Shlaa Sites Valuation Study As Part of Evidence Base
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1 SHLAA SITES VALUATION STUDY AS PART OF EVIDENCE BASE FOR AND ON BEHALF OF STOKE ON TRENT CITY COUNCIL & NEWCASTLE UNDER LYME BOROUGH COUNCIL REPORT PREPARED BY heb CHARTERED SURVEYORS Apex Business Park NOTTINGHAM NG11 7DD Royal Institution of Chartered Surveyors Registered Valuers 29 June 2016 1 2 CONTENTS Page No Terms of Reference 3 The Evidence Base 4 Stoke on Trent City Council & Newcastle under Lyme Borough Council 5 Local Property Market Overview 6 Procedure & Methodology 7 Comparable Evidence 8 Basis of Valuation 8 Residential Sub-Markets 8 Sector Specific Valuation Commentary 9 Limitation of Liability 11 Appendices Appendix 1 - Residential Sub Market Map 12 Appendix 2 - Indicative Residential Values 13 Appendix 3 - Additional Residential Valuation Data Evidence 14 3 TERMS OF REFERENCE As part of our instruction to provide valuation advice and viability consultancy to Stoke on Trent City Council & Newcastle under Lyme Borough Council in respect of SHLAA sites viability testing, we are instructed to prepare a report identifying typical land and property values for geographical locations within each Authority. Valuations are to reflect ‘new build’ accommodation and test categories have been broken down into land use types reflecting the broad divisions of the use classes order necessary to allow whole plan viability testing, namely: 1) Residential (C3 houses) 2) Residential (C3 apartments) 3) Industrial (B1, B/C, B2, B8) – Land to reflect brown field tests 4) Agricultural land (to reflect green field tests) Once appropriate levels of value evidence was identified and analysed, it has been utilised to identify appropriate sub-markets in which broadly similar levels of values can be grouped. 3 4 THE EVIDENCE BASE The purpose of this report is to provide a bespoke valuation Evidence Base, specifically for SHLAA sites viability testing for Stoke on Trent City Council & Newcastle under Lyme Borough. Whilst it is possible to assemble an evidence base from many different (and in some instances existing) information sources, we believe there is an inherent danger in this approach. The underlying assumptions for valuation or costs assessment in each data source may be different and a ‘mix and match’ approach may be flawed when comparable evidence is scrutinised. We consider our approach herein to be far reaching and sufficiently robust to be defensible at Examination (as evidenced by previous Inspector approval elsewhere). The valuation evidence obtained to produce this report takes the form of an area wide approach and allows for economic viability of development to be considered as a whole. Valuation methodology has consisted primarily of collecting recent comparable evidence of sales transactions within all of the identified development categories prior to full analysis (more fully outlined under ‘Procedure and Methodology’). Where evidence may be lacking, reasoned valuation assumptions have been taken. The key to our approach is to assess at what value land and property may reasonably come forward rather than simply following a quasi-scientific residual method which may not fully reflect the real world realities of a functioning property market. Where appropriate, residual valuations have been undertaken in addition to incorporate and verify figures. Subsequent to the land and property value evidence assembly, groupings of similar value have emerged in distinct sub-markets across each area. It should be noted that there will inevitably be scope for anomalies to be identified for each zone. The values and zones identified herein provide a fair and reasonable ‘tone’ across each sub-market. 4 5 STOKE ON TRENT CITY COUNCIL Stoke on Trent City Council covers the Stoke on Trent urban area enveloping six formerly separate towns. Today separate centres exist across the urban areas namely Stoke town centre, Hanley, Burslem, Tunstall, Longton and Fenton. Hanley serves as the primary commercial centre. Covering a total area of approximately 36 sq miles (92.74 sq km), there is an estimated population of approximately 249,000 people (2011 Census). The conurbation is the capital of the potteries within Staffordshire and is a significant commercial and industrial centre situated midway between Birmingham and Manchester, alongside the M6 Motorway. London is approximately 160 miles to the south, with rail services to London Euston in approximately 1 hour 45 minutes. Manchester and Birmingham International Airports are approximately 40 miles to the north and 56 miles to the south respectively. NEWCASTLE UNDER LYME BOROUGH COUNCIL Situated immediately to the west of Stoke on Trent, Newcastle Under Lyme Borough encompasses a part urban, part rural area dominated by the market town of Newcastle Under Lyme (itself forming part of the potteries urban area). Covering an area of approximately 82 sq m (211 sq km). The Borough has a population of some 123,900 people (2011 Census). Other settlements within the Borough include Kidsgrove, Loggerheads, Silverdale and Keele (location of Keele University). There are benefits from good communications in most directions, being situated at the junction of the A50 / A51 and A53 and with the M6 Motorway running through the centre of the Borough in a north south direction. Outside of the urbanised centre of Newcastle Under Lyme itself, a much more rural landscape exists, particularly to the west of the M6. 5 6 LOCAL PROPERTY MARKET OVERVIEW Across the two Authorities, the majority of population and commercial activity is located within the urban areas of Stoke on Trent and Newcastle Under Lyme, thereafter in the more rural settlements. Stoke on Trent is a predominantly urbanised area. Newcastle Under Lyme has a noticeable East – West spilt in terms of the urban area and commercial activity. Noticeably to the west of the M6 Motorway a rural landscape prevails. The town of Newcastle Under Lyme abuts the Stoke on Trent urban area and to a large extent forms part of a single conurbation. Stoke on Trent is a polycentric city, having recently been formed from an amalgamation of a number of separate towns namely Stoke, Hanley, Burslam, Tunstall, Longton and Fenton. Today Hanley acts as the defacto city centre, although the polycentric nature of the urban area results in an even spread of commercial values across the geographical area. Across both Authorities, the commercial property market can be broadly categorised into two sections - urban and rural. We can confirm that our evidence research has largely confirmed these expected findings. Generally speaking demand for commercial properties is located within the urban area (predominantly Stoke on Trent and Newcastle Under Lyme town), with only limited demand within rural locations. Broadly speaking the more rural areas tend to have the higher residential values, with lower values contained within the urban areas. Inevitably certain anomalies exist outside these parameters. An example of this would be the relatively sought after suburb of Trentham to the south of Stoke on Trent. The area as a whole is generally well served by the national road network, with the M6 Motorway traditionally acting as a catalyst for commercial development typically in the warehousing sector (though less so post ‘credit crunch’). The study area has pockets of deprivation and high unemployment, in part due to a decline in manufacturing industries since the 1980’s. The commercial property market remains subdued (in line with much of the Midlands region as a whole), with negligible new build and speculative commercial development occurring within the study area. House prices have remained virtually static in the last 12 months (to May 2016). 6 7 PROCEDURE & METHODOLOGY Our residential sales values are based upon actual market comparable evidence. Members of our professional team have made a number of visits to appropriate locations within the study area to back up our extensive desktop research. For the purposes of this report we have identified, assembled and fully analysed substantial amounts of individual comparable market evidence. Clearly it would be impractical to tabulate and include every piece of evidence within this report however we will be happy to provide more detailed evidence on any aspect of our comparable database upon request. As well as our desktop and field research, we have carried out interviews with commercial and residential property agents, house builders and developers active within the study area, both in terms of collecting further market evidence but also to establish general ‘market sentiment’. All of the above information has been analysed, considered then distilled into the tabulated figures appended to this report. It should be borne in mind that as with any study where artificial boundaries are imposed, certain anomalies may arise. There is inevitably a limit to the scale with which this study and allocated zones can be reduced to, and accordingly it is entirely feasible that certain ‘hot’ or ‘cold’ spots may exist above or below the overall tone for each zone. Similarly within each specific zone an individual building or piece of evidence could fall outside the ‘tone’. Further sources of information for comparable evidence has been sought from a variety of data points including:- • Focus System – a nationwide subscription database covering property issues • EGI – a further subscription database covering commercial property uses • heb’s own residential and commercial database of transactions • Land Registry – a internet based database to establish residential