,000 sqm. This has demonstrated a high degree of confidence in the Cannock Chase market which reflects the District’s excellent linkages with the M6 and M6 Toll Motorways. However, more recently there has been a relatively slow take up of a number of larger speculative units securing occupiers although some have attributed this to uncertainties associated with Brexit. Commercial agents also highlighted that there is evidence of demand shifting towards smaller-scale purpose built industrial units of up to 3,000 sqm from largely indigenous businesses looking to expand. Growth Recommendations In recent years, improved market conditions have led to a surge in speculative industrial development for larger-scale B8 units in the region of 10,000 sqm and above. However, agents reported that market signals suggest that this has peaked, with demand shifting towards smaller-scale purpose built industrial units of up to 3,000 sqm. Opinion was divided as to whether this was just symptomatic of wider macro-economic uncertainties arising from Brexit, or more fundamental issues in the Cannock Chase market. Agents were of the view that this shift in demand is largely driven by indigenous businesses looking to expand. It was widely considered that future take up is likely to follow similar historic trends, with future development for warehousing and to a lesser extent industrial uses and a need to protect existing B-Class sites in the most accessible locations against further losses to residential or alternative uses. The EDNA modelled a range of employment land growth scenarios in accordance with the revised Framework and PPG. Having modelled these scenarios, and taking on board the qualitative commentary above, it is recommended that Cannock Chase District’s B-Class employment land OAN comprises a range of 30 ha to 67 ha between 2018 and 2036, and between 33 ha and 74 ha to 2038. These land requirements are driven in particular by land-hungry B8 logistics, which is consistent with past completions and those sectors forecast to grow strongly in the Experian projections (as well as the key target growth sectors in the SEPs), whilst the bulk of extant planning permissions for B-Class employment sites relate to B8 warehousing. In terms of how the employment land requirement for Cannock Chase District could be split across the B- Class sectors, it was considered that a split of 25% for B1a/B1b office and 75% for B1c/B2/B8 industrial/distribution would be appropriate. Pg 2 Cannock Chase Economic Development Needs Assessment : Final Report Contents 1.0 Introduction 3 Scope 3 Methodology 4 Report Structure 6 2.0 Policy Context 7 Introduction 7 National Planning Policy Framework (February 2019) 7 National Planning Practice Guidance 10 Sub-Regional Economic Strategies 12 Local Planning Policy and Economic Studies 14 3.0 Economic Context 18 Overview 18 Economic Conditions and Trends 20 Defining the Functional Economic Market Area 28 Duty-to-Cooperate 40 4.0 Overview of B-Class Employment Space 48 Introduction 48 Employment Space 48 Development Rates 51 Growth in Non B-Uses 54 Summary Growth Needs of Non-B Uses 62 Conclusions 63 5.0 Commercial Property Market 64 National Economy 64 Cannock Chase District Overview 65 Future Growth Potential 69 Business Survey 70 6.0 Future Employment Land Requirements 78 Introduction 78 Methodology 78 Pg 1 Cannock Chase Economic Development Needs Assessment : Final Report Demographically-derived
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