UK Cross Sector – Autumn 2018

SPOTLIGHT The New Savills Research Urban

Greater influence Strategic growth Homes, workspace & repurposing retail Urban Dorset Urban Dorset

By reinvigorating itself and becoming a thriving city, BCP has the opportunity to lead the way in transforming the image of the area and driving growth

Key recommendations and opportunities for ‘Urban Dorset’ A city by the sea Urban Dorset All You Need Plan strategically across the The new Bournemouth, Christchurch and Council To Know 1whole urban area to deliver will be formed in April 2019 providing a unique opportunity a joined up approach to growth to rethink the development of the area

Use its greater influence From April 2019, Bournemouth, What does ‘Urban to be able to attract more private 2as the 12th largest district Christchurch and Poole will be Dorset’ mean sector funding. to attract public and private combined into one new unitary practically? The merger will enable the 23,500 sector funding authority, ‘Urban Dorset’. What By combining the three new council to restructure its There are 23,500 students at the does this mean for the urban area boroughs together, BCP will workforce (reducing the roles two universities Improve road and rail of Bournemouth, Christchurch have new opportunities. Being which overlap between the 3links across the urban area and Poole (BCP)? larger it will have a greater three boroughs and allowing The opportunity for and to its neighbours to ease influence in Government which for more specialist roles) and ‘Urban Dorset’? movement and allow growth Urban Dorset will help it to attract significant it will be able to have one Combining and concentrating its area. From forming a new Local appealing place to live, work and The creation of ‘Urban Dorset’ funding through City and relationship with its neighbours, resource and attracting greater Plan to funding infrastructure visit. The LEP has big ambitions Brand the area to bring in will mean BCP becomes the Growth Deals. the LEP, local businesses and investment will mean that BCP improvements within the urban area to increase GVA across Dorset by 4more commerce and high 12th largest local authority For example, the £1.7bn landowners, the airport and the will be able to take a more strategic to improve connectivity, the merger 50% by 2038 and create 80,000 value employment building on district in in terms Transforming Cities Fund two universities amongst others. approach to the planning and growth will allow change to move from additional jobs. its lifestyle offering of population with 394,000 through which the West of the urban area. piecemeal improvements to wholesale By reinvigorating itself and 12th people. This is more people than Midlands has been awarded In its recent statement of intent, the enhancements. becoming a thriving city, BCP has Urban Dorset will be the 12th largest district Build 2,160 homes a year Cardiff, Southampton, Brighton, £250m for improving transport. LEP aims to pursue formal core city Additionally, combining to become the opportunity to lead the way in 5by developing suitable Portsmouth and Exeter and only Being a larger area and more status for BCP and support ‘Urban Dorset’ will enable the area to transforming the image of the area brownfield sites and releasing 14% fewer than Bristol. influential, it is also more likely masterplanning across the urban create a new brand for itself as an and driving growth. Green Belt land Sizeable district Bigger than Cardiff, Brighton and Southampton Economic output Urban Dorset has a similar number of jobs, economic output and Better connect the productivity to Cardiff: Its challenge is to compete with Bristol and Southampton 6business park at the Airport to Wessex Fields and 500,000 £55,000 12 other business centres to 12 miles of beach, 2nd largest natural promote growth and support 450,000 Southampton harbour globally and the LEPs plans an international airport 400,000 £50,000 Bristol

Promote, facilitate and 350,000 Cardiff develop the ‘Digital village’ 7 Manchester Birmingham 300,000 at Talbot Village alongside the £45,000 universities to accommodate 250,000 Urban tech and creative start-ups Dorset Population 200,000 10.7m Expand 5G pilot to enhance £40,000 10.7 million tourists 150,000 visit each year 8digital connectivity for all businesses including marine Productivity per worker) (GVA 100,000 Exeter Brighton & Hove engineering sector based in £35,000 50,000

0 Repurpose vacant retail Bristol BCP Brighton Southampton Portsmouth Exeter for other uses to increase Cardiff £30,000 5G 9 & Hove £0 £5,000 £10,000 £15,000 £20,000 £25,000 £30,000 footfall Fastest broadband in country and Selected comparable local authority districts GVA (£m) Jobs Source Oxford Economics a 5G testbed invest in key public 10realm improvements to 100,000 200,000 300,000 revitalise core shopping areas BCP will be able to take a more strategic approach to the planning and growth of the urban area Source Oxford Economics, comparison of 41 UK cities excluding London

2 3 Market strengths Market strengths

What does BCP have to offer? The area Key features in Bournemouth, Christchurch and Poole Bournemouth, Christchurch and Poole have a lot of appeal. Located on the south Average house prices (July 2018) coast, between the Jurassic Coast to the ■ Below £200,000 west and to the east, the 12 ■ £200,000 - £400,000 miles of sandy beaches attract over 10 ■ £400,000 - £600,000 million tourists a year and support the ■ £600,000 - £800,000 employment of over 12,000 people. A31 ■ Over £800,000 New Forest ■ Green Belt

A338 Ferndown ■ Environmental Designations Silicon beach Wimborne Minster ■ Flood Risk Area BCP’s strengths extend far beyond tourism. University Campuses BCP has high employment, the 10th highest Rail stations number of businesses per person of all UK Rail tracks towns and cities and the fourth highest A roads BCP boundary concentration of digital and creative Borough boundary industries in the UK outside of London giving it the nickname ‘Silicon beach’. It is also the first 5G test bed in the UK.

Key assets BCP also has an airport, currently serving European destinations, which has a runway Kinson long enough to operate jumbo jets. There are also two universities: Bournemouth University, renowned for its media courses and Arts University Bournemouth, with over 23,500 students Bournemouth Christchurch between them. With AFC Bournemouth in the Premier League, Bournemouth, and the Poole surrounding area, has become increasingly known internationally.

Business centre Parkstone There are twice as many finance and insurance companies per person than Boscombe average for the UK with over 900 financial services businesses (including JP Morgan) and 250 head office operations. The Aviation Business Park, at Bournemouth International Airport, hosts national and international companies, especially those Poole specialising in aerospace engineering Town Centre AFC Bournemouth and defence. Marine manufacturing Poole Lansdowne Stadium Christchurch and engineering companies, including Port 5G Pilot Town Centre Sunseeker, and the headquarters for the Bournemouth RNLI, are based in Poole which has the Purbeck Castle Point Town Centre second largest natural harbour in the world. Canford Cliffs Shopping Centre Choice place to live The appeal of the area makes it an Sandbanks Airport and Aviation attractive choice for retirees and second Business Park home owners. BCP has the highest proportion of over 65s in any UK city. As a result house prices in the highest value Poole Harbour has a high proportion of marine Bournemouth has a high proportion Christchurch has a high areas, Sandbanks and Canford Cliffs, are engineering and manufacturing companies of finance and insurance companies proportion of small tech companies 3.4 times the national average at £950,000. Source HM Land Registry 4 5 Market overview Sector growth

Challenges facing BCP 2,160 Number of homes Number of homes being Despite its strengths, BCP has challenges including transport, needed per year in BCP built per year in BCP productivity and housing provision

Infrastructure There are a limited number of health relatively low levels of investment and Travelling across the urban area by innovation companies in the area and struggled to grow in the way it did in What does the area need and car is slow and congested, and there investment into providing space for the 70s and 80s when it attracted major are limited connections to the north similar companies could help build financial companies to the area. and west. Rail links make it possible this into a USP, particularly given the how should it be growing? to travel from Christchurch to Poole strengths of Bournemouth University in Housing provision In order to grow into a thriving city BCP needs to meet the existing more quickly, taking 20 minutes, albeit the health and social sciences sector. At a headline level, housing is relatively demand and create space for growth across the different sectors services only go every half an hour and BCP generates a lower proportion unaffordable in BCP. House prices are locations away from stations remain of economic output from information 9, 10 and 12 times average earnings in less accessible. London is nearly 2 hours and communication and professional, Bournemouth, Poole and Christchurch Investment in infrastructure is needed to from Bournemouth via train with trains scientific and tech than the UK. However, respectively compared to the national improve connectivity across the urban area running every hour putting the capital these two sectors are forecast to grow average of 8. Theoretically, someone and to the north, east and west, including key beyond a daily commute. Improving the the most in BCP over the next ten years. earning the average wage in BCP could cities of London, Bristol and Southampton. transport infrastructure will be vital to Building on the new university teaching afford a home up to £160,000 with a 25% Infrastructure improvements could include enabling growth in the area. facilities, investment in the right space deposit. This only covers 15% of stock in schemes such as putting on new faster bus and support will be needed to ensure the area. routes with smart ticketing and timetabling Productivity they have the ability to grow. There is a wide disparity in affluence apps, some form of rapid light transit system, Productivity in BCP is significantly Bournemouth retains 22% of its across BCP with areas in both the top a new link road from Poole to the A31 and below that of Bristol and Southampton. graduates, just below the 28% average and bottom percentiles in the country. improving rail connectivity. The retail and tourist industries are across 43 University towns and cities This is reflected in the range of house Strategic infrastructure improvements major employment sectors but both monitored by Centre for Cities. However, prices in the area. The interquartile such as these can be achieved with greater have low productivity. Many work in the it struggles to attract graduates from range (middle 50%) of house prices in influence and funding and will open up low paid health and social care sector other places ranking 42nd out of 63 BCP is 14% wider than that for Bristol new areas in BCP for residential and which despite employing 15% of workers, towns and cities for net gain of graduates and 60% wider than in Southampton. commercial development. generates only 11% of BCP’s economic each year. Therefore, the new unitary authority We have examined the needs within the output (GVA). In comparison, Bristol and will need to deliver many more homes three key property sectors identifying where But the large and growing health and Southampton are much better at affordable to locals, across a range of there are growth opportunities as a result of social care sector supporting BCP’s older attracting graduates and rank 4th and tenures. Overcoming these challenges the combined authority. population provides a great opportunity 16th respectively. As well as struggling will be a key factor in transforming these Homes to test innovative health care solutions. to attract graduates, BCP has had three boroughs into one thriving city. There has been an undersupply of on brownfield land where costs are housing in BCP over the last twenty high and by smaller sites which do Economic output Proportion of GVA in BCP compared to the UK years, partly due to the constraints not require it. However, supported by 5% of the sea, heath land and tight Green the new local authority framework, Belt. Between them BCP are building the LEP aim to secure a government Information and communication 1,300 homes per year. This is 38% affordable housing deal worth £215 below the government’s published million for Dorset. Professional, scientific and tech Take the train standard assessment of housing need Private renting is more common Improving rail services can increase Manufacturing of 2,160 homes per year, which takes in BCP than the national average: frequency and capacity of trains market signals into consideration. 31% of households in Bournemouth and also increase values around Administrative and support stations. Our research shows that, The new unitary authority will need and 23% of households in BCP rent Wholesale and retail trade on average, house price growth has to produce a new Local Plan which privately (22,000 households) been 5% higher around stations is likely to use the current MHCLG compared to 18% nationally. Construction than neighbouring areas where published standard assessment of Between 2001 and 2011, 78% more there have been greater passenger housing need figures based on 2014 households in BCP privately rent. With Arts, entertainment and recreation numbers (see Savills New Homes household projections. The ambition affordability pressures and a large Market in Minutes Feb 2018). to grow employment in the area also and growing private rented sector, Accommodation and food service Additionally, some of the strongest office rental uplift in Birmingham means that the housing need would there is the opportunity to build more Human health and social work is for refurbished schemes in close be higher than this. homes for private rent to help meet the proximity to the recently upgraded Only 7% of the additional homes local need. One Build to Rent scheme Financial and insurance New Street Station (see Savills built in BCP in 2016/17 were sub- is under construction and another Birmingham Office Market Watch -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% 6% market homes. The provision of recently completed in Bournemouth. May 2018). Percentage point difference in BCP and UK GVA sub market housing has been These are adding 266 new rental homes constrained by focus of development and leading the way in the sector. Source Oxford Economics

6 7 Sector growth Sector growth

Growth areas Key constraints and areas for growth in BCP

New Forest

5G and superfast broadband 5G in Lansdowne, offers a unique Appropriate Green offering to companies. Belt release required to meet housing need

In Bournemouth the town centre has been the Areas for homes focus of large-scale residential development Canford through the Bournemouth Town Centre Best practice across BCP Heath Action Plan. This has in part been driven by can be brought together to 46,000 sq ft Christchurch the Bournemouth Development Company, provide the homes needed 46,000 sq ft of new office space was completed at a public-private partnership between . across the area the Lansdowne in 2018 Bournemouth Borough Council and Morgan Bournemouth Sindall Investments Ltd, who have focussed on Brownfield sites redeveloping car parks. Land for up to 11,000 homes has been Poole This reflects a wider pattern in Bournemouth identified on the brownfield sites across Workspace of residential development through change Bournemouth, Christchurch and Poole of use and conversion: over 40% of the supply by the National Housing Federation. BCP has the opportunity to build in Bournemouth in the last year has been However, many of these sites will on its existing employment strengths Lansdowne provided this way. But there is a limited supply be challenging to develop due to as well as the digital infrastructure and Poole Harbour: 36,000 sqm Wessex Fields of employment space is of buildings for conversion to residential and remediation costs and significant grant growing tech scene. But the right kind planned for the area Heathland within SSSI (No therefore alternative sites will be required to funding will be needed to unlock them. of space and support will be needed homes can be built within 400m A proposed country park along of the heath but other adjacent meet the need. The Bournemouth Development to do so. The challenge for BCP is to Purbeck the Stour Valley crossing the development possible) Bournemouth and Christchurch In Poole, there is potential for significant Company has the opportunity to expand ensure that it provides enough top Talbot Digital Village is boundary would provide quality public open green space. residential development on brownfield sites its remit of redeveloping suitable car quality floorspace to attract occupiers. Land for 11,000 homes on on the border of Poole as part of the town centre regeneration. parks in Bournemouth to Poole and With flat rents and rising build costs brownfield sites have been and Bournemouth identified in BCP Airport and Aviation Infrastructure improvements, such as the Christchurch. restricting viability, there has been Business Park Twin Sails Bridge and the recent £23.3 million Building on brownfield sites will go limited new office stock provided in BCP transport improvements for accessing the Port some of the way to providing the homes over the last 25 years. ■ ■ ■ Flood Risk Zone Source Savills Research of Poole, have been positive steps to enabling needed across the area. In 2018, 46,000 sq ft of new office Built-up area SSSIs Rail stations BCP boundary ■ Green Belt ■ Other Environmental Designations A roads Rail tracks Borough boundary development, however viability remains a space was completed at the Lansdowne barrier to building even with the authority Green belt release as part of the requirements building accepting 10% affordable housing on town Strategic Green Belt release in the most student accommodation. This space was We identify three key locations for workspace growth as a result of the merging of the three authorities: centre schemes. While Poole propose releasing appropriate areas in BCP will be required successfully let to a tech company prior 1,300 homes in the Green Belt in their draft to meet the local housing need and to completion showing that new office 1. Talbot Village 2. Airport 3. Poole Harbour Local Plan, unlocking brownfield sites will be increase supply to make homes more space is in demand. The digital village at Talbot Heath, The business park at the airport is home There is a concentration of marine engineering critical to meeting housing need. affordable to locals. The Lansdowne area is being developed adjacent to both universities, is ideally located to several major aviation engineering companies companies at Poole Harbour and 36,000 sqm Christchurch is constrained by flood It will also be able to provide more into a ’world class’ business district to accommodate the type of space needed by the and a host of other occupiers. With greater of employment space is planned as part of risk area and 53% of the homes built in the affordable housing that the town centre supported by £8.5m of government tech/media/creative sector. It is also well placed capacity at the airport, several development regeneration of the area. Unlike other locations five years to 2016/17 have been through schemes have struggled to do. Green grants. Several sites from the railway to capture the talent generated at the universities sites and an existing business community it in the South Coast Marine Cluster it has no redevelopment of the urban area. Brownfield Belt release for development sites has station to the Lansdowne and St and retain graduates. BCP will need to work with provides the opportunity and space to grow and Research and Development facilities. With 86% land has been identified for the delivery of been proposed in Poole’s draft Local Plan Swithun’s roundabouts have been the universities, landowners and LEP to provide attract more, similar businesses. The recent of the South Coast Marine Cluster companies more new homes, particularly in Christchurch and this strategy needs to be replicated earmarked for offices, residential and incubator space and to encourage and support change in ownership promises revitalisation. expecting to expand in the next year, Poole Town Centre and in Highcliffe. Christchurch across the rest of the combined area. student housing to transform this area. spin off start-up companies to develop this sector Improvements to the road network have helped will need to stand out to attract this growth. also proposes releasing land in the Green Belt The proposed Stour Valley Country Student housing and academic space to its full potential. Bristol and Southampton to make the area more connected although If the 5G testbed at the Lansdowne in to meet the local need. Park could be delivered alongside these has dominated development at the are examples where the universities have more needs to be done to allow it to reach its Bournemouth could be extended across the new development sites which would Lansdowne to date but 5G and superfast worked with SetSquare (a partnership funded full potential. Having one unitary authority BCP area as a result of the merger, this combined create better quality publicly accessible broadband in the area is a unique by the Higher Education Innovation Fund) to will make it easier to deliver a coherent strategy with the superfast broadband available could be open space. offering to companies. commercialise their work. In the case of Bristol to link the airport (in Christchurch) with a strong draw for new marine engineering and New infrastructure including schools More schemes will need to be built in this has meant setting up an award-winning Wessex Fields (in Bournemouth) and the key R&D companies. Branding itself as somewhere 62% and medical centres provided as part conjunction with other uses as well as incubator space for 80 start-ups. With borough commercial centres. This will help meet the with the best digital infrastructure will also help of the homes needed of large scale development would more private and public partnerships to boundaries removed, the Talbot Campus is a LEP’s aims to use the airport and Wessex fields improve the perception of the area and attract in BCP area being serve the wider community as well as ensure the area receives the new office great opportunity for growth at the centre of the to drive economic growth. new businesses. built each year new residents. development it needs. new BCP unitary authority.

8 9 Sector growth Summary

Repurposing Retail We assess that there is enough In addition, there are opportunities to retail space within BCP to meet redevelop excess or marginalised retail Making new areas within BCP more accessible the local need. Mature high street space through alternative town centre will unlock new development sites retail supply is focused around the uses. This could include residential, three principal town centres, as office/workspace, social/amenity, well as Boscombe town centre and civic/community, or leisure. The Castlepoint shopping centre. There is implications of an ambitious forward also a strong presence of out of town thinking and targeted approach to retail parks, extensive supermarket enhancing the town centre ultimately Key conclusions provision and several large parades can have a positive impact on footfall, throughout the wider conurbation. vitality, social integration and student housing Development in Bournemouth However, there are issues strengthen the demand for the retail town centre has been focused on surrounding the quality of supply and leisure space. student accommodation over the for Urban Dorset and in particular the amount of Focusing on enhancing key last five years. There are currently redundant floorspace. Therefore, retail areas with investment in 5,700 purpose build student beds in offering an opportunity for some public realm will help drive footfall Bournemouth for the 23,500 student Opportunities will be created when the three boroughs combine retail space to be re-purposed. and uplift retail areas but this population, sufficient to house 31% of There is a significant opportunity should be concentrating on the core full time students. An additional 2,100 beds are in the development pipeline. from the merging of the boroughs retail areas rather than expanding Once these extra beds have been Greater influence Stronger business offering to create a more co-ordinated them. Investment in developing the completed, there will be enough beds Combining to become one new unitary authority The area needs to enhance its offering for existing strategy to recognise what is unique cinema complex in Poole is hoped to accommodate 42% of full time will give Bournemouth, Christchurch and Poole businesses and to attract new ones. It currently or beneficial with each of the main to boost the local area enhancing students in the town. more influence with Government and give it a has the fastest broadband in the country and the retail centres complementing each the public realm as well as providing greater chance of attracting significant funding first test bed for 5G in partnership with OS at the other rather than competing. better amenities. through Public Sector Growth Deals and the Lansdowne. By capitalising on its digital assets private sector. and pioneering 5G across all the key business districts it will set itself apart. Retail vacancy Above the UK average Public-private partnership is key and working with the universities to create incubator space 20% 5,700 Improving infrastructure at Talbot Village will support the growth of the tech sector. A coherent strategy for raising the Purpose build student Spending more on infrastructure will mean beds in Bournemouth road and rail links across the urban area can be profile of the area and improving digital and improved, as well as links to Exeter and Bristol transport infrastructure across the urban area to the west and Southampton and London to the will also help to grow the aviation and marine east. Reducing journey times and making new engineering sectors. 15% areas within BCP more accessible will unlock new development sites and support higher values 31% around stations. Sufficient to house Repurposing retail 31% of full time students Vacant retail space should be repurposed to other uses to enhance the town centres. There is 10% enough retail space to meet the local need but Housebuilding boost above average vacant space in Bournemouth and Urban Dorset will need a new Local Plan, where Poole particularly. Improving the public realm in the housing need is likely to be 2,160 homes per the core retail areas, repurposing empty shops Retail vacancy rate vacancy Retail 2,100 year. Only half that number are currently being Beds are in the and strategically considering how the different development pipeline built. Due the tight natural constraints of the sea, town centres can complement each other will heath and floodplain, both brownfield sites in the 5% strengthen the demand for what is already there. urban area and Green Belt development will be needed to meet this growing need. A range of types and tenures of homes are needed.

42% 0% This will accommodate Poole Bournemouth UK Christchurch 42% of full time students

Source Savills Research 10 11 Savills Research We’re a dedicated team with an unrivalled reputation for producing well-informed and accurate analysis, research and commentary across all sectors of the UK property market.

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