EARL SHILTON AND BARWELL EMPLOYMENT LAND ASSESSMENT PROSPECT LEICESTERSHIRE LIMITED
29 November 2010
Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
Contents 1 Introduction 1 2 Brief and Methodology 3 3 Source for Proposed Distribution of Employment Land to Earl Shilton and Barwell Sustainable Urban Extensions 7 4 National and Regional Trends to the Employment Land Market 16 5 Floor Space and Accommodation Requirements for Users of Distribution, Industrial and Offices Floor Space 22 6 Demand Profile for Hinckley and Bosworth 28 7 Market Appraisal for Earl Shilton and Barwell 42 8 Employment Land Generation from the Sustainable Urban Extensions 50 9 What the Market Will Deliver 54 10 Conclusions and Recommendations 60
Appendices – See Separate Document
Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
1 Introduction
1.1 Purpose
1.1.1 The aim of this study is to assess realistically the level and type of employment land that can be developed to support the proposed Sustainable Urban Extensions (SUEs) to Earl Shilton and Barwell.
1.1.2 This assessment is principally market based. Currently, there is great uncertainty in the property markets. The economy is continuing to restructure and finance for development from both private and public sectors is not being delivered. For these reasons, planning has to be deliverable. Otherwise, regeneration and growth will not be achieved.
1.1.3 This assessment is intended to be robust and to inform the current masterplans for Earl Shilton and Barwell and the emerging Area Action Plan.
1.2 Context
1.2.1 A number of studies, at both county and local level, have considered the issue of employment land. The latest study, undertaken by BE Group, was completed in May 2010. However, this study did not re-examine the specific levels of need previously established for Earl Shilton and Barwell (20 - 25 hectares in total). Instead, this total was identified as part of an employment needs assessment for the wider sub-region undertaken by PACEC on behalf of Leicestershire Economic Partnership in October 2008.
1.2.2 Subsequently, it has been determined that further assessment, at a more local level, is required to establish whether there has been any changes in the level of need to the Adopted Core Strategy figure of 25 hectares across the SUEs, which reflected the PACEC Study.
1.2.3 Specifically, consideration is to be given to the make-up and delivery of employment premises required to support the overall development of the SUEs and the implications in terms of land take.
1.2.4 The Core Strategy requires HBBC to allocate two mixed use SUEs to Earl Shilton and Barwell through the preparation of an AAP. To the east of Earl Shilton, it is proposed that land will be allocated principally for 2,000 new homes and 10 hectares of employment land. To the west of Barwell, it is proposed that land will be allocated principally for 2,500 new homes and 15 hectares of employment.
1.2.5 The Core Strategy does not distinguish what land is to be developed for housing and what land is to be developed for employment. Instead, it just denotes the proposed extent of both SUEs. This is shown on the figure below.
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1.2.6 Masterplans have been produced subsequently by Capita Lovejoy of the two SUEs on behalf of the Borough Council. The masterplans for Earl Shilton and Barwell form Appendices 1 and 2 respectively.
1.2.7 The masterplan for Barwell shows two potential locations for employment land:-
Land to the south (10.1 hectares) Land around Carousel Park (4.9 hectares).
1.2.8 Option two to the masterplan shows a reduced employment area to the south of 5.4 hectares.
1.2.9 We have been informed that the choice of location for land around Carousel Park has been driven mainly by the desire to provide a buffer zone to Carousel Park.
1.2.10 For Earl Shilton, three options have been produced. In each case, the principal variant concerns the potential development of the Severn Trent Sewerage Works towards the centre of the site. The availability of this part of the site will not be known until later this month. The resulting employment land take varies between 3.79 hectares to 8.48 hectares, depending on whether the sewerage works is available for development and, if so, whether it is developed for employment or housing.
1.2.11 Housing levels proposed for Earl Shilton are less than originally set out in by the Core Strategy. They range from between 1,415 homes to 1,645 homes.
1.2.12 In all cases, the employment land is situated in the centre of the site with direct frontage and access to the recently constructed A47 Earl Shilton Bypass.
1.2.13 Both SUEs are projected to start development in 2013. The end date for development coincides with the end of the plan period to the Core Strategy (ie 2026).
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2 Brief and Methodology
2.1 Brief
2.1.1 From the Brief, and the inception meeting that followed on 5 October 2010, it is clear that the study is to test critically whether the market will deliver 25 hectares of employment land or whether a more localised approach, concerning a smaller allocation of employment land, will be more appropriate in market terms.
2.1.2 This critical appraisal will ensure that the quantum of employment land required to support and benefit these communities to 2026 reflects their needs. In doing so, this study will take into account existing sites, projected population growth, regeneration, market demands, viability and deliverability.
2.1.3 The principal objectives and aims of the study are set out in Section 4 to the Brief. Paragraph 4.1 states that the principal objective is to carry out a comprehensive assessment of employment land need for Earl Shilton and Barwell to 2026, taking into account existing provision and the level of anticipated growth through the SUEs.
2.1.4 Paragraph 4.2 of the Brief is more specific. The assessment needs to set out what is needed in employment land terms. Reference is made to:-
amount and scale; type/use class; market need; and location.
2.1.5 In addition, consideration is to be given to:-
Viability; likely timescales for delivery; and what actions can be taken to improve the prospects of delivery.
2.1.6 Paragraph 4.3 to the Brief sets out the key aims to the study. These can be summarised as:-
assessment of all current and future B class employment need/take up rates; identification and justification of employment needs, opportunities and the amount of additional employment land that will be appropriate; consider specifically the potential of B1 offices uses; and identify opportunities for linking future employment areas to the existing town centres.
2.2 Approach
2.2.1 The approach taken with the study has been four-pronged. These can be summarised as:-
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market led; research based; consultative; and analytical.
2.2.2 The methodology with each prong of the approach is considered below:-
2.3 Methodology
2.3.1 Section 3 of this study provides a review of previous studies undertaken. We refer principally to the Leicester and Leicestershire HMA Employment Land Study produced by PACEC on behalf of the Leicester Economic Partnership in October 2008. This study is considered to be the principal source for the distribution of 25 hectares of employment land to the two SUEs serving Earl Shilton and Barwell. The basis employed by the authors of this study, in recommending such a distribution, and its relevance given current economic conditions, is re-assessed.
2.3.2 Sections 4 and 5 of the study give an overview in terms of demand and provide a basis for the remainder of the report that considers supply and demand at a more local level. The principal elements to this overview are:-
national trends in the principal markets (including new or emerging sectors); regional trends, with reference to separate markets for industry, distribution and offices; other trends affecting demand for employment land; financing of development post credit crunch; and operators’ requirements - a changing world.
2.3.3 For this section, we have relied upon our own property expertise and knowledge of the principal markets. This has included reference to property research the company undertakes, such as the King Sturge Industrial and Distribution Floor Space Today Survey.
2.3.4 Section 6 provides a profile of the demand and supply of offices, industry and distribution floor space in the Borough of Hinckley and Bosworth, with particular reference to the built up area of Hinckley and Burbage given its proximity and relationship to Earl Shilton and Barwell. Consideration has been given to:-
local economic overview; stock of employment premises; vacancy levels; development activity; supply of development land; rents, prices and yields and other issues affecting viability; and enquiries.
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2.3.5 Section 7 provides a market appraisal for Earl Shilton and Barwell. This provides an assessment of many of the factors considered in Section 6 and includes a SWOT analysis. It considers the employment basis for the two settlements, their principal characteristics (including communications) and their relationship with Hinckley and Burbage and the surrounding area, including Leicester.
2.3.6 Section 7 provides a description of the pitch that Earl Shilton and Barwell can offer for industry, distribution and offices. In addition, consideration is given to the effect development of employment land will have on existing employment areas within Earl Shilton and Barwell.
2.3.7 We have undertaken detailed research of the local markets to inform Sections 6 and 7. This has included information provided by the Borough Council (eg Annual Monitoring Reports, Employment Land Availability schedules and the current Economic Regeneration Strategy). We have referenced relevant market data contained in the May 2010 BE Group Employment Land Study. This has been augmented by our own knowledge of the local market and consultations with local agents. In addition, we have interviewed the Economic Development Officer at the Borough Council.
2.3.8 In addition, to inform our market critique, we have undertaken some soft market testing of the general location and the likely sites that will come forward for employment uses. This soft market testing has included consultation with developers that are active in the area.
2.3.9 Section 8 reviews the draft study produced by Experian for Prospect Leicestershire in March 2010. This study is entitled Sustainable Urban Extensions - housing and employment land study.
2.3.10 This study is intended to be read alongside the October 2008 PACEC study, but comes to more specific conclusions about the level of employment land that is likely to be generated by the increase in population to Earl Shilton and Barwell through development of the SUEs.
2.3.11 Section 9 summaries our analysis with specific reference to Sections 6, 7 and 8. Specifically, we consider and conclude upon:-
quantum of development for each SUE; quality (by type - ie offices, industry, distribution and other uses); location; specification; delivery; and values.
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2.4 Reporting
2.4.1 An initial view on the level, quality, location and delivery of employment land for each SUE was given by email of 19 October 2010. This was to inform land use budgets for the two SUEs in order to progress the masterplans.
2.4.2 A draft report was produced and submitted for consideration on 5 November 2010. This draft report was then considered by the Study Steering Group at a meeting on 9 November 2010.
2.4.3 A full and final draft report was then produced on 11 November 2010 with its findings presented to the Developer and Landowner forums for Earl Shilton and Barwell on the same day.
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3 Source for Proposed Distribution of Employment Land to Earl Shilton and Barwell Sustainable Urban Extensions
3.1 Introduction
3.1.1 This section reviews the basis of the proposed distribution of 25 hectares of employment land to support the SUEs to Earl Shilton and Barwell. Specifically, consideration is given to the Core Strategy and the Leicester and Leicestershire HMA Employment Land Study. The latter was considered by the brief for this assessment to be the principal source for the distribution of 25 hectares to Earl Shilton and Barwell.
3.2 Core Strategy
3.2.1 The Core Strategy was adopted by the Borough Council in December 2009. It provides a template for future development up to 2026.
3.2.2 The Core Strategy contains 13 spatial objectives. The first two concern the economy. The first spatial objective is for a strong and diverse economy. It aims to do this providing sufficient, sustainably located, good quality land and premises and other support programmes. It notes that the focus for new employment will be the main urban area of Hinckley (including Burbage), reflecting its status as a sub regional centre, and in Earl Shilton and Barwell to support the regeneration of these two areas.
3.2.3 The spatial strategy is set out in Section 4 to the Core Strategy. This identifies that 9,000 new houses needs to be provided in the plan period from 2006 to 2026. According to Paragraph 4.6, to support this increase in housing, there is also a need to provide additional employment land of the right type and in the right location.
3.2.4 Paragraph 4.7 explains how much employment land is to be allocated and where it is to be located. This makes reference for a need to allocate 6 hectares (34,000 m²) for office use, 4 hectares for industrial use and 10 hectares for warehousing. These are to be focused primarily at or adjacent to Hinckley to support its role as a sub regional centre, with small allocations in the key rural centres to support local employment opportunities. In addition, reference is made to the SUEs. The relevant part of Paragraph 4.7 reads:-
"... to ensure the Sustainable Urban Extensions at Earl Shilton and Barwell are indeed sustainable, there is a need to allocate a further 20 - 25 ha of employment land to support the population in these new communities (Leicester and Leicestershire HMA Employment Land Study 2008)."
3.2.5 This Employment Land Study, that is directly referenced, is reviewed below in Section 3.3.
3.2.6 Policy 2 and Policy 3 concern development in Earl Shilton and Barwell respectively. A preamble to these policies is contained in Paragraphs 4.18 to 4.20. In Paragraph 4.18, it is noted that Earl Shilton and Barwell contain pockets of significant deprivation and their local centres are in need
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of regeneration. To support this regeneration, and to reinvigorate these important urban areas, two mixed use SUEs will be developed.
3.2.7 In Paragraph 4.19, it is noted that the SUEs will be exemplars of sustainable design. These will include high quality employment provision to allow residents to work close to home should they choose to do so.
3.2.8 In Paragraph 4.20, it is noted that the SUEs will act as a catalyst for the regeneration of Barwell and Earl Shilton.
3.2.9 Policy 2 confirms that 10 hectares of employment land will be allocated to the Earl Shilton SUE. Policy 3 confirms that 15 hectares of employment land will be allocated as part of the SUE to Barwell. In both case, the policies state that:-
"The employment allocations are to provide for industrial and warehousing developments. They should primarily support local employment opportunities, including starter and grow-on units, and should aim to achieve zero carbon development."
3.3 Leicester and Leicestershire HMA Employment Land Study
3.3.1 This report was prepared by PACEC with the support of Warwick Business Management Limited, on behalf of Leicestershire Economic Partnership. The report was produced in October 2008.
3.3.2 The brief sets out the need for:-
joint employment land, planning and delivery up to 2026; employment land policies and allocations through LDFs; and investment priorities and targets for Local Area Agreements and the Multi Area Agreement.
3.3.3 The methodology requires a number of different actions. These include:-
a review of existing supply of employment land and premises; a review and critique of the supply and demand forecast for employment land; the production of alternative supply and demand scenarios; an estimation of the gap between supply and demand; a review of potential employment land and locations; and advice on delivery of employment land.
3.3.4 Section 2 sets out the policy context for the Employment Land Study. This concludes that three dominant policies create the policy lens through which the employment land review has been undertaken. These are:-
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"a) the market: to identify an adequate supply of sites that are the right quality in the right places, at the right time to meet employment forecasts and safeguard and protect these sites from competition from other uses particularly housing;
b) sustainable development and climate change: to reduce the carbon emissions arising from development - through new construction standards and renewable energy generation - and transport - through aligning homes with jobs and services and making the fullest possible use of sustainable modes of transport;
c) local distinctiveness: to create a prosperous, enterprising and dynamic economy, characterised by innovative business and creative people with a new pattern of growth in the New Business Quarter and Sustainable Urban Extensions creating sustainable communities in an attractive environment."
3.3.5 This section also includes a commentary on the draft Core Strategies for the various Local Planning Authorities within the study area. This includes Hinckley and Bosworth's Core Strategy Preferred Options document, that had been published by the time the study was written. The study notes that the Core Strategy Preferred Options suggests that the two SUEs adjacent to Barwell and Earl Shilton should incorporate high quality employment provision to give residents the option of working close to home.
3.3.6 It notes further that the Core Strategy Preferred Options paper advocates that employment should be encouraged around the urban areas of Hinckley (including Burbage), Earl Shilton and Barwell. In particular, it notes that a 25 hectare strategic employment site is encouraged either along the A5 corridor for the national distribution market or adjacent to the Earl Shilton Bypass, as part of the SUE. If the 25 hectare site did not form part of the Earl Shilton SUE, then the Core Strategy Preferred Options recommended a 10 hectare site as part of this SUE. Local employment is also to be encouraged through an additional 2 hectare site serving Earl Shilton, plus small business space for start ups and social enterprises, and a further 15 hectares to serve the Barwell SUE.
3.3.7 It is noted that these Preferred Options would be reviewed through an employment land study undertaken for the Borough of Hinckley and Bosworth. The findings would then be considered through the Site Allocations Development Plan Document Submission Draft.
3.3.8 Section 3 of the study considers the economic and property market context. Changes in the office, industrial and warehouse employment in Hinckley and Bosworth, between 1991 and 2006, are represented in Figure 3.6. This figure is reproduced below:-
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3.3.9 This shows that industrial employment in Hinckley and Bosworth peaked sharply in 1996 and then declined steeply, before stabilising in recent years. Office employment had expanded modestly and warehousing had only shown a slight increase that has since reversed since 2003.
3.3.10 Compared to other local planning authorities, it is clear that employment growth in both offices and warehousing had been modest.
3.3.11 Table 3.1 provides information on commuting flows as at 2001 - the last time the Census was collected. Hinckley and Bosworth has 23,900 out commuters and 15,400 in commuters. This is a net balance of minus 8,600. Within the HMA, the biggest outflow is to the City of Leicester, with 6,800 commuters. The next biggest is Blaby, with 3,200. The highest level of in commuters comes from Blaby, with 2,600. The inflow from the City of Leicester is relatively small, at 1,600. The net outflow at 8,600 is the biggest in the HMA, with the exception of Charnwood.
3.3.12 27,400 live and work in the Borough. This represents 64% of total jobs in the Borough and 53% of total working residents. This represents the third highest level within the HMA in terms of total jobs (Melton and Charnwood are higher). However, 53% represents the third lowest retention rate for total working residents (with only Blaby and Oadby & Wigston lower).
3.3.13 Table 3.2 provides information on the changes of stock of offices, factories and warehousing by Local Planning Authority between 2000 and 2007. It notes that office floor space grew across the HMA by around 171,000 m² between 2000 and 2007. Growth was fastest in Blaby, with 60,000 m² of new office floor space within this period. Growth in Hinckley & Bosworth was far more modest, at 14,000 m² over the same period.
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3.3.13 Industrial floor space declined across the HMA by 56,000 m² between 2000 and 2007. The stock at Hinckley and Bosworth increased by 95,000 m² over this period. This bucked the overall trend and was a complete reversal to that experienced by Leicester City, where there was a reduction of 221,000 m² of floor space over the same period.
3.3.14 The stock of warehousing floor space has increased by over 1.05million m² in the period from 2000 and 2007. Only 26,000 m² of this growth was experienced in Hinckley and Bosworth. Much stronger growth was achieved in Harborough (434,000 m²) and North West Leicestershire (329,000 m²). Growth in warehousing in these areas has been driven by their proximity to the motorways, with particular nodes at Magna Park, Castle Donington and Bardon.
3.3.15 Section 4 to the study summaries employment land studies undertaken by Local Planning Authorities in the various Boroughs and Districts that make up the HMA. For Hinckley and Bosworth, reference is made to the Employment Land and Premises Study produced by BE Group in May 2004. This has since been superseded by the review undertaken by BE Group in May 2010. The main recommendations of the BE Group May 2004 study are to allocate 10 and 25 hectares along the A5 corridor to cater for the local SME and regional and national distribution markets respectively.
3.3.16 Section 5 of the HMA Employment study takes stock of the existing situation. Specific consideration is given to the employment land supply for each Borough or District.
3.3.17 Hinckley and Bosworth is considered to serve two markets. These are:-
a regional market for distribution, with the M69 offering a strong distribution base from which regional businesses can operate; and the local market, with demand coming from local businesses.
3.3.18 Consideration is then given to a number of current sites, with reference to Logix Park, Tungsten Park, Lime Kilns Business Park, and at Interlink in the northern part of the Borough. In addition, reference is made to the MIRA site, that is considered to have the potential to offer space for both Nuneaton and Hinckley based occupiers. However, it cautions that this site requires significant highway works onto the A5 and that the only type of scheme capable of delivering such large scale highway works would be for distribution.
3.3.19 Take up rates are considered in greater detail in Table 6.6 of the study. This compiles data of the amount of land developed from 1991 to 2007 for each Borough or District. In Hinckley and Bosworth, 68.1 hectares has been developed over this 16 year period. This gives an average take up of 4.3 hectares per annum.
3.3.20 The greatest take up was in 1996/1997 when 21.4 hectares was developed. This would have included 16 hectares for the Triumph Motorcycle Factory. Other high years included 1999/2000 (13.1 hectares), 2002/2003 (7.8 hectares) and 2005/2006 (16.3 hectares). These years apart, the general level of take up was less than one hectare per annum.
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3.3.21 On this basis (ie take up rates), there is a projected future requirement of 80.8 hectares in the period from 2007 to 2026. However, the study considers that trend based forecasts, based on past take up rates, are a crude way of estimating floor space requirements, compared to an employment forecasting model. This is because they produce only a gross estimate, taking no account of future changes in industrial structure and changes in policy, and can be exaggerated by one-off large schemes.
3.3.22 The employment forecasting method is complex, involving a number of stages and assumptions. However, it is preferred by the authors of the report. This projects a gross demand of 33,742 m² of office floor space, 16.1 hectares of industrial land and 9.8 hectares of warehousing land in Hinckley and Bosworth in the period from 2007 to 2026.
3.3.23 Table 6.15 matches demand with supply and analyses the gap for Hinckley and Bosworth. This table is reproduced below:-
3.3.24 The difference between supply and effective supply is explained in Tables J1.18 and 19 in the appendices to the Employment Land Study. For ease of reference, these are also reproduced below:-
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3.3.25 Essentially, the principal difference between supply and effective supply for industrial land concerns:-
MIRA, Higham on the Hill - 9 hectares Rear of Jarvis, Coventry Road, Hinckley - 3.7 hectares
3.3.26 Further analysis on the gaps in the portfolio for each Borough and District is provided in Section 7. It notes that the requirement for over 30,000 m² of offices, developed at a plot ratio of 3,000 m² per hectare, would translate into a need for 11 hectares. However, it is considered that this requirement could be met on as little as 6 hectares with a higher development density and fewer onsite car parking spaces. It is suggested that a sequential approach is taken to identifying sites as follows: with Hinckley Town Centre as the preference; then the edge of Hinckley Town Centre; and then adjoining any neighbourhood centre in the proposed SUEs.
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3.3.27 For industrial land, there is a requirement of 16 hectares, but an effective supply only of 12 hectares. This leaves a net requirement for 4 hectares.
3.3.28 With regard to distribution, it is considered that the 20 hectare allocation at Nailstone Colliery could meet the forecast demand for 10 hectares of warehousing land. However, this would prevent competition and limit choice to just one site. On this basis, a further 10 hectares is proposed to provide choice in the warehousing land supply.
3.3.29 Paragraph 7.3.50 makes direct reference to the proposed allocation of land for the SUEs. It reads as follows:-
"Dealing with the future pipeline, it is proposed that a further allocation of 20 - 25 hectares of employment land is identified as part of the proposed SUEs to ensure that there are local employment opportunities for the new residents. This allocation should be brought forward in line with the Adopted Core Strategy, SUE Area Action Plans and support for zero carbon development. The employment allocations with any SUEs should both replenish the development pipeline and provide the zero carbon development after 2019 and beyond the plan period."
3.3.30 No scientific or detailed explanation is provided of why a figure of 20 - 25 hectares would be required to serve the SUEs to Barwell and Earl Shilton. However, reference is made subsequently in Section 7 to a stakeholder workshop where SUEs were considered. In Paragraph 7.6.8, it was noted that the workshop considered that SUEs were identified as the key to the future supply of employment land and could be a focal point for low/zero carbon mixed housing and employment development. Such development was considered to be able to reduce the need to travel and support a modal split dominated by walking, cycling and the use of public transport. Just 25% of all journeys would be undertaken by the car.
3.3.31 In Paragraph 7.6.12 it is reported that stakeholders concluded that the long lead-in times and the need for advance infrastructure and investment would be required to enable private sector investment in SUEs. In this context, there were considered to be a number of factors that would support the case of allocations of at least 20 hectares and, where appropriate, with scope for further expansion. These included:-
"i) economies of scale: the investment case for spreading advance infrastructure costs over a large site;
ii) the development pipeline: the employment land planning imperative to replenish the supply of employment land towards the end of and beyond the plan period; and
iii) the developer, business and investor markets: the market ceases to provide opportunities for developers to meet demand from market segments, business occupiers to move within the same area and institutional property investors to identify comparable rents and capital values."
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3.3.32 SUEs are recommended in five different locations (Hinckley and Bosworth is treated as one location for the purpose of this study). With the exception of the South SUE for Charnwood (where 50 hectares of employment land is recommended), each SUE has a recommended allocation of between 20 and 25 hectares.
3.4 Appraisal
3.4.1 It is clear that no particular analysis or evidence has been undertaken on the particular needs or characteristics of the SUE to serve Earl Shilton and Barwell. Instead, a generic approach has obviously been taken on the basis of the observations of the stakeholders.
3.4.2 As such, the recommended allocation of between 20 and 25 hectares for the SUEs for Earl Shilton has not taken into account the particular market drivers for Hinckley and Bosworth, nor the more local characteristics of demand and supply for employment premises in Earl Shilton and Barwell.
3.4.3 The gap analysis for Hinckley and Bosworth does not support or identify a particular need for significant employment allocations to serve Earl Shilton and Barwell. Instead, it identifies more modest provision of offices, industrial premises and warehousing to serve the wider area and with particular reference to existing land supply.
3.4.4 In addition, the study makes no attempt to calculate what employment is likely from each sustainable urban extension. Instead, it refers merely to an aspiration to align employment and housing as closely as possible to enable zero carbon development.
3.4.5 Sections 6 and 7 of this report consider the particular local market characteristics for the Borough, with particular emphasis on the main urban area of Hinckley (and Burbage) and what level and type of demand is likely to be delivered by the market. Section 8 considers specifically the likely employment land generation from the SUEs.
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4 National and Regional Trends to the Employment Land Market
4.1 National Trends
4.1.1 The extent of available industrial floor space across the UK is at one of its highest level since the depths of the previous recession of 1992 and 1993. This is illustrated by Chart 1: Available Industrial Floor Space in the overview to the latest UK Industrial and Distribution Floorspace Today survey carried out by this Practice (September 2010). This survey is provided in Appendix 3. Chart 1 is reproduced below.
4.1.2 From December 2009 to June 2010 (the last survey period), available industrial floor space has decreased slightly by 0.08%. However, it still totals 23.791 million m² across Britain. The trend shows an overall increase in available floor space stretching back to the year 2000 that is only just starting to show signs of stabilising.
4.1.3 Despite constant and stable growth achieved by the UK economy over the 8 year period to Summer 2008, the level of available industrial floorspace in the UK rose from approximately 14 million m² in 2000 to just over 21.5 million m² in mid 2008. This was an increase of over 50%. Given the then prevailing economic context, this is a striking statistic.
4.1.4 Since June 2008, there has been a noticeable jump from 21.5 million m² to 23.8 million m² in June 2010. This represents a further increase of 2.3 million m² over the previous 2 year period. This demonstrates the effect of the current recession since mid 2008.
4.1.5 The availability of a large (and growing) level of industrial floor space, despite a diminishing stock (because of pressures for alternative development – namely housing), reflects long term structural changes in our economy from manufacturing to services. These structural changes are well documented. However, the extent of the transition, and the implications in terms of property, are less well understood.
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4.1.6 The extent of changes are illustrated by statistics produced by Oxford Economics on employment levels in the principal sectors of the economy in the UK and the East Midlands region. These statistics come from the most recent employment forecasts published by Oxford Economics (August 2010). This survey provides an economic modelling service for both commercial and Government users and is perceived to be one of the most comprehensive and detailed monitors of the UK economy.
4.1.7 These statistics, broken down by sectors, are presented in Table 1.
Table 1 – Employment in the UK by Sector Figures for Employment (000s)
2000 2010 % from 2000 Forecast for % change from to 2010 2020 2010 to 2020
Manufacturing 4,184 2,733 -34.7 2,214 -19.0
Services 22,452 25,302 +12.7 28,145 +11.2
Source: Oxford Economics (August 2010)
4.1.8 Whilst there are regional variations, the decline in manufacturing in the UK from 2000 to 2010, at 34.7%, is dramatic. Similarly, the projected percentage change from 2010 to 2020 of 19% is also significant. Conversely, there are substantial gains in employment in the service sector, both absolutely and relatively.
4.1.9 It would be an over simplification to assume that all this growth will be accommodated within offices and business space premises. A number of service operations are carried out in industrial or distribution type property, whilst some industrial processes are more automated and have a reduced requirement in terms of labour. In addition, much new service employment is accommodated in non-B Class premises, such as retailing, health, education, leisure and hotels. Nevertheless, there will be a corresponding reduction in the demand for industrial buildings for manufacture. This will follow the trend evidenced in my practice’s floorspace study.
4.1.10 Certain locations well connected to the national motorway network have been demanded for new distribution facilities. The growth of new distribution buildings, particularly on large sites, has increasingly become its own market sector. However, the requirement of operators have become more stringent. Large sites (5 ha plus) with good access to the motorway network, and a ready pool of available labour have been demanded. Smaller sites in congested urban areas have not.
4.1.11 Take-up of new large high bay warehouses has reduced noticeably over the last 2/3 years, albeit from a high base of over one million m² a year. The first half of 2010 suggests a recovery in the market from a low point in 2009. The London Research Centre of King Sturge has maintained
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a monitor of all transactions of large high bay warehouses over 10,000 m² since 1995. A graph of take-up in terms of new units and floorspace is presented below in Figure 1.
1.8 90 1.6 80 1.4 70 1.2 60 1.0 50 0.8 40 million sq m sq million 0.6 30 Transactions 0.4 20 0.2 10 0.0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 H1 2010
Floorspace (sq m) No. of Occupier Transactions
Figure 1 - Take up of new distribution in the UK units over 10,000m²
4.1.12 Waste management and recycling is a growing area of activity in the UK economy and in the current market provides one of the main sources of requirements for industrial space and land. We believe this sector is a growing source of demand because of the requirement for new waste management facilities. For example, the Environment Agency has estimated that the UK will need some 2,000 new waste management facilities to meet the EU landfill directive alone.
4.1.13 The requirements of occupiers in the office and business space sector will have stringent requirements as to property location and building design. From research that we have undertaken, it is clear that demand, particularly for large scale premises, is likely to be polarised in established city or town centres and purpose built business parks. This is because these locations can offer the services, facilities and environment required to attract a skilled workforce. This is considered in greater detail in the next section.
4.2 Regional Trends
4.2.1 The availability of industrial floor space in the East Midlands reflects the overall trend in the UK. The chart for the East Midlands for the last 10 years from the September 2010 Industrial & Distribution Floorspace Today Survey is reproduced below.
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4.2.2 The latest survey shows that available floorspace levels rose to a peak of 2.011 million m² in March 2010. This figure has now started to decrease to 1.838 million m² at the end of June 2010, representing an 8.6% decrease (ie by 173,390 m²), which was the largest percentage fall in supply across all GB regions.
4.2.3 Available floorspace in large buildings (ie over 10,000 m²) fell by 20.8% (215,667 m²) over the six month period. Nevertheless, standing stock of large buildings still accounted for 44.7% of total available stock as at June 2010 – the largest proportion recorded across all regions.
4.2.4 The six months to June 2010 saw also a large proportional decrease in new vacant stock of 21.9% (97,205 m²). Generally, it is considered that supply of well located modern space is limited and that sufficient levels of demand exist. The secondary market is more difficult with greater levels of supply.
4.2.5 The fall in speculative floorspace under construction over the last 3-4 years is dramatic. From a high of just under 350,000 m² in January 2006, the end of July 2010 saw a total of just 10,916 m².
4.2.6 Analysis of employment in the region, by Oxford Economics, reflects also the national picture. Statistics from their August 2010 survey are summarised in Table 2 below.
Table 2 – Employment in the East Midlands by Sector Figures for Employment (000s)
2000 2010 % from 2010 Forecast for % change from to 2010 2020 2010 to 2020
Manufacturing 414 393 -5.1 375 -4.6
Services 1,496 1,547 +3.4 1,556 +0.6
Source: Oxford Economics (August 2010)
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4.2.7 The reduction in manufacturing in the East Midlands in the period from 2000 to 2010, at minus 5.1%, is significantly less than that experienced nationally (minus 34.7%). Additionally, the projected change in manufacturing employment from 2009 to 2019, at minus 4.6%, is better than the national average (minus 19%). This is unsurprising. The East Midlands manufacturing economy is arguably less vulnerable than at a national level. It benefits from a strategic location that makes the area attractive to industrial and distribution occupiers. In addition, the region is home to a number of industrial operators (Rolls Royce is an obvious case) that have been unaffected by the recession.
4.2.8 The service sectors in the region (+3.4%) have, however, done worse than the UK (+12.7%). It is also to be noted that the service sector is projected to increase at a much lower level (+0.6%) than the national average (+11.2%). This demonstrated the area’s relative reliance on the industrial and distribution markets.
4.3 Other Trends affecting Demand for Employment Land
4.3.1 As referred to in Paragraph 4.1.9, not all growth in employment will be required to be housed in traditional B Class premises. Research carried out and applied elsewhere (eg the Milton Keynes Employment Land Study, September 2006 GVA Grimley) looks at over a 1/3rd of the workforce being employed in sectors such as retail, health, education and leisure that do not require B Class land.
4.3.2 The importance of these other sectors, in generating sustainable economic growth, has been recently acknowledged by PPS4 – Planning for Sustainable Economic Growth. This planning policy statement, that was issued by Central Government on 29 December 2009, takes a far wider view of what constitutes economic development and countenances, with the exception of town centres, a more constructive and flexible approach to planning control and development management.
4.3.3 A further blurring of the boundaries, and a potential dilution of the level of traditional employment land that needs to be allocated, will be affected by the way we work. Statute now requires a more flexible approach taken by employers. This includes home working. In addition, employers have seen the benefit of a more flexible approach in terms of staff recruitment, retention and motivation.
4.3.4 Overall, according to the office of National Statistics (2005), the UK has over 3 million home workers. This represents 11% of total employed. The East Midlands scored slightly lower, recording 10%. This contrasts with London and the South East (12%) and the South West (at 13%). The East Midlands may suffer slightly in comparison due to the percentage of households with broadband access. According to the ONS (August 2006), 34% of households in the East Midlands have broadband access. This compares with 40% for the UK.
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4.3.5 The Total Office Cost Survey 2009 (12 Edition) produced by Actium Consult considers flexible working. It notes that flexible working is becoming increasingly used to help drive down occupancy costs, increase staff motivation, enhance staff retention and increase productivity. More importantly, it notes that the adoption of flexible working means that no longer does the employer have the expense of providing a work station for each member of staff. A ratio of 5:4 (ie 4 work stations for every 5 staff) are commonly used in Central and Local Government. The corporate sector often uses ratios of 5:3 or higher.
4.3.6 Hot desking and home working need to be a carefully managed process. However, it is evident that if managed and applied successfully, it can reduce the property requirements of companies quite significantly.
4.4 Funding of Development
4.4.1 This phenomena referred to as the Credit Crunch has been well documented. However, its implications on the commercial property market have yet to be fully felt.
4.4.2 After a long period of sustained growth, the commercial property market in the UK, particularly as a holding investment, has retracted quite significantly in the last 2/3 years. Property yields have moved out significantly, without compensationary rental growth, and this has led to a reduction in the overall value of commercial property.
4.4.3 Part of this is due to an overheating of the commercial property investment market. However, wider economic and financial concerns have affected the overall confidence of the market, particularly with lenders and investors. The number of requirements from occupiers is dramatically reduced and there is a surfeit of cheap available premises to choose from.
4.4.4 Put simply, there is far reduced certainty and confidence in the commercial property market. In addition, there is far less liquidity for financing and funding developments. This has, and will, affect the development of commercial property over the next few years.
4.4.5 This has depressed the market for development land and brought about a very cautious approach to speculative development for most commercial uses. In addition, recent changes in legislation on empty industrial building rates has affected the viability of speculative development. Currently, there is a far greater emphasis on pre-lets, pre-sales and design and build.
4.4.6 For these reasons, current market sentiment for virtually all sectors of the employment property market is poor. This will have a lag effect on development over the next few years.
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5 Floor Space and Accommodation Requirements for Users of Distribution, Industrial and Office Floor Space
5.1 Principal Sectors
5.1.1 Demand for property to service the three principal sectors – distribution, industry and offices – is unlikely to be spread evenly across the region. This is because they have different requirements in terms of location, situation, land take and build specification.
5.2 Distribution
5.2.1 The East Midlands has become an important distribution hub for the UK with a number of established distribution centres around Derby, Leicester, Northampton and Nottingham. Distribution functions dominate the industrial market in this location. The area between Northampton, Leicester and Coventry has become known as the ‘Golden Triangle’ due to the ease of national distribution from this location along the UK’s motorway networks.
5.2.2 For the past 15 years, the Golden Triangle has been the dominant location for distribution facilities. This area has fulfilled the three basic criteria or requirements for logistic operators for high bay warehousing. These are:
location (in terms of road access) land labour.
5.2.3 Companies are looking particularly for sites that are close to the motorway, in areas where there is an abundant labour supply with a history of shift working. The “Golden Triangle” is an established pitch for national and regional high bay warehousing due to its centrality in terms of the UK. A large portion of the UK’s population is within a four hours drive time – the yardstick employed by logistic companies.
5.2.4 Quick access to the national motorway network is important. This is not just for saving time, but also for certainty. Just in time logistics needs to be as risk adverse as possible in order to function properly. Congested A roads are to be avoided.
5.2.5 Land that can accommodate large distribution warehouses (i.e. 10,000 m² (100,000ft² plus)), and can operate without any restrictions, is in demand. This requires flat or levelled sites in excess of 5 hectares (12 acres), although much larger sites are often demanded to accommodate properly requirements in excess of 50,000 m² or a number of operators.
5.2.6 Operators require premises or large sites away from housing, with good access to the national motorway or trunk road network. Smaller distribution sites will require these basic elements too, although can be accommodated on more standard industrial estates as long as there are no restrictions on operation (e.g. hours of use), access by HGVs, and a good clear height in the
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buildings can be achieved. Additional features sought are sufficient yard space, docking and circulation.
5.2.7 Over recent years, demand for distribution and industrial warehouses has started to push the Golden Triangle further north, and has lead to increased development activity on the East Midlands M1 corridor. Nottingham was always perceived to be a few junctions too far north. However, a combination of available land, good transport links, labour supply, and changes to the Road Transport Directive, have made the area more attractive for companies seeking national distribution centres.
5.2.8 Access to rail, for the purposes of freight, has become a bigger issue in the last two or three years. Currently, developers and operators are not paying a premium for rail connected sites. In addition, companies who elect to use rail, for the conveyance of freight, do not always have to be located next door to the railway. Instead, good accessibility to an inter-modal rail freight terminal is sufficient. However, as fuel prices and road congestion increases, and less HGV drivers get qualified, there will be greater economic pressure to use rail over road in the long term. This will place sites that are well located to rail freight facilities at a premium.
5.2.9 There is a good supply of consented land along the major strategic East Midlands routes (ie M1 and A1). However, a large proportion is controlled by a relatively few holdings, with two of the prime M1 sites, Castle Wood J28 M1 and EMDC, Castle Donington, being held by Clowes, a regionally based developer, following the recent sale of land by Wilson Bowden. Clowes are not proactively driving this land forward.
5.2.10 In the Leicestershire sub-region, along the M1 motorway corridor, there is a relative paucity of deliverable sites with planning permission compared to other nodal points. For example, no available land with planning permission is being marketed at either Junction 21 or 21A of the M1 motorway.
5.2.11 Headline rents are currently circa £5.25 sq ft for new well located distribution accommodation with incentive packages of circa 12 months rent free for a 5 year lease and circa 18 months for a term of 10 years. A void period of approximately nine months can be expected on a vacant property.
5.2.12 Whilst there has been a downwards pressure on rents and capital values across the industrial/distribution market, due to both the lack of demand and availability of funding, we are starting to see this stabilise as conditions improve and take-up increases. Overall, we consider the prospects for the East Midlands, to capture its share of this market, still remain good. This is principally due to its centrality.
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5.3 Industry
5.3.1 Apart from the continual progression away from heavy manufacturing to lighter industry, trade uses and distribution, we have noted the following trends with standard industrial property in the region:-
occupiers have become more discerning about floorspace requirements in order to make better efficiencies and for staffing reasons; location in terms of access to the national road network and labour have become more important; proximity of industrial units to nearby housing has become a more sensitive issue for environmental reasons (mostly, noise and traffic); and there is still a desire for occupiers to own their premises, particularly for small and medium sized firms.
5.3.2 The specification of industrial buildings has become more reactive to operators’ requirements. New buildings now typically possess:-
clear span portal frame; 6 – 9m internal eaves height (depending on floor size); 10 to 15% offices (with flexibility for more on ground floor); dedicated parking (with overflow); ample service yard and loading; a full range of B Class uses; average ‘B’ Energy Performances Certificate rating to give energy savings; and enhanced security.
5.3.3 Generally, new industrial floorspace employs a development ratio of 0.4 on unconstrained sites.
5.3.4 There has been a reduction in occupier demand. However, there is still good demand for industrial buildings that are well located and provide good and reasonable modern accommodation. At a regional level, current demand profiles indicate the greatest level of activity between 1,000 and 5,000 m². We see this trend continuing, with new and existing stock of buildings catering for demand for light industry, final assembly, small scale storage and warehousing, and trade uses.
5.4 Offices
5.4.1 Occupier requirements for office space are becoming more sophisticated in terms of the accessibility, efficiency and sustainability of buildings and locations. This consequently impacts on the location and specification of new office development.
5.4.2 Occupier requirements for office space can be analysed in two main ways, either spatially or functionally. In the first instance, the main spatial distinction is between town/city centre
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accommodation and out of town (business park) space. The functionality of a building relates to different office functions such as headquarters, back office, call centre, etc.
5.4.3 In general, town centre/city centre requirements are driven by financial and business services and the Government sector, where as out of town demand is largely driven by hi-tech industries, including technology, media and telecommunications (TMT) and utilities. Despite these different demand profiles, users requiring town/city centre and out of town accommodation will generally share a need for a good IT infrastructure (typically requiring raised floors) and comfort cooling or air conditioning.
5.4.4 At present, the main ways in which the requirement of town/city centre and out of town uses differ is that out of town users attach a greater importance to on site car parking and security and motorway accessibility, while town/city centre occupiers may require a high profile location and attach more importance to proximity to public transport modes and access to amenities.
5.4.5 Functionally, head office and front/back offices generate different requirements. Head office requirements tend to require high quality sites or premises that provide access to relatively high qualified labour. By contrast, front office (eg sales) or back office (e.g. information support/data processing) requirements, which over recent years have often been set up in dedicated call centres, may place less exacting demands on both the quality of the property and the labour force – but often require access to a large pool of labour.
5.4.6 In addition, looking forward, occupiers will require increasing levels of broadband connectivity, reflecting the greater use of electronic data – email, video, voice etc. In the longer term, access to appropriate labour will also become increasingly important, reflecting wide spread labour and skill shortage at a UK wide level. Although property typically accounts for a relatively low share of user’s total operating cost (including labour cost) property will become an increasingly important factor enabling occupiers to recruit and retain staff.
5.4.7 These are all important issues to address when considering the spatial distribution of office and hi-tech buildings within the region. In addition, we would make the following comments about location, situation and access, and clustering.
5.4.8 Location primarily concerns relationship of the site to the motorway and the strategic road network and the principal areas of labour within the travel to work area. Clearly, sites that are difficult to get to or are remote will be discounted by most companies who have an active requirement for new office or high tech research facilities.
5.4.9 Situation and access concern the particular environment to the site, its prominence and the ease of access to the site from the strategic road network. A pleasant and attractive environment is of particular importance for many office users. In addition, access to amenities (such as shopping, a place to go for lunch, etc) has become an increasingly important issue. Sites that are relatively remote will be disadvantaged in this respect.
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5.4.10 With clustering, adjoining uses can be a particularly strong determining factor on how a site will be demanded and developed. If the site adjoins other office uses, then the likelihood of the site being developed for similar uses is likely to be greater. Conversely, if the site is within a predominately old or untidy industrial environment, then the chances of an office or research and development based use is less likely, unless the environment can be controlled or attractive or there is another overriding factor.
5.4.11 The East Midlands regional office market mainly comprises the three cities of Nottingham, Leicester and Derby and the key motorway junctions that relate to these. For the purposes of this report, we are concentrating on the sub-regional Leicester office market which is well established. Hinckley and Bosworth forms part of this market, providing a proportion of its workforce.
5.4.12 Levels of office development within Leicester city centre have been minimal over the last 15-20 years, with the majority of take up over this period observed within out of town locations. The Meridian Business Park in particular has seen high levels of occupation, alongside similar developments benefiting from good access to J21 of the M1 motorway. Availability within these locations is decreasing, however, and with the final phase of development completed at Meridian Business Park we would anticipate seeing a return of demand to the city centre.
5.4.13 Occupiers are now looking back towards city and town centres for the following reasons:
companies taking less car parking, because less people are using the car to get to work; accessibility to local amenities has become increasingly important. This includes a place to go to lunch, informal meeting places, such as cafes and parks, shopping, gyms and other leisure uses, and restaurants; and proximity to competitors for ease of staffing.
5.4.14 Current development plans for the city centre detail the provision for approximately 50,000 m² of office accommodation within the Leicester Business Gateway, with approximately 10,000 m² already completed through the re-development of Colton Square. This scheme, completed in 2009, was the first speculative development in Leicester city centre for a considerable period and comprised the regeneration of the former Grade II listed Police HQ. Whilst the building is marketed as Grade A space, some of the available accommodation fails to meet modern occupier requirements due to it having solid floors in part and restrictions on layout within the original Police station. This is, however, the newest space and, probably, the best quality space within the city.
5.4.15 A new office development of 30,000 m² is proposed at Station Plaza, whilst planning permission has been granted for a 9,000 m² office scheme at the International House site on Granby Street. The latter is located within the professional quarter and is well located for the city centre amenities and the railway station. Without a major pre-let the development is
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unlikely to progress. The developer is considering the disposal of approximately 50% of the site in order to allow another party to create a smaller stand alone 3,500 m² to 4,500 m² office building.
5.4.16 Existing stock within the city centre is of a general poor quality, offering dated accommodation of Grade B/C specification. There is a lack of available Grade A accommodation, with Colton Square providing the only real option.
5.4.17 Current total availability within the city centre is over 50,000 m², with general quoting rents as follows:
second hand - £8.00 - £12.00 per ft² existing new (Colton Square) - £16.50 per ft² design and build opportunities - £17.00 per ft²
5.4.18 Whilst headline rents on the newer buildings remain higher than that of the secondary accommodation, it is often the case that service charges and capital contributions towards maintenance works are significantly less, often with developer guarantees and more efficient heating and cooling systems, double glazed windows, etc. An additional benefit of new build compared to dated existing stock is that efficiency levels can be significantly higher with occupation levels nearer 1:75 ft² rather than 1:100 ft².
5.4.19 Take up levels within the city have been low, with only 10,620 m² (114,300 ft²) of leasehold take up in the past 12 months. The largest completed letting within this period was the University of Leicester who took a letting of 1,375 m² (14, 785 ft²) at Readson House, Regent Road at an average rent of £80,460 per annum (£5.44 per ft²), reflecting a lack of available new stock and take up levels being driven by sub standard deals within Grade B/C space.
5.4.20 With Colton Square, there have been two recent major lettings in the past 12 months to Brewin Dolphin and Learn Direct. Brewin Dolphin took 422 m² (4,544 ft²) on a ten year lease with an average initial term rent of £9.00 per ft². Learn Direct have, however, just signed their agreement for lease on 2,308 m² (24,848 ft²) at Colton Square with a rent equivalent to £10.93 per ft². This transaction, when complete will represent the largest private sector letting this decade, and the largest letting since 2005 when the City Council acquired c. 2,800 m² (30,000 ft²).
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6 Demand Profile for Hinckley and Bosworth
6.1 Local Economic Overview
6.1.1 The adopted Core Strategy and the Hinckley and Bosworth Economic Regeneration Strategy 2009-2014 provide a good contextual profile of the Borough. Information is provided on:-
population; communications; prosperity and deprivation levels; commuting patterns; economic base; labour market; business start ups; and travel to work.
6.1.2 Hinckley and Bosworth is a largely rural borough located to the south west of Leicester. The main urban areas are Hinckley, Burbage, Barwell and Earl Shilton. These are located in the south west of the Borough. Burbage, Barwell and Earl Shilton are closely connected to and support Hinckley's town centre, employment and leisure range. In addition, they provide their own local services for their immediate populations.
6.1.3 According to the adopted Core Strategy, the population for the Borough numbers 103,800. According to the BE Group Study Review (May 2010), the total population has increased from 1996 to 2007. Appendix G to this report breaks down total population and working age population with the level of employment land take up, on a year by year basis. In 1996/1997, the total population was 98,400, with a working age population of 61,400. By 2006/2007, the total population had increased by just under 5,000, with the working age population increasing by over 7,000 to 68,500. By 2025/2026, the total population is due to increase to 113,000. However, there would appear to be a projected reduction in the working age population to 67,100 by the end of the Core Strategy plan period.
6.1.4 Hinckley is well linked to major road communications, being served by both the M69 motorway and the A5 trunk road. These intersect at Junction 1 of the M69 motorway, that is an all movements junction. In addition, restricted access from Junction 2 of the M69 motorway (to Leicester bound traffic) is available via the B4669.
6.1.5 The A47 provides an alternative link between Hinckley and Leicester. This road has been recently improved with the completion of the bypass to the south and east of Earl Shilton.
6.1.6 Local rail communications are provided with a railway station at Hinckley. This station is on the Peterborough/Birmingham line.
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6.1.7 The Borough is considered, as a whole, to have relatively low levels of deprivation. When last recorded, unemployment was at 3.6%, compared to 5% in the East Midlands and 5.2% in the UK. The Government's Index of Multiple Deprivation ranks the area only as the 275th most deprived district out of 354.
6.1.8 However, it is noted that there are significant pockets of deprivation. These are located in the main urban core of Hinckley, Earl Shilton and Barwell. The Super Output Area of Earl Shilton is within the 10% most deprived wards in Leicestershire and within the top 30% of the most deprived areas of the country.
6.1.9 The principal town of Hinckley is located on the Leicestershire/Warwickshire border and is strongly influenced by the West Midlands economy. The northern and eastern areas of the Borough around Markfield, Groby and Ratby are traditionally tied to the Leicester economy. Areas to the west of the Borough are again heavily influenced by economic activity in the West Midlands. Consequently, out commuting is considered to be a serious issue with a figure of 14,500, whilst in commuting is limited to only 5,700.
6.1.10 Historically, the economy of the area has included a strong element of manufacturing, including family owned hosiery, textiles and boot and shoe firms. However these industries have declined. In addition, until the 1980s coal mining also made a major economic contribution.
6.1.11 Since 1995, the local manufacturing base has shed over 4,000 jobs and, according to the Regeneration Strategy, now represents 24.3% of the local economy in employment terms. This is against a figure of 36.7% in 1995. Nevertheless, this figure (24.3%) is considered to be high against the regional (16.3%) and national (11.15%) context.
6.1.12 An interview was held with the Economic Development Officer for the Borough Council on 18 October 2010. A note of this interview forms Appendix 4. In this interview, it was confirmed that manufacturing has been the strongest market sector, although now only 21% of the local population are employed in industry.
6.1.13 According to the Regeneration Strategy, the service economy now represents 69% of local employment. This is an increase from 55% in 1995, with over 7,400 jobs being created in this sector over this period. Nevertheless, the relative extent of the service economy lags behind the regional economy (77%) and the national economy (83%).
6.1.14 Despite a higher representation of general manufacturing employment, only 1% of this employment is within the high technology manufacturing industrial sector. This compares to 2% in Leicestershire and 1.9% over the Region. A similar picture emerges with knowledge based services, with a 13% local representation against a national figure of 17.9%.
6.1.15 With regard to the labour market, it is considered that the high levels of economic activity, at 79.6%, are a strength of the Borough. This compares favourably to a regional figure of 80% and a national figure of 78.6%.
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6.1.16 From the Borough's population, 5,300 people are self employed. This represents 7.8% of the population, compared against the regional and national figures of 9.1% and 9.3% respectively.
6.1.17 VAT registrations within the Borough are recorded at 8.7%. This compares to 9.2% and 9.4% within the regional and national economies.
6.1.18 Good average household incomes are partly the result of daily commuting by many to higher paid jobs outside the Borough. This masks the fact that local jobs are on average comparatively low paid. For example, the average household income in Earl Shilton is £24,900. This does not compare favourably to the average household income for those living in Market Bosworth of £40,100.
6.1.19 72% of people currently travel to work by car. This contrasts to the objective of the stakeholder workshops that informed the HMA Employment Land Study, who were looking for just 25% of journeys to work from SUE residents to be by the car. In addition, there is a large net outflow of employees to Leicester, Blaby, Nuneaton and Bedworth. This high proportion of outward commuting is considered to present a challenge in maintaining shops and other rural services, as well as a sense of community.
6.2 Stock of Employment Premises
6.2.1 The BE Group Review Study refers to Valuation Office (VO) statistics for the level of industrial property within the Borough. There are 1,196 industrial hereditaments in the study area (ie the Borough), totalling 1,266,000 m² (13.63million ft²).
6.2.2 We have undertaken a similar exercise, researching the VO statistics for the main urban area of Hinckley (including Burbage) Barwell and Earl Shilton. The existing stock for industrial and offices for these three centres is presented below in Table 3.
Table 3 - Floor Space for Existing Industrial and Office Property in Hinckley (including Burbage), Barwell and Earl Shilton
Industrial m² (ft²) Offices m² (ft²)
Hinckley 587,250 (6.32million) 53,457 (575,000)
Barwell 66,630 (717,000) 1,075 (11,500)
Earl Shilton 22,580 (243,000) 2,700 (29,000)
Source: VO and King Sturge
6.2.3 The main urban area of Hinckley and Burbage has just over half of all industrial floor space in the Borough. This shows the dominance of the town in terms of the current provision of distribution and industrial floor space.
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6.2.4 Logix Distribution Park in Burbage, which has direct frontage and access from the A5, has been developed by Goodman. This has attracted a number of operators, including Caterpillar, QH, Armstrong Logistics, Johnsons Laundry and Syncreon Technology.
6.2.5 A large number of the industrial accommodation in Hinckley is located at the junction of the A5 and the A47, and along the A47 further to the north. This includes Dodwells Bridge Industrial Estate, Triumph Motorcycles, Hinckley Fields Industrial Estate, The Tesco Distribution Depot and Harrowbrook Industrial Estate. These estates tend to be purpose built and contain many medium and large size units.
6.2.6 In addition, there are a number of industrial estates within the built up area of Hinckley and Burbage. These include the Transco Depot on Coventry Road and Sketchley Meadows Industrial Estate.
6.2.7 There are a number of smaller industrial estates within the built up area of Hinckley. These tend to be closer to the town centre and often comprise older and more densely developed accommodation.
6.2.8 Outside Hinckley, there are major concentrations at MIRA at Higham-on-the-Hill, Caterpillar at Desford, Timken at Ratby and Interlink at Bardon (most of which is located within North-West Leicestershire). In addition, there are a number of smaller industrial estates serving villages in the rural areas.
6.2.9 Hinckley is not considered to hold a strong pitch for offices, being totally subservient to Leicester and Coventry. This is demonstrable from the low level of stock serving Hinckley. The level of floor space - 53,475 m² - is less than 10% of the level of industrial accommodation serving the town.
6.2.10 According to the BE Group Review (May 2010), there is a total of 78,000 m² of office floor space, in 377 different hereditaments. The 53,475 m² in Hinckley represents almost 70% of the total provision in the Borough.
6.3 Vacancy Levels
6.3.1 The BE Group Review (May 2010) provides an analysis of vacant property in both the industrial and office sector in Section 5. In the Borough, in 2009 (when the information was collated), there was 46,377 m² of marketed industrial floor space, made up of 84 properties. Compared to the VO statistics of existing stock, this suggests an overall occupancy rate for the study area of 96.3% by floor space and 93.0% by premises. This represents a reasonably high level of occupancy.
6.3.2 We have undertaken our own research of vacant property in Hinckley (including Burbage), Barwell and Earl Shilton. This research was undertaken by board searches, a search of the
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Prospect Leicestershire website, EGi and Focus databases. Separate tables for Hinckley, Barwell and Earl Shilton can be found in Appendix 5.
6.3.3 The number of premises and level of floor space available for Hinckley and Burbage, Barwell and Earl Shilton for 2009 and 2010 are represented below in Table 4.
Table 4 - Summary of Vacant Industrial Property in Hinckley and Burbage, Barwell and Earl Shilton
Year Hinckley and Burbage Barwell Earl Shilton Number of Properties Number of Properties Number of Properties (Floor Space m²) (Floor Space m²) (Floor Space m²)
2009 54 (34,402) 7 (1,683) 10 (5,679)
2010 34 (36,987) 2 (549) 7 (4,792)
Sources: BE Group (2009) and King Sturge (2010)
6.3.4 Broadly, the level of vacant property has stayed the same from 2009 to 2010. The amount of vacant space in Hinckley and Burbage represents just under ¾ of the total vacant floor space in the Borough.
6.3.5 The BE Group Review (May 2010) provides some analysis on vacant property size bands and quality. We have also undertaken a similar analysis. Table 5 below provides analysis for both sets of research (2009 and 2010), looking at the level of vacant industrial property in Hinckley and Burbage by size bands.
Table 5 - Vacant Industrial Property by Size Band in Hinckley and Burbage
Size Band (m²) 2009 2010 Number of Properties (Floor Number of Properties (Floor Space m²) Space m²)
0 - 100 9 (506) 1 (99)
101 - 200 6 (916) -
201 - 500 24 (7,747) 15 (4,936)
501 - 1000 12 (8,215) 6 (5,038)
1,001 - 2,000 - 8 (11,366)
2,001 - 5,000 1 (2,176) 2 (4,341)
5,000 plus 2 (14,842) 2 (11,206)
Sources: BE Group (2009) and King Sturge (2010)
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6.3.6 In 2009, there were a lot of vacant properties within the 201 m² to 500 m² bracket. However, there was only one property that was vacant between 1,001 m² and 5,000 m².
6.3.7 By 2010, the position had changed. The number of small units had diminished quite significantly. This suggests that there is a healthy churn of small units and that their market is active.
6.3.8 The number of units in the medium to large category, between 1,001 m² and 5,000 m², had increased significantly. Looking at the 2010 analysis, there would appear to be a relative shortage of units below 1,000 m².
6.3.9 With regard to quality, BE Group considers that the majority of floor space in Hinckley and Burbage is of moderate quality, with more budget or poor quality than good. Our analysis would suggest that the quality of the units is spread more evenly between the three categories.
6.3.10 With regard to offices, the BE Group Review Report (May 2010) identified 85 premises in the Borough that were vacant, generating 8,096 m² of floor space. Of these, 48 were in Hinckley and Burbage, generating a total of 3,620 m².
6.3.11 77.6% of these premises were 100 m² or less. The largest available building was 910 m².
6.3.12 Using the same sources as for industrial property, we have also completed schedules of vacant office suites in Hinckley, and Barwell. We have not been able to identify any vacant office property in Earl Shilton. These tables can be found in Appendix 6.
6.3.13 Our investigations have not identified as much vacant office floor space. Instead, we have only been able to identify 14 vacant office suites in Hinckley, generating 2,595 m².
6.3.14 Nevertheless, the profile of vacant office property matches that of the BE Group in their 2009 analysis. The largest office property available is 632 m² with all other vacant suites less than 400 m².
6.4 Development Activity
6.4.1 Table 58 to the BE Group Review Report (May 2010) provides a summary of land take up from 1996 to 2009. In addition, from information supplied by the Borough Council, we are aware 0.01 hectares was developed in 2009/2010, although this appears to be a change of use rather than built development. This information is represented below in Table 6:-
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Table 6 - Employment Land Take Up in the Borough from 1996/1997
Year Employment Land Take Up (Hectares)
1996/1997 0.53
1997/1998 1.63
1998/1999 4.12
1999/2000 21.46
2000/2001 0.58
2001/2002 0.73
2002/2003 7.05
2003/2004 0
2004/2005 0
2005/2006 0
2006/2007 23.11
2007/2008 0.21
2008/2009 0.78
2009/2010 0.01
Total 60.21
6.4.2 This represents an annual average take up of 4.3 hectares per year. However, as the BE Group Report notes, the take up figures have been skewed to a large extent by two major developments - Triumph Motorcycles (1999/2000) and Logix Park (2006/2007).
6.4.3 Apart from these two years, the highest take up was experienced in 2002/2003 with 7.05 hectares. In most years, the level of take up is less than one hectare per year. Moreover, between 2003 and 2006 - a period of real economic growth and developer confidence - no employment land was developed for employment purposes.
6.4.4 This would suggest that the underlying take up rate, excluding the Triumph Motorcycles Factory and Logix Park, that is distribution based, is much lower.
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6.4.5 Unfortunately, there is no breakdown made available by either the BE Group or the Council of the employment land take up by site and type. However, we have reviewed the Employment Land Availability schedules kept by the Borough Council. These schedules summaries the land available, either through planning permission or allocation, as part of the employment land supply. However, they also provide details of which sites were built and under construction. These schedules are provided in Appendix 7.
6.4.6 From 2006 to 2010, eight sites have been developed in the Borough. Details of these are provided in Table 7.
Table 7 - Details of Development of Employment Land in the Borough from 2006 to 2010
Address Land Developed Floor Space Developed Use Class (Hectares) (m²)
Land off Victoria Road, 2.33 2 units totalling 7,615 m² B1, B2 and B8 Beveridge Lane Industrial Estate, Stanton-under- Bardon
Logix Park, Burbage 20.78 5 units totalling 64,405 m² B1, B2 and B8
Nutts Lane/EME Site, 0.11 1,037 m² B1, B2 and B8 Hinckley
Frith House Farm, Rogues 0.1 1,002 m² B8 Lane, Hinckley
Land Rear of 6 Watling 0.07 462 m² B1 and B8 Close, Burbage
Hilltop Works, 2 Keats 0.1 925 m² Conversion of Lane, Earl Shilton factory to studio
Nutts Lane/EME Site, 0.28 1,371 m² B1, B2 and B8 Hinckley
Wheatfield Way, Hinckley 0.33 2,338 m² B1a offices Fields Industrial Estate, Hinckley
Source: Hinckley & Bosworth Borough Council
6.4.7 Apart from the first two entries, that were developed prior to March 2007, the level of development activity has been very thin. Partly, the thinness of development will be down to
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the economic recession. However, it is also indicative that the level of organic demand for industrial property is not significant in the Borough. Instead, the large developments that have taken place (eg Logix Park) are the result of attracting footloose enquiries from the regional and sub regional distribution market.
6.5 Case Studies
6.5.1 To gain a greater perspective of recent development activity in the Borough, and current demand for the three principal sectors, we have looked particularly at three different developments. These are:-
Logix Park, Burbage
Tungsten Park, Hinckley
Atkins Building, Hinckley
6.5.2 Logix Park is a 16 hectare site positioned with access off the A5 in Burbage. The development was undertaken by Goodman Real Estate and comprises five large distribution units totalling over 2 million ft². The first phase built in 2006 was available on a design and build basis, either for sale or to rent.
6.5.3 Occupiers include:
Caterpillar (UK) who took a lease on 1,500,000 ft² (139,353 m²) in June 2006 at a rent equating to £6.00 per ft² (£64.58 per m²).
Walsh Western (UK) Ltd who took a unit of 318,000 ft² (29,542m²) in a pre-let agreed January 2006 for a term of 10 years at a rent of £1,669,500 per annum, equating to £5.25 per ft² (£56.51 per m²), subject to an option to break in year seven,
Johnson Apparelmaster, a subsidiary of Johnson Service Group plc, took 46,000 ft² (4,273 m²) on a pre-let in January 2006 at £276,000 per annum, equating to £6 per ft² (£64.58 per m²) for a term of twenty years.
6.5.4 Two further units were speculatively developed at the start of 2008:-
A unit of 130,000 ft² (12,000 m²) was developed and let in 2008 to Syncreon Technologies . Details of the deal are confidential although the quoting rent was £5.75 per ft².
A further unit of 96,500 ft² (9,000 m²) was developed and let to Armstrong Logistics in March 2010. The quoting rent was £5.75 per ft² with the deal done at £5.50 per ft².
6.5.5 Tungsten Park is a 4.7 ha (11.74 acre) mixed use trade/business park situated just off the Coventry Road in Hinckley. The development was undertaken by Tungsten Properties Ltd
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with Phase 1 (Units K-Y) completed in July 2009. This development is listed as under construction in the latest (March 2010) Employment Land Availability Schedule produced by the Borough Council. Marketing details of the development can be found in Appendix 8.
6.5.6 Phase 1 comprises 14 units extending to 2,790 m² (30,000 ft²) of trade counter, industrial and distribution units ranging from 200 m² to 460 m² (2,163 ft² and 4,951 ft²) GEA. Units have been available for sale or to let, with six units having been sold freehold and a further two let. Details of all freehold sales are confidential.
6.5.7 Three units remain vacant and are available for sale or to let at quoting rents of £5.50 per ft² or capital values equating to circa £100 sq ft. Rentals are based on a 10 year lease with a tenant break option at the end of the 5th year. Flexible terms and sales incentives are available. A further unit of 230 m² (2,476 ft²) is currently under offer.
6.5.8 Occupiers include Impulse UK, Hinckley Plumbing & Heating, Barwell Tyre Centre and Julian Designs. The most recent deal at the park was in January 2010 to Bosworth Plastics who took 230 m² (2,475 ft²) at £5.45 per ft² on a two year lease.
6.5.9 The remaining land (Phase 2) has detailed planning permission, granted in the Autumn of 2009, for 2 car show rooms 2,790 m² (30,000 ft²) of Grade A B1 office units capable of providing units from 133 m² (1,435 ft²) plus a further 9,290 m² (10,000 ft²) of industrial uses. LSH and Wards are marketing the remaining units and the balance of the land on a design and build basis.
6.5.10 The Atkins building is located on Lower Bond Street in central Hinckley. It was formerly the home of the Atkins hosiery firm. This former factory, listed (Grade II) in 2006, was purchased by Hinckley & Bosworth Borough Council in 2007. The building has been part of a £7.5 million redevelopment project, funded by the Borough Council and the East Midlands Development Agency. The property was opened early 2010. Details of the scheme can be found in Appendix 9.
6.5.11 The property provides 45,000 sq ft of managed work space for creative arts businesses including:-
Open plan office space for start-up and growing enterprises
Serviced offices
Studio space, suitable for creative industries
Gallery area for high quality touring exhibitions
Café
Retail space
Conferencing facilities.
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6.5.12 The studios, gallery and multi-purpose educational facility are occupied by Creative Hinckley and used for exhibitions, workshops and events. Creative Hinckley is the name of the collective of arts and creative industries practitioners who live, work and practice within the Borough of Hinckley and Bosworth.
6.5.13 The creative industries include jewelers, photographers, fashion designers, graphic artists, fine artists, and marketing companies.
6.5.14 The serviced offices house a number of local companies, with incentives offered for new businesses.
6.5.15 North Warwickshire and Hinckley College’s new campus building is being developed along the northern edge of the Atkins’ building site. This will allow a close working relationship between the college and the enterprise hub.
6.6 Development Land
6.6.1 We have been provided with a Summary of Employment Land Availability as at 31 March 2010 by officers at the Borough Council. This schedule forms Appendix 10.
6.6.2 This identifies 22.77 hectares of land that has either a planning permission or an allocation for employment land development.
6.6.3 In addition, it identifies 63,858 m² that has planning permission as part of an extension to existing facilities. Much of this (61,583 m²) concerns the Caterpillar works at Desford. Assuming a development plot ratio of 40%, this would require a further land take of 15.97 hectares. This would give an overall employment land supply of 38.74 hectares.
6.6.4 The Summary of Employment Land Availability at 31 March 2010 also lists those sites that are currently under construction. This includes an entry referred to Land North of Coventry Road, Hinckley, with an area of 4.7 hectares. This is Tungsten Park - a mixed use scheme, including industrial and trade units, that has been described above.
6.6.5 BE Group in their May 2010 Review Report undertook quite a detailed analysis of employment land supply. This can be found in Section 9 to their report. They identify 12 sites that have the potential to generate 56.9 hectares of employment land.
6.6.6 These sites were distributed between Hinckley and Burbage, the rural North East and the rural North West. Only five sites were contained within Hinckley and Burbage, generating 12.76 hectares of employment land.
6.6.7 25.96 hectares was in the rural North East. 24.35 hectares of this are at Nailstone Colliery, a potential distribution warehousing site.
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6.6.8 Four sites are found within the rural North West, totalling 18.18 hectares. However, all these sites form part of the MIRA complex at Higham-on-the-Hill, a couple of kilometres to the north west of Hinckley along the A5 trunk road.
6.6.9 BE Group considers that a more realistic assessment of the Borough's land supply is closer to 40 hectares. This assessment is based on the potential employment land loss of a site south of Johnsons, Rugby Road, Burbage (of 3.94 hectares) and land at MIRA of allocated sites of 13.13 hectares. Whilst the latter site is allocated, it is considered that these uses are more likely to be reserved for MIRA's operations and do not form part of the general employment land supply.
6.6.10 We think such concerns may be misplaced. Whilst the MIRA facility may not be part of the general employment land supply, if developed, it will still attract employment and, therefore, have an important function in terms of the employment land supply to the Borough.
6.6.11 Moreover, we understand that there are plans by MIRA to develop a large part of their site for a technology park of circa 165,000 m². This could require 40 hectares of development land. According to the Economic Development Officer, this development (if realised) will create 2,000 jobs over the next ten years.
6.6.12 On this basis, the headline figure of 56.90 hectares may be more realistic than previously considered by BE Group. Indeed, the actual level of supply may exceed this. This should be reviewed when BE Group next update the Employment Land and Premises Study.
6.6.13 BE Group refer to a pipeline of supply. Specifically, reference is made to a 14 hectare extension to Logix Park at Burbage, providing 10 hectares of distribution land and 4 hectares of industrial land. In July, Goodman (the developer of Logix Park) submitted an outline planning application for a mixed development on 43 hectares of land situated between Logix Park and Sketchleys and referred to as Sketchley Brook. This proposed development includes employment floorspace totalling 68,746 m², split:-
19,509 m² B1(c) and B2 industrial 47,379 m² B8 warehousing 1,858 m² B1(a) offices.
6.6.14 This development will provide for the development needs of Hinckley and Burbage, at a local level, as well as serving the sub-regional and regional logistics market. To a certain extent it will correct a relative imbalance of employment land supply, with Hinckley and Burbage previously underprovided for.
6.6.15 In addition, the BE Group refers to the 25 hectares proposed to serve the SUEs at Barwell and at Earl Shilton as part of the future pipeline. It considers that this provision is required to ensure sufficient land is brought forward to match the overall needs of the Borough based on past take- up rates. However, this position probably needs reviewing given the recent announcement by
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MIRA and the extent of development proposed at Sketchley Brook. In addition, the BE Group study does not seek to consider the need for the total SUE allocation in a local context.
6.7 Rents, Prices and Yields
6.7.1 Through Focus, EGi and our own knowledge of the market, we have tracked a number of deals that have occurred in Hinckley for both industrial and office property. A table of these deals form Appendix 11.
6.7.2 The highest recorded rent achieved is £6.20 for a small 2,000 ft² unit in Teal Business Centre. However, this headline rent may not actually reflect the real rental paid. Instead, that can only be calculated when the length of the lease and inducements such as rent free periods are known. In reality, we suspect that the rental levels achieved in the local market will be lower.
6.7.3 Looking forward, it is difficult to speculate what rents, freehold prices, yields and land prices are likely to be. This is due to the depth of the recession and the affect that it has on developer confidence. For these reasons, we consider that there are a couple of years at least before market conditions return to any form of normality.
6.7.4 Nevertheless, despite this caveat, we consider that when market conditions return to normality, then pre-peak levels of 2005/2006 are the most likely that will be achieved. These are summarised as follows:-
industrial rents - £5.25 per ft² for units less than 1,000 m² (c. 10,000 ft²) and between £4.75 and £4.95 per ft² for units greater than 1,000 m² (c. 10,000 ft²); freehold prices between £67.50 and £75.00 per ft²; yields 7% to 7.5%, assuming a 15 year FRI lease; and land prices of between £200,000 and £250,000 per net developable acre.
6.7.5 For offices, it is very difficult to speculate on likely rents, sale prices and yields given that Hinckley and Burbage does not possess a well enough established office market. However, as a rule of thumb, the land prices for offices in employment areas in local markets will not be dissimilar to those for industrial land.
6.8 Enquiries
6.8.1 The BE Group conclude that the greatest level of industrial need is for modern premises between 100 m² and 500 m². This was based on a survey of local companies and consultation with national, regional and local agents.
6.8.2 Apart from the distribution market where much larger premises are sought, our own investigations, including consultations with local agents, would support that the majority of companies looking for space in Hinckley are for small units generally less than 1,500 m². The majority of these requirements would be for less; quite often less than 500 m².
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6.8.3 Enquiries for office space are far less. This reflects the fact that Hinckley does not have an established office core and is not considered to be a prime office pitch. Instead, the office market generally meets the needs of local service sector businesses and provides ancillary space for existing industrial firms.
6.8.4 The BE Group Report concludes that demand for office suites is generally between 0 and 100 m². Again, our investigations would support this conclusion.
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7 Market Appraisal for Earl Shilton and Barwell
7.1 Stock of Employment Land
7.1.1 The VO figures for stock of industrial premises for Earl Shilton and Barwell are as follows:-
Earl Shilton - 22,580 m² (243,049 ft²) Barwell - 66,630 m² (717,199 ft²)
7.1.2 These represent 1.8% and 5.3% respectively of the overall stock of industrial premises in the Borough. Moreover, combined, Earl Shilton and Barwell generate only about one seventh of the stock of industrial premises in nearby Hinckley and Burbage. This gives a good indication of the relative size of the current market for industrial property in Earl Shilton and Barwell.
7.1.3 The level of offices is even smaller. Earl Shilton contains a stock of 2,700 m² (29,000 ft²). Barwell has a stock of only 1,075 m² (11,571 ft²). Combined, this represents only one fifteenth of the total stock of offices in nearby Hinckley, which itself is not considered to be a particularly established office market.
7.1.4 These statistics demonstrate that Barwell and Earl Shilton have only a limited market presence in terms of employment floorspace. Moreover, they are subservient to nearby Hinckley.
7.1.5 With the exception of Mill Street Industrial Estate in Barwell, the industrial property in Earl Shilton and Barwell is dispersed and ingrained within the built up area of the two settlements. This is illustrated well by the Proposals Map to the 2001 adopted Local Plan, with existing employment areas shaded pink. An extract from the Proposals Map can be found in Appendix 12.
7.1.6 Appendix 1 to the BE Group Review (May 2010) identifies 14 different employment areas in Barwell. These total 16.11 hectares. Seven of these areas are graded C. These are considered to be lower quality employment areas and suitable for potential release for alternative uses, particularly once the SUE comes forward for development. These 7 sites add up to 4.21 hectares.
7.1.7 The BE Group Review (May 2010) identifies 11 employment areas or sites within Earl Shilton. None of this current stock is greater than 1 hectare and totals only 4.11 hectares. Of the 11 areas, 7 are graded as C. These total 2.27 hectares.
7.1.8 These proportions are indicative of the overall quality of the existing stock of industrial premises serving Barwell and Earl Shilton. Much of the stock is small, often isolated and poorly served by access. In addition, much of the existing stock is dated.
7.1.9 This has led to the release of employment land in recent years for alternative uses, particularly for housing. Therefore, not only is the stock of employment land serving Barwell and Earl Shilton relatively insignificant, both quantitatively and qualitatively, compared to Hinckley and Burbage and the rest of the Borough, it is also eroding.
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7.2 Vacancy Levels
7.2.1 As referred to in the previous section, we have undertaken an analysis of vacant industrial and office property in Earl Shilton and Barwell. Schedules of vacant industrial and office property can be found in Appendices 6 and 7 respectively.
7.2.2 The level of vacant industrial premises as a function of stock is presented below in Table 8.
Table 8 - Vacant Industrial Premises in Earl Shilton and Barwell
Number of Vacant Floor Stock (m²) Vacancy Rate Vacant Space (m²) % Properties
Earl Shilton 7 4,790 22,580 21
Barwell 2 549 66,630 0.8
Source: King Sturge
7.2.3 The level of vacant industrial premises in Barwell is insignificant, with almost a complete occupancy rate. The position in Earl Shilton is totally different. Over 20% of all industrial stock lies currently vacant.
7.2.4 Vacant premises ranges from a unit of 200 m² through to the largest unit of over 1,500 m². This is broadly representative of the existing stock which caters mainly for small local companies.
7.2.5 The level of vacant office premises as a function of stock is presented below in Table 9.
Table 9 - Vacant Office Premises in Earl Shilton and Barwell
Number of Vacant Floor Stock (m²) Vacancy Rate Vacant Space (m²) % Properties
Earl Shilton 0 0 2,700 0
Barwell 1 170 1,075 15.8
Source: King Sturge
7.2.6 Currently, there is only one office suite that is currently vacant and available in both Barwell and Earl Shilton. Nevertheless, given the relative insignificance of the office market, the one unit that is available (a unit of 170 m²) still represents over 15% of the built stock for Barwell. Again, this demonstrates that Barwell and Earl Shilton are not considered to be established office pitches.
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7.3 Development Activity and Development Land
7.3.1 The Employment Land Availability Schedules from March 2006 to March 2010 do not identify any development of employment land for employment purposes in either Earl Shilton or Barwell.
7.3.2 From an inspection of the existing employment areas of both Earl Shilton and Barwell, it is clear that there has been no new development for some considerable time. The stock of relatively modern accommodation is thin on the ground.
7.3.3 The only really purpose built estate is Mill Street Industrial Estate in Barwell, that has a defined estate road, a mix of building sizes and a critical mass. However, even this estate has its flaws, being bound by housing on three sides and with a fragmented frontage to the main road.
7.3.4 According to the Employment Land Availability Schedule for 31 March 2010, only one development site in Earl Shilton and Barwell is shown as committed. This is Barwell Business Centre, where planning permission was granted in 2007 for redevelopment of 0.43 hectares for a mixed scheme of 10 small B1, B2 and B8 units to provide 1,604 m² of floor space and a new medical centre with associated pharmacy. However, this planning permission was never implemented and has now expired.
7.3.5 No other sites in Earl Shilton and Barwell have been identified for development. In addition, as far as we are aware, no other sites (apart from the SUEs) have been promoted.
7.3.6 This suggests a relatively inactive market for Earl Shilton and Barwell for both industrial and office property, particularly given how much the stock is dated and needs replenishing. It is also indicative of the lack of development both nationally and regionally, particularly speculative, of industrial and office schemes over the last two years because of the credit crunch.
7.3.7 However, a further factor behind the lack of development activity is the little scope for new sites within the settlement boundaries. The provision of new land within the SUEs should help to stimulate the local market.
7.4 Enquiries and Market Requirements
7.4.1 The BE Group Review (May 2010) details a company survey undertaken to establish, amongst other issues, what property requirements exist in the Borough.
7.4.2 140 questionnaires were completed, with 18 responses from companies located in Barwell and 12 responses from companies based in Earl Shilton. Whilst not entirely reliable (given the low response rate), it does give a picture of the size and type of premises occupied and required.
7.4.3 Of the 30 companies from Earl Shilton and Barwell who responded, 20 were housed in industrial or warehouse premises. Five occupied offices, with the remainder mostly working from home.
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7.4.4 Virtually all companies in Earl Shilton and Barwell occupied space below 2,000 m². There was one company in Barwell who occupied premises above 2,000 m² and another in Earl Shilton who occupied premises greater than 5,000 m² (but not 10,000 m²). At least 14 of the companies (out of the 25 who were in offices or in industrial/warehouse space) occupied premises less than 1,000 m².
7.4.5 Most companies in Barwell and Earl Shilton were satisfied or very satisfied with the current accommodation. Only 20% of companies were unsatisfied or very unsatisfied.
7.4.6 Four companies based in the Borough had property requirements for industrial floor space that included Barwell in their area of search. These ranged from 100 m² to 500 m², although one company was looking for a site of 1 hectare. One company was looking to upsize, one downsize and other to remain the same size. The preferred area of search ranged from anywhere in the Borough to Hinckley, Barwell and Earl Shilton to just Barwell.
7.4.7 Three companies based in the Borough had property requirements for industrial floor space that included Earl Shilton in their area of search. These were for 201 m² to 500 m² (looking to move from an existing building of between 1,001 m² and 2,000 m²), 1,001 m² to 2,000 m² (from 501 m² to 1,000 m²) and 25,000 m² (from 20,000 m²). The first enquiry was for a business park based company with the area search referred to as the Leicester area. The second enquiry was from a rural based company with Earl Shilton as the preferred area of search. The last enquiry, which was for a significant level of floor space, had a preferred area of search described as Hinckley, Earl Shilton and anywhere close to the motorway.
7.4.8 We have discussed likely enquiries and company requirements with both the Economic Development Officer of the Borough Council and local agents.
7.4.9 A note of the interview with the Economic Development Officer forms Appendix 4. The Economic Development Officer has advised that enquiries received tend generally to be for Hinckley. However, she anticipates that there will be increased demand for industrial accommodation at Earl Shilton now that the A47 bypass has been completed.
7.4.10 The Economic Development Officer advises also that small industrial units of a medium quality are required in Earl Shilton and Barwell. Start up units for small businesses will also be required.
7.4.11 We have interviewed two local agents by telephone. These are NRS and Mather Jamie.
7.4.12 NRS considered that Earl Shilton and Barwell is not an office location. Instead, demand for premises for Earl Shilton and Barwell is generally restricted to the smaller shed market, with units ranging from 100 m² to 1,000 m². The recent improvements to the A47 to Earl Shilton are not considered sufficient to attract big high bay warehousing.
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7.4.13 Hinckley and Burbage are considered to be a superior market and location to both Earl Shilton and Barwell. Nevertheless, there may be some latent demand from Hinckley and from Earl Shilton and Barwell for more modern industrial premises from those companies who are currently in dated stock. In addition, it was considered that there was a relative lack of available industrial floor space serving Leicester. As such, there may be possible inward investment from the western side of Leicester.
7.4.14 Taking this into account, NRS considered that demand levels for new stock in Earl Shilton and Barwell could range between 1,000 m² to 1,500 m² per annum for the lifetime of each SUE.
7.4.15 Mather Jamie, who are based in Loughborough, considered that there could be demand for new employment space at Barwell and Earl Shilton from the rural hinterland of south Leicestershire. In addition, as with NRS, Mather Jamie considered that there may be some demand from Leicester City, because of a lack of supply.
7.4.16 Mather Jamie did not consider that new employment stock at Barwell and Earl Shilton would necessarily pull existing companies from surrounding towns, such as Hinckley and Burbage. Nor did they consider Barwell and Earl Shilton to be an office location, with Hinckley only possessing a weak office core.
7.4.17 Mather Jamie concluded that the greatest area of demand would be for industrial units ranging from 500 m² to 1,500 m². They concluded that likely take up for each SUE would be in the region of between 1,000 m² to 2,000 m² per annum.
7.4.18 The BE Group Review (May 2010) refers to some commercial property market analysis undertaken by local agents. We understand that this local agent was Innes England. This report advised that the SUE employment areas be restricted to B2 and/or B8 uses. There is unlikely to be significant demand for offices, although there may be scope for start-up/incubator units and move-on space.
7.4.19 For Barwell, it is reported that demand for industrial units of 1,000 m² and above is unlikely. Instead, demand is likely to be focused on the range between 100 m² and 500 m². It notes also that the SUE is likely to complement the existing industrial estate (ie Mill Street Industrial Estate) which is popular and has good occupancy rates.
7.4.20 Finally, it is reported that access from the M69 is circuitous and, hence, not ideal for larger uses.
7.5 Soft Market Testing
7.5.1 We have approached a number of developers who are active in the East Midlands with industrial and office property. These include Wilson Bowden, Clowes, Cedar House and Goodman. An email with plans of the proposed sites and a brief description of the likely type of development forthcoming was sent.
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7.5.2 Unfortunately, the response from developers has been very poor. To a certain extent, this is indicative of the current inactive development market. Clowes responded to say that the sites were not of interest. They are reluctant to look at sites with infrastructure requirements and market conditions are poor. They are concerned about market conditions in the future and are deferring acquisitions to see if the market falls further. Currently, they prefer opportunities with income angles.
7.5.3 The response from Goodman was even more blunt. They are not looking to acquire any sites at the moment and are not interested. Whether this position was due to its current interest in Sketchley Brook was not made clear.
7.6 SWOT Analysis
7.6.1 Two principal strengths of the SUEs are their relative accessibility to the rural hinterland and the accessibility to the western side of Leicester, where it is acknowledged that supply of industrial property is tight. This accessibility will draw in demand, but it will be limited to a local, rather than a sub regional or regional market. A communications plan is provided in Appendix 13.
7.6.2 A further strength is the control of the sites by a limited number of parties and planning status conferred by the Core Strategy. This will provide planning certainty when the development market returns.
7.6.3 A principal weakness is the relative inaccessibility of Barwell and Earl Shilton to the national motorway and trunk route network. Hinckley and Burbage are much better located and will naturally attract much greater levels of demand for this very reason.
7.6.4 Qualitatively, the relative inaccessibility to the motorway network will limit the size and type of industrial unit that will be demanded at Earl Shilton and Barwell. Generally, large warehousing will not be attracted; instead, being catered for at better locations, such as Logix Park and Interlink.
7.6.5 The relative size of the employment base for Earl Shilton and Barwell is a further weakness. Moreover, this core of employment land is eroding. 25 hectares of new employment land would represent a more than doubling of existing employment land.
7.6.6 The allocation and promotion of 25 hectares would help to create a market. However, the scale of the market will always be limited by the inherent strengths and weaknesses of that particular location. In this case, the attraction of the location is mainly local, rather than strategic or regional.
7.6.7 There are no obvious growth sectors or business clusters in Hinckley and Burbage and Barwell and Earl Shilton in particular, to build on.
47 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
7.6.8 A further weakness is the lack of any sort of office market for Barwell and Earl Shilton. To a certain extent, this is a function of the wider Borough, with Hinckley town not possessing a particularly significant established office market itself.
7.6.9 There are a number of opportunities. The recently completion of the A47 bypass improves significantly the flow of traffic from Hinckley to Leicester.
7.6.10 Congestion through Earl Shilton is also removed. This should add to the attraction of Barwell and Earl Shilton, with particular reference to the rural hinterland and Leicester.
7.6.11 The extent of new housing will provide an opportunity, bringing a readily available source of labour. This is quantified in the next section, with reference to the recent study undertaken by Experian on employment land generation from SUEs.
7.6.12 We consider there will be latent demand from companies occupying dated industrial premises in both Barwell and Earl Shilton. Principally, there will be a drive for better quality accommodation. Some of the demand may be for environmental and taxation reasons, with greater pressure for low carbon buildings. However, in our experience, relocation from dated stock often leads to a downsizing of floor space by between and a third and a half. Generally, this is because modern premises are more efficient and, therefore, require less physical space.
7.6.13 Relocation of companies from substandard industrial areas and buildings in Barwell and Earl Shilton will present development opportunities within Barwell and Earl Shilton for both employment and housing, but particularly the latter. This should assist regeneration of the towns, particularly sites close to the existing centres.
7.6.14 In addition, the relocation of occupiers from existing stock, particularly in Barwell where occupancy rates are very high, will allow a far greater natural churn of existing industrial premises. This should assist companies in realising their full potential.
7.6.15 We do not foresee many particular opportunities with offices. The office market for Barwell and Earl Shilton is insignificant. What limited scope exists for office development, will be on a very small scale, with small courtyard offices or suites maybe suitable in a good market in the new employment area of Earl Shilton, given its prominence to the A47 bypass..
7.6.16 Finally, there could be an opportunity to link new development to the existing Mill Industrial Estate at Barwell, subject to control of third party land. This could improve access to the estate and act as a natural extension.
7.6.17 The greatest threat is the current market conditions. These have been commented above and the reaction of developers is indicative of current sentiment.
7.6.18 Currently, development is only being undertaken on a presale or prelet basis. No speculative development is being undertaken. Given that we foresee demand will mainly be for small
48 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
industrial units, this could be an issue, unless the market improves significantly by the time development commences.
7.6.19 The other obvious threat is the availability of other better located employment development land in Hinckley and Burbage and wider afield. As referred to, the SUEs are unlikely to attract footloose requirements on a sub regional or regional basis. Instead, such requirements will look first at locations much more accessible to the A5 and the M69 motorway. In addition, demand from Leicester, when supply of industrial premises is acknowledged to be tight, will be served to a certain extent by the proposed Strategic Employment Site of 20 hectares at the Lubbesthorpe SUE.
7.6.20 For this reason, we do not see the pitch of Barwell and Earl Shilton to be strategic or regional. Instead, its principal purpose will be to serve and improve local markets.
49 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
8 Employment Land Generation from the Sustainable Urban Extensions
8.1 Introduction
8.1.1 In March 2010, Experian produced a draft study entitled Sustainable Urban Extensions - Housing and Employment Land Study. This study was commissioned by Prospect Leicestershire.
8.1.2 The Study aims to provide evidence on the likely functional links that may exist between SUEs within Leicestershire and employment land that could be promoted alongside them. It emphasises that references to land and floor spaces areas in the report should be regarded as elements of the overall total recommended by the 2008 HMA Study by PACEC. As such, the Study indicates - of the total recommended allocations in the HMA Study - what proportion might be expected to have a functional relationship with each SUE.
8.1.3 The Study considers that a key issue is to understand the likely socio-economic, occupational and industrial profile of future SUE residents. By understanding these profiles, the Study considers that Prospect Leicestershire and its partners can begin to understand the type and amount of employment land that these future SUE residents could support.
8.2 Approach
8.2.1 The basic approach taken to address these issues has been to create an economic model which links housing need to employment by industry and employment land needs by considering the likely characteristics of the residents of each SUE. The analysis also includes sensitivity testing around alternative levels of affordable housing and commuting patterns.
8.2.2 The approach taken by Experian is set out in Figure 2.1 to the Study. For ease of reference this is reproduced below:-
50 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
8.2.3 The Study notes that the first stage of the project is to establish the type of housing planned and phasing of the build. This needs to assess how many of the dwellings are going to be built where and when. Table 4.1 of the Experian Study summarises the household and land allocations. For the Hinckley and Bosworth SUEs, 4,500 households are assumed, with employment land at between 20 to 25 hectares. The location is confirmed as Barwell and Earl Shilton.
8.2.4 At this point, it is worthy of note that the actual level of households proposed by the developers for Barwell and Earl Shilton is less than 4,500 homes, being closer to 4,000 households.
8.2.5 An important part of the approach is to produce a mosaic profile. This stage of the research focuses on gaining a greater understanding of the characteristics of the people likely to live in the SUEs, from which occupational profiles can be developed. It provides a detailed and accurate understanding of each citizen's location, their demographics, lifestyles and behaviours. It can be used to provide an understanding of individual's likely housing type, tenure, income, employment and travel preferences.
8.2.6 The mosaic profile has been identified for towns influencing the 4 SUEs areas away from Leicester. These are considered to be Hinckley, Coalville, Loughborough and Melton.
8.2.7 Charnwood, Loughborough, Hinckley and Bosworth and North West Leicestershire SUEs are considered to have Type H38 as its most dominant category. These are defined as people living in brand new residential developments. This type is considered to be the most frequent mosaic type for these SUEs. This type consists of people who have just moved into their new homes during the past nine months. Given the tendency of new housing to be occupied by young people, whether single or in recently formed relationships, it is considered likely that the largest number of people in this type will be young, single, or co-habiting adults who do not yet have children.
8.2.8 Having established the likely mosaic profile for each SUE, the Study then utilises the existing mosaic to occupational relationships to provide an occupational profile for the new developments. Starting with the mosaic profile, this uses existing local relationships between mosaic and occupations and between occupations and industry, to reach an industry forecast required for the employment land calculations.
8.2.9 The approach to convert mosaic household estimates for each SUE into an occupational profile consists of four steps. These are:-
multiply the number of households by the average number of working age adults per house to derive a working age population; combine with a propensity to be employed (disaggregated by market, social rented and intermediate housing tenure) to derive total employment;
51 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
examine the propensity to be employed by occupation to derive a residential occupational structure; adjust for commuting outflows using Census data to examine the propensities for each occupation to live and work in the same area.
8.2.10 An occupation to industry matrix has been used to convert occupational estimates. The results have been sense checked to ensure that the industry sectors are broadly in line with forecasts of employment in the SUE’s surrounding district. Using a 30 sector industrial structure, employment retained within the SUEs is expected to be highest in absolute terms in health, retailing and education.
8.2.11 The final part of the model disaggregates the 30 sector industry estimates into the detailed sectors required for the employment land calculations. It is emphasised that the employment land estimates represent the demand that is expected to be generated by the residents of the SUEs and only those residents that do not commute to work elsewhere.
8.2.12 The change in employment have been translated into an estimate of demand for land using:-
employment densities (m² per worker) applied to the change in employment by sector to give estimates of the additional floor space required in the future; and plot ratios (floor space to site area) applied to the forecast floor space to give an estimate of the amount of additional employment land required in the future.
8.3 Conclusions
8.3.1 Table 6.4 provides a summary of total employment and employment land requirements. The employment land requirements for the Hinckley and Bosworth SUEs are as follows:
offices - 5,484 m² of floor space industrial - 4.4 hectares warehousing - 4.6 hectares.
8.3.2 As referred to above, these figures have been worked on the assumption that 4,500 houses will be delivered in Barwell and Earl Shilton. Instead, the developers are currently looking at a figure closer to 4,000 houses. Assuming 4,000 houses, it can be simply calculated that the requirement for employment land, for each sector, will be slightly reduced. Employing a factor of 0.89 (ie 4,000 divided by 4,500) the following employment land requirements are generated:
offices - 4,875 m² industrial - 3.91 hectares warehousing - 4.09 hectares.
8.3.3 Based on these revised housing figures, there is a total employment land requirement of 8 hectares for industrial and warehousing. In addition, assuming a 40% development ratio (which
52 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
is the development industry standard for 2 storey out of centre courtyard offices), there is an employment land requirement of 1.22 hectares to accommodate the 4,875 m² of offices.
8.3.4 Based on the proportional levels of housing development,, the 8 hectares of industrial and warehousing land would be split with 3 hectares required to serve the housing needs of Earl Shilton and the remaining 5 hectares serving the increased population for Barwell.
53 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
9 What the Market Will Deliver
9.1 Market Overview
9.1.1 Barwell has a much greater level of industrial property than Earl Shilton. The BE Group Study identifies the current stock of premises in Barwell absorbing 16.11 ha, whilst Earl Shilton's stock absorbs only 4.11 ha.
9.1.2 Conversely, BE Group's and our analysis on vacant property show that Earl Shilton has more units and greater floorspace that is vacant and available. The occupancy rate of industrial premises in Barwell would seem to be very high, particularly given current economic conditions.
9.1.3 The quality of the accommodation in both Barwell and Earl Shilton is either moderate or poor, but cheap. There is very little purpose built modern accommodation in standard industrial estate layout. Instead, much of the space is ingrained within other uses (ie residential or town centre) with poor access. The one exception is Mill Street I/E in Barwell, where there is a critical mass of decent sized units. However, even here the frontage of the estate is broken by houses.
9.1.4 The BE Group Study identifies that 7 sites in Barwell, totalling 4.21 ha, are not really fit for purpose and could be released for alternative uses (ie graded C). Earl Shilton also has 7 such sites, but totalling only 2.27 ha.
9.1.5 Only few industrial units will be occupied by a single company that are greater than 2,000 sqm.
9.1.6 Barwell and Earl Shilton are not a recognised pitch for high bay distribution. Instead, demand in this sector has been attracted to Hinckley and Burbage, particularly accessible to the A5 (ie Logix Park).
9.1.7 Hinckley is not a strong or coherent pitch for offices. Earl Shilton and Barwell are not recognised locations for offices.
9.1.8 There has been no new development of industrial space in Barwell or Earl Shilton for some time. In addition, there are no allocated or available development sites.
9.1.9 Demand for future employment development in the SUEs is likely to be restricted to smaller industrial units (spanning B1, B2 and B8 use classes). We see little interest forthcoming for offices or for larger distribution units. Greatest demand is likely to be for units in the range from 100 to 1,500 sqm.
9.1.10 There will be some demand from existing occupiers in Barwell and Earl Shilton, with quality of accommodation being a particular driver. However, it is often the case that occupiers will downsize when they move given the greater efficiencies of modern floorspace with good eaves height.
9.1.11 In addition, some demand may be drawn from Leicester, where the level of industrial floorspace can be constrained, and the rural hinterland.
54 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
9.1.12 Overall, we consider that Barwell and Earl Shilton, even though being significantly extended, will possess only a local, rather than a strategic, market draw. This will limit the level and quality of development.
9.2 Quantum of Development
9.2.1 We have considered this in two ways. The first is purely market based and is our preferred method. The second considers the generation of land required to serve the new residents of the two SUEs as a basis (as derived by the Experian study) and has been used as a check.
Market Basis
9.2.2 The view of local agents, and shared by us, is that take-up of new industrial floorspace will be between 1,000 and 2,000 sqm per annum for each SUE for the lifetime of each project.
9.2.3 If we assume each project is 13 years long (ie 2013 to 2026), then this will generate a need as follows for each SUE depending on the rate of development:-
Table 10 - Range of Potential Rate of Development
Rate of Development (sqm pa) Total Development Development Land (sqm) Required (ha)
1,000 13,000 3.25
1,500 19,500 4.875
2,000 26,000 6.50
9.2.4 We have assumed a 40% development plot ratio. This is fairly standard for modern industrial accommodation.
9.2.5 Our view is that Barwell has been a much stronger pitch, contains much more existing stock, and will attract towards the higher rate of development (ie 6.5ha). Earl Shilton has been a much weaker pitch. However, the recently completed A47 bypass will improve its offer and we consider that it may attract towards the median rate of development (ie 4.9 ha).
9.2.6 Neither Barwell or Earl Shilton have been recognised pitches for offices. Nor do we see significant demand being attracted by this sector. However, if market confidence does not return to previous levels, there may be some limited scope for a small courtyard scheme in the employment area for Earl Shilton, given its prominence to the A47 bypass. This scheme would be no greater than 2,000 m² and would require 0.5 hectares. This would be additional to the development land for industry and warehousing (4.9 ha) for Earl Shilton.
55 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
Employment Land Need to Serve Residents
9.2.7 The Experian study considers that the two SUEs, collectively, will generate a need for 9 hectares of industrial and warehouse land to serve its increased population. This is based on the assumption of 4,500 houses. However, closer to 4,000 houses are actually proposed. At this lower level of development, we have calculated the actual need will be lower at about 8 hectares.
9.2.8 Making allowance for the respective levels of proposed housing for the two SUEs, this breaks down to 5 hectares for Barwell and 3 hectares for Earl Shilton. In addition, there is a need for 4,875 m² of offices that will require just over 1 hectare of land, although we consider this unrealistic in market terms.
9.2.9 The Experian Study emphasises that this is the employment land element required to serve the new residents of the SUEs. It is not the total provision. However, we consider the total provision will be limited by the particular market characteristics of the two settlements. We consider that Barwell and Earl Shilton will only ever have a limited local draw and that the need identified by the Experian Study will form a substantial core to what the market is ever likely to deliver.
9.2.10 Additional demand is most likely to be latent and come from companies already located in the area, particularly in Barwell and Earl Shilton. We see potential for relocation from existing dated stock, particularly in the earlier phases. However, as referred to above, the level of floorspace take is likely to be less than currently occupied, due to greater efficiencies of modern premises.
9.2.11 We have made a further allowance for latent demand from displacement of existing industrial land that will be released. We have assumed 50% of Grade C land (see above). This results in a further 2.1 ha for Barwell and 1.1 ha for Earl Shilton.
9.2.12 Added to the need generated by the increased population, you derive a need for Barwell of industrial and warehouse premises of 7.1 hectares and 4.1 hectares for Earl Shilton. This totals 11.2 ha and is reasonably close to our market based assessment.
56 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
Summary
9.2.13 The two approaches are summarised by Table 11.
Table 11 – Projected Quantum of Development
Market Demand (ha) Employment Land Need (ha)
Barwell 6.5 7.1
Earl Shilton 4.9 4.1
Offices 0.5 1.2
Total 11.9 12.4
9.2.14 We favour the market based assessment as we struggle to see a development rate exceeding 2,000 m² and 1,500 m² for Barwell and Earl Shilton respectively over such a sustained period and see only very limited scope for offices.. On this basis, we would recommend a maximum land use budget of:-
Barwell - 6.5 hectares Earl Shilton – 5.4 hectares (including 0.5 ha for an office courtyard scheme).
9.2.15 This combines to give a total of 11.9 hectares against the 20 to 25 hectares projected by PACEC. This is far more reflective of the local, rather than strategic, market that corresponds to Barwell and Earl Shilton.
9.3 Quality of Development
9.3.1 As referred to above, we see virtually all the land being built out for standard industrial accommodation in terraces of small to medium sized units of between 100 m² to 1,500 m². These will cater for industrial, warehouse, trade and some offices (probably out of converted industrial floorspace).
9.3.2 In addition, there may be very limited potential for offices. However, we do not see this at the level identified by Experian (ie circa 4,900 m²). Instead, what demand that exists will be for units from 100 m² to 300 m² in a courtyard scheme of 2,000 m².
57 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
9.4 Location
9.4.1 The suggested location for Earl Shilton by Capita Lovejoy is suitable. The employment land would enjoy the prominence of the A47 bypass and a reasonably direct access to this road.
9.4.2 Earl Shilton would be favoured for any office development, as it holds a greater stock, relates to Leicester and would benefit from the prominence to the A47. Offices could be developed in a courtyard or as suites as part of the employment area for the Earl Shilton SUE.
9.4.3 For Barwell, we do not consider the proposed site buffering Carousel Park to be particularly attractive for employment. The site at the southern end of the site is much more attractive. It is much better related to the A447 and existing employment areas in Hinckley and Barwell (ie Mill Street I/E). The optimum location would be fronting onto the A447.
9.5 Specification
9.5.1 We refer to the general specification requirements for industrial and warehouse buildings in Paragraph 5.3.2. For industrial warehousing property for the Barwell and Earl Shilton SUEs, the following specification requirements will be important:-
Small to medium sized units (1,000 m² to 1,500 m²)
Clear span portable frame
6m internal eaves height
10 to 15% offices
Dedicated parking and servicing
Full range of B Class uses.
9.5.2 For offices, the principal requirements will be:-
Small sized units of between (100 m² to 300 m²)
Two storey build with pitched roof (with maximum height of 7m to pitch)
Front door accommodation in a courtyard arrangement.
Sufficient car parking levels at 1 space per 30 m²
Raised floors and suspended ceilings
Sufficient energy rating.
58 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
9.6 Delivery
9.6.1 Delivery of small units is difficult at the moment. In a good market, small to medium sized units would be built speculatively in phases. However, there is no speculative market at the moment and market sentiment suggests it will not return for some time.
9.6.2 If sufficient confidence has returned by 2013 (the projected start of the SUEs), then we could see phases built speculatively of up to 2,000 m² for each SUE in terraces easily divisible to accommodate smaller enquiries. If the speculative market has not returned then delivery of phases of development will require pre-lets or pre-sales of at least 50% of the floorspace of each phase.
9.6.3 The prospects for deliverability will be greatly enhanced if development land is serviced (ie with access and full services provides to the land from the main estate road) and presented to the market. In addition, the masterplans should seek to ensure that the designated areas are not fettered by other uses (particularly housing).
9.7 Values
9.7.1 Our view on rents, freehold prices, yields and land prices for industrial property in Hinckley and Burbage are given in Paragraph 6.7.4. These assume a return to normal market conditions that were apparent before the pre-peak levels of 2005 and 2006 and the subsequent economic recession . For Barwell and Earl Shilton, we consider that the lower end of the spectrum could be achieved when normal market conditions return. These are:-
Rents
- £5.25 per ft² for units less than 10,000 ft² (1,000 m²)
- £4.75 per ft² for units greater than 10,000 ft² (1,000 m²)
Freehold Sales
- £75 per ft²
Yields
- 7.5% on the basis of a 15 year FRI lease
Land Prices at £200,000 per net developable acre.
9.7.2 For offices, it is very difficult to predict likely rents, freehold sales and yields given that no market exists for Barwell and Earl Shilton. Nor do we consider it particularly likely that offices will be demanded at this location. However, if they are, we think that they will generate development land prices similar to industrial and warehousing.
59 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
10 Conclusions and Recommendations
10.1.1 The Core Strategy allocation of 25 hectares of employment land, to be split 15 hectares to Barwell and 10 hectares to Earl Shilton, is derived principally from the Leicester and Leicestershire HMA Employment Land Study of 2008. This study was prepared in a different economic climate and takes a generic approach to the level of employment land to serve SUEs in the County.
10.1.2 The 2008 study has not taken specific account of the particular market drivers for Hinckley and Bosworth, nor the more local need and characteristics of demand and supply for employment premises in Earl Shilton and Barwell. The gap analysis undertaken for Hinckley and Bosworth in the study does not support or identify a particular need for significant, strategic scale allocations of employment land to serve either Earl Shilton or Barwell.
10.1.3 Barwell and Earl Shilton does not possess a particularly strong pitch for employment premises. This is evidenced by the mostly dated stock of industrial and warehouse premises and the lack of recent development. Neither holds any current attraction for offices.
10.1.4 Barwell and Earl Shilton are well related to Hinckley, the surrounding rural hinterland and Leicester to the east. This will attract demand. However, its scope will be limited by their relative inaccessibility to the national motorway network (compared to Hinckley and Burbage and Leicester) and the lack of any obvious growth sectors or business clusters to build on.
10.1.5 The new A47 bypass presents an opportunity, particularly for the Earl Shilton SUE, but will not be sufficient to attract large footloose enquiries in the regional distribution market. Instead, the principal source of market interest will be from latent demand from existing occupiers in Barwell and Earl Shilton, and its hinterland.
10.1.6 The labour available from the SUEs are a further opportunity. However, this factor will not on its own manage to override the inherent strengths and weaknesses of this particular location.
10.1.7 The principal threat is the current economic conditions. Market confidence is very weak and this is stalling any speculative development. Until market conditions improve significantly, this will impact upon delivery.
10.1.8 A further threat is obviously better located employment development land in Hinckley and Burbage and further afield (eg the Strategic Employment Site at Lubbesthorpe).
10.1.9 For these reasons, we do not see the pitch of Barwell and Earl Shilton to be stratetic or sub- regional. Instead, its principal purpose will be to serve and improve local markets.
10.1.10 Demand for industrial and warehouse units will be mainly for small and medium size units, ranging typically from 100 m² to 1,500 m². The rate of development is likely to range from 1,000 to 2,000 m² per year for each SUE. Assuming the lifetime of the development will coincide
60 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
roughly with the housing development (ie 13 year period), we project a total build for each SUE ranging from:-
low - 13,000 m² (1,000 m² per annum);
medium - 19,500 m² (1,500 m² per annum); and
high - 26,000 m² (2,000 m² per annum).
10.1.11 Barwell has been a much stronger pitch for industrial and warehousing, suffering little vacancy, and is better related to Hinckley. On this basis, it could attract up towards the higher rate of development. At a standard of 40% development plot ratio, this will derive a land take of up to 6.5 hectares of land.
10.1.12 Earl Shilton has been a much weaker pitch, contains a much smaller core of industrial and warehouse property and has proportionately less occupancy. However, the new A47 should help to improve its offer and it may attract up towards the medium rate of development. This will derive a land take of up to 4.9 hectares of land.
10.1.13 We see only a very limited scope for offices. Hinckley is not a strong or coherent pitch and Earl Shilton and Barwell are not recognised locations for office developments. If good market conditions return, then there may be demand for small units of between 100 m² to 300 m² in a single phase courtyard scheme of 2,000 m². This will require a land take of 0.5 hectares and will best be suited in the Earl Shilton SUE trading off the prominence of the new A47 bypass.
10.1.14 The draft March 2010 Experian Study – Sustainable Urban Extensions – Housing and Employment Land Study – seeks to account for likely need for employment land derived by the additional population generated from the new housing in the SUEs. Factored for 4,000 houses, it recommends a core allocation of:-
Industrial land – 3.91 hectares
Warehousing – 4.09 hectares
Offices – 4,975 m² (requiring 1.2 hectares at a development plot ratio of 40%).
10.1.15 The proportional split for Barwell and Earl Shilton, based on projected housing levels, will be 5 hectares and 3 hectares of industrial and warehouse land respectively. Making a further allowance for latent demand from displacement of existing industrial land at a local level would derive an additional need of 2.1 hectares for Barwell and 1.1 hectares for Earl Shilton. This would generate a total need of 7.1 hectares of industrial and warehousing land in Barwell, a corresponding 4.1 hectares for Earl Shilton, and 1.2 hectares of land for offices.
61 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
10.1.16 The two approaches are summarised in Table 12
Table 12 – Projected Quantum of Development
Market Demand (ha) Employment Land Need (ha)
Barwell 6.5 7.1
Earl Shilton 4.9 4.1
Offices 0.5 1.2
Total 11.9 12.4
10.1.17 We favour the market based assessment as we struggle to see a development rate exceeding 2,000 m² and 1,500 m² for Barwell and Earl Shilton respectively over a such a sustained period and see only very limited scope for offices. On this basis, we will recommend a maximum land use budget of:-
Barwell – 6.5 hectares.
Earl Shilton – 5.4 hectares (including 0.5 hectares for an office courtyard scheme).
10.1.18 This combines to give a total of 11.9 hectares against the 20 to 25 hectares projected by PACEC. We consider this is far more reflective of the local, rather than the strategic, market that corresponds to Barwell and Earl Shilton.
10.1.19 The suggested location for employment land at Earl Shilton is suitable. The employment land at this location would enjoy the prominence of the A47 bypass and a reasonably direct access to this road.
10.1.20 Earl Shilton would be favoured for any office development, as it holds a greater stock, relates to Leicester, and would benefit from the prominence to the A47.
10.1.21 For Barwell, we do not consider the proposed site buffering Carousel Park to be particularly attractive for employment. The site at the southern end of the site is much more attractive. It is better related to the AA47 and existing employment areas in Hinckley and Barwell (ie Mill Street Industrial Estate). The optimum location would be fronting on to the A447.
62 Prospect Leicestershire Limited Earl Shilton and Barwell Employment Land Assessment
10.1.22 Delivery of small units is difficult at the moment. In a good market, small to medium size units would be built speculatively in phases. However, there is no speculative market at the moment and market sentiment suggests it will not return for sometime.
10.1.23 If sufficient confidence has returned by 2013 (the predicted start of the SUEs), then we would see phases built speculatively of up to 2,000 m² for each SUE in terraces easily divisible to accommodate smaller enquiries. If the speculative market has not returned, then delivery of phases of development will require pre-lets or pre-sales of at least 50% of the floorspace of each phase.
10.1.24 Finally, the prospects for deliverability will be greatly enhanced if development land is serviced (ie with access and full services provided to the land from the main estate road) and presented to the market. In addition, the masterplan should seek to ensure that the designated areas are not fettered by other uses (particularly housing).
10.1.25 We conclude that these reduced levels of employment land are far more realistic and, therefore, deliverable. As such, we recommend that this revised assessment is taken into account as evidence in the production of the Area Action Plan for Earl Shilton and Barwell SUEs.
Peter J Leaver Partner King Sturge LLP
Tel: 0121 200 7164 (Direct) Fax: 0121 236 2563 (Direct) Mob: 07970 611236 (Mobile) [email protected]
63
King Sturge LLP 45 Church Street Birmingham B3 2RT
T +44 (0)121 233 2898 F +44 (0)121 236 2563 www.kingsturge.com
EARL SHILTON AND BARWELL EMPLOYMENT LAND ASSESSMENT PROSPECT LEICESTERSHIRE LIMITED APPENDICES
29 November 2010 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
Appendices
APPENDIX 1 Masterplan Options for Barwell Sustainable Urban Extension APPENDIX 2 Masterplan Options for Earl Shilton Sustainable Urban Extension APPENDIX 3 King Sturge Industrial and Distribution Floor Space Today Survey, September 2010 APPENDIX 4 Note of Interview with the Economic Development Officer for Hinckley and Bosworth Borough Council APPENDIX 5 Tables of Vacant Industrial Property for Hinckley, Barwell and Earl Shilton APPENDIX 6 Tables of Vacant Office Property for Hinckley and Barwell APPENDIX 7 Employment Land Availablity Schedules from March 2006 to March 2010, Hinckley and Bosworth Borough Council APPENDIX 8 Marketing Details for Tungsten Park, Hinckley
APPENDIX 9
Marketing Details for the Atkins Building
APPENDIX 10 Summary of Employment Land Availability as at 31 March 2010, Hinckley and Bosworth Borough Council APPENDIX 11 Table of recent deals for Industrial and Office Space in Hinckley APPENDIX 12 Extract from 2001 Adopted Local Plan Proposals Map APPENDIX 13 Communications Plan Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 1 MASTERPLAN OPTIONS FOR BARWELL SUSTAINABLE URBAN EXTENSION
Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 2 MASTERPLAN OPTIONS FOR EARL SHILTON SUSTAINABLE URBAN EXTENSION
Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 3 KING STURGE INDUSTRIAL AND DISTRIBUTION FLOOR SPACE TODAY SURVEY, SEPTEMBER 2010 IndustrialIndustrial && DistributionDistribution FloorspaceFloorspace TodayToday
September 2010
IDFT INDUSTRIAL & DISTRIBUTION FLOORSPACE TODAY
Executive summary “Welcome to the
• Available industrial floorspace in Great Britain turned downwards for the first September 2010 edition of time in five years during the opening half of 2010. Tentative improvements in Industrial and Distribution occupier demand coupled with slowing rates of release of secondhand stock, resulted in a decline in total floorspace available. Floorspace Today • At the end of June 2010, availability totalled 23.791 million m² representing This publication reports on the latest a decrease of 0.6% since December. Whilst only a small reduction, it signifies a turning point in the current supply cycle and suggests that overall industrial trends in the UK industrial market vacancy is now beginning to stabilise. across Great Britain. Published twice • The Midlands recorded the largest reduction in available floorspace during a year in March and September, the first half of 2010, as a number of big shed distribution transactions created a notable dent in the overhang of supply. it presents our latest survey of • The availability of new floorspace contracted by a further 14.0%, or 439,000m², availability, speculative development in the six months to June 2010. New units now represent 11.3% of the overall and prime rents for every region. Our available stock in Great Britain. industrial floorspace survey has been • Improved demand for the new big shed sector, and a slowdown in the return published since 1975 and provides of secondhand big sheds, caused total availability in large buildings to fall. At the end of June 2010 there was 8.060 million m² available in units of 10,000m² and an invaluable time series of industrial over, representing a decrease of 2.2% since December. market data. • In the big box distribution market, the supply of new units over 10,000m² fell by 288,190m² during the first half of 2010, with availability now 39% lower than Our latest survey shows industrial its peak in March 2008. supply declining for the first time in • During the recent recession, occupier take-up for new units over 10,000m² five years and with the UK economic slumped to a 15-year low in terms of floorspace transacted, but since the weakest period of demand during the first half of 2009, take-up levels have shown steady recovery now gaining momentum, improvement. the market outlook is becoming more • With development finance remaining relatively scarce, speculative starts positive. However, with expectations are still rare, but an increase on the levels recorded in January suggests signs of a subdued and fragile recovery, of a tentative uplift in developer confidence. An increase of 15% compared with January, brings the total under construction at the end of July, to 96,498m² across occupiers and investors are likely 48 schemes. to remain cautious over the next • The UK economic recovery accelerated much faster than expected during the six months and it will take time for second quarter of the year (GDP growth of 1.1%), marking the third quarter of positive growth. Whilst recent indicators have given a welcomed boost to the market confidence to return. economy, expectations remain cautious with the recovery set to be subdued and fragile. If you require further information on • According to the IPD Quarterly Index, average industrial rental values this publication, or have a specific continued to fall in the first half of the year, although the rate of decline eased. query relating to industrial property Rents contracted by 1.1% in the first six months of 2010 and forecasts indicate an overall decline in industrial rental values of 2.1% this year, followed by 0.4% markets, please do not hesitate to in 2011. contact me or one of my colleagues at King Sturge. Regional agency contacts are detailed on the relevant pages and on the inside back cover of the report.”
AnnaA Behan IndustrialI Research
1 King Sturge: Industrial & Distribution Floorspace Today
Overview The return of secondhand large buildings to the market has slowed and the improved take-up in the new big shed sector, has Availability caused total availability in large buildings to fall. At the end of June there was 8.060 million m² available in new and secondhand units The total level of available supply turned downwards for the over 10,000m², representing a decrease of 2.2% since December first time in five years during the opening half of 2010, following and the first significant depletion of large stock since the end of a prolonged trend of rising industrial availability in Great Britain, 2005. Whilst the supply of secondhand big sheds has been on an lasting for nine consecutive surveys. Tentative improvements upward trend since mid 2008, the increase in the past six months in occupier demand, coupled with slowing rates of release of was very modest. The big shed distribution section at the back secondhand stock, resulted in a decline in total floorspace available. of the publication, looks more closely at the market for new units over 10,000m². At the end of June 2010, availability totalled 23.791 million m², representing a decrease of 0.6% since December. Whilst only a Speculative development small reduction, it signifies a turning point in the current supply cycle and suggests that overall industrial vacancy is now beginning Following three years of declining levels of development, and to stabilise. an 18-month low of speculative completions, there has been a modest increase in the level of floorspace under construction. With development finance remaining relatively scarce, speculative Chart 1: Available industrial floorspace starts are still rare, but an increase on the levels recorded in January 25 suggests signs of a tentative uplift in developer confidence. England & Wales Scotland 20 With an increase of 15% compared with January, a total of 96,498m² was under construction at the end of July across 48
2 schemes. 15 Chart 3: Speculative floorspace under construction
million m 10 1,600 140 floorspace m2 No. of schemes 5 1,400 120 1,200 100 0 1,000 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 800 Source: King Sturge Research Excludes units below 500m2. 60 600 Surveys taken in April, August & December. As from 2005, the surveys are taken in June 40 and December. 400 Floorspace (thousands m²) 200 20 Regionally, the most significant changes in supply were recorded in the Midlands, where availability contracted by 8.6% in the East 0 0
Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 and 3.5% in the West. The Midlands witnessed a number of large Jan-01May-01Sep-01Jan-02May-02Sep-02Jan-03May-03Sep-03Jan-04May-04Sep-04Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 distribution transactions over the first six months of the year, creating a notable dent in the overhang of supply. Source: King Sturge Research The South East and East Anglia also contributed to declining floorspace, with 0.1% and 1.0% less supply available in June The highest levels of development were recorded in the North respectively. The remaining regions recorded only modest West which accounted for 17.5% of the total for GB, followed by increases in availability, with the exception of Wales where supply the South West and the South East contributing 15.6% and 15.4% was 5.4% higher at mid-year. respectively. Chart 4: Speculative floorspace under construction by region at Chart 2: New space as a percentage of total availability July 2010 18% 2.3% 16% 2.9% North West South West 14% 3.4% 17.5% 3.8% South East 12% 3.9% Scotland 10% 8.7% East Midlands 8% 15.6% East Anglia 6% 11.3% Yorkshire & Humberside 4% West Midlands 15.4% North 2% 15.3% Greater London 0% Wales
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: King Sturge Research Source: King Sturge Research The economy The availability of new floorspace peaked at the end of 2008 (at The UK economic recovery accelerated much faster than expected 3.523 million m² or 15.5% of the total supply) and fell by a further during the second quarter of the year, marking the third quarter of 14.0% during the first half of 2010, with development remaining positive growth. Whilst recent indicators have given a welcomed very constrained. As occupiers took advantage of preferential boost to the economy, expectations remain cautious with the terms offered on new stock, supply contracted by 439,000m² in recovery set to be subdued and fragile. the six months to June, to 2.694 million m². This is comparable to levels at mid 2007 and new space now represents only 11.3% of The latest estimate for GDP in Q2 showed surprisingly robust the overall available stock in Great Britain. growth of 1.1%, which was twice as strong as forecast, but
2 Table 1: Industrial property market availability (million m²) as at June 2010 Availability (million m²) Availability percentage change as at June 2010 on December 2009 Total New Large Total New Large England & Wales 21.426 2.626 7.294 -0.8 -13.8 -2.7 Scotland 2.365 0.068 0.766 1.8 -22.1 2.6 Great Britain 23.791 2.694 8.060 -0.6 -14.0 -2.2 North 1.438 0.162 0.408 0.7 -17.0 3.2 North West 2.813 0.473 1.178 0.7 -5.2 4.8 Yorkshire & Humberside 2.882 0.631 1.186 0.3 -9.5 3.7 East Midlands 1.838 0.347 0.822 -8.6 -21.9 -20.8 West Midlands 3.602 0.336 1.359 -3.5 -20.0 -7.5 East Anglia 0.520 0.083 0.145 -1.0 -4.5 9.8 South West 1.478 0.121 0.455 0.2 -10.5 4.3 Wales 1.599 0.039 0.598 5.4 -16.4 -5.9 South East 5.256 0.434 1.145 0.2 -16.7 1.8 - Greater London 1.839 0.154 0.280 0.7 -14.5 3.5 - Rest of South East 3.417 0.280 0.865 -0.1 -17.9 1.3
Premises below 500 m² excluded with a surge in the notoriously volatile construction sector largely the fragile state of the UK banking sector, but many commentators responsible for the buoyancy. As a result, many anticipate that this expect hikes to begin in earnest early next year. figure could be revised downwards in subsequent releases and that growth at this rate is unlikely to be sustained over the coming As a result of the radical spending cuts and fiscal policies, GDP quarters. forecasts have been revised downwards, with growth of 1.1% expected this year, followed by a revised 2.1% in 2011. However, The strength of GDP was still a surprise in a quarter dominated with the strong rebound in GDP during Q2, these forecasts may by the General Election. The emergence of a Liberal-Conservative be revised upwards in coming months. Coalition after an inconclusive May poll, eased fears about policy drift and uncertainty. However it also brought with it an As the economic recovery gets underway, albeit at modest pace, aggressive programme of spending cuts and tax increases in a the outlook for the industrial sector is more positive. The market June Emergency Budget that was tougher than many expected. remains difficult and occupiers are cautious, but demand is expected The new Chancellor introduced an additional £40 billion of fiscal to gradually improve as the economy gathers momentum. With tightening, with aims to bring the current budget back to balance national supply now stabilising and speculative development very by 2014/15. This was generally welcomed by markets, though constrained in the foreseeable future, the availability of new and there remain concerns that the spending cuts are so severe that good quality stock is rapidly diminishing. The return of secondhand they may hit the economic recovery, acting as too severe a drag stock has also now slowed, so in some regions the market is on growth over the next 12 months. becoming increasingly favourable to landlords and developers.
The UK Purchasing Managers Index (PMI), a lead indicator of Prime headline rents have generally remained stable across the economic activity, highlights that the strong rebound in economic country, but have been largely propped up by generous incentive output may subsequently soften. Figures for the service, packages on offer. In areas with supply side constraints, these manufacturing and construction sectors all weakened, with many incentives are now tightening and if occupier demand continues businesses citing the looming public sector cuts as likely to hinder to improve, some upward movement in rents could be seen in future orders. However, the manufacturing sector is holding up selective locations towards the year-end. best, with increases in new orders resulting in a still healthy, expanding, PMI reading. According to the IPD Quarterly Index, average industrial rental values continued to fall in the first half of the year, although the Business failures have continued to slow, since the most dramatic rate of decline has eased, and 2009 is likely to mark the bottom of fallout recorded at the beginning of 2009. The number of company the rents cycle. Rents contracted by 1.1% in the first six months insolvencies as reported by the Insolvency Service, showed 20% of 2010 and our central forecast indicates an overall decline in fewer compulsory liquidations within England & Wales during the industrial rental values of 2.1% this year, followed by 0.4% in second quarter compared with the same time last year. 2011. Positive rental growth is not expected to return until 2012, albeit at a modest rate of 0.5%. Labour market figures are also encouraging. In the three months Chart 5: GDP Growth, 1990 - Q2 2010 to June, unemployment edged down to 7.8% of the workforce 6 6 with 49,000 fewer people looking for work than in the previous 5 5 three months. This continues the downward drift in jobless figures 4 4 since the start of 2010. 3 3 2 2 Outlook 1 1 The Bank of England has held interest rates at the historic 0 0 low of 0.5% since March last year, but as recovery proceeds, -1 -1 attention will increasingly turn to the outlook for monetary policy. -2 -2 -3 -3 Speculation about the timing of a rise in interest rates is increasing. -4 -4 All measures of inflation have risen since the end of 2009 but this -5 Quarterly growth % Annual growth % -5 largely reflects the effects of last year’s interest rate cuts and VAT -6 -6 rises. These effects should fade, though inflation is expected to -7 -7 remain fairly high over the coming months. Therefore, a move to raise interest rates is not yet justified by economic figures, or by 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: ONS
3 King Sturge: Industrial & Distribution Floorspace Today
SCOTLAND
NORTH
YORKS & HUMBERSIDE
NORTH WEST
EAST MIDLANDS
WEST EAST MIDLANDS ANGLIA
WALES
LONDON
SOUTH EAST SOUTH WEST
*The King Sturge data in this report are based on the Standard Statistical Regions as shown above. IPD investment performance data quoted in this report are based on Government Office Regions.
4 TOTAL GB INDUSTRIAL MARKET
Greater London 6
South East 7
East Anglia 8
South West 9
Wales 10
East Midlands 11
West Midlands 12
North West 13
Yorkshire & Humberside 14
North 15
Scotland 16 King Sturge: Industrial & Distribution Floorspace Today
Greater London Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Heathrow 140.00 140.00 Within Greater London, total available floorspace increased by Park Royal 121.10 121.10 0.7% (13,185m²) in the six months to the end of June, to reach a Stratford 94.20 94.20 total of 1.839 million m² at the middle of the year. Bromley-by-Bow 94.20 94.20 The availability of large buildings over 10,000m² increased by 3.5% Croydon 88.80 88.80 (9,404m²) in the same period, to 279,801m² at the end of June. Assumes minimum of 1,000m². Large buildings accounted for 15.2% of Greater London’s available stock. Investment market performance The industrial market in Greater London produced a total return Available new floorspace decreased by 14.5% (26,147m²) in of 8.0% over the first half of 2010, according to the IPD Quarterly the first half of 2010 to 153,987m². This is the lowest level of Index and 26.4% in the year to June; the strongest returns new floorspace since December 2006. At the end of June, new recorded across all GB regions. floorspace accounted for 8.4% of Greater London’s available stock. Capital values increased by 4.7% in the first half of the year and Over the 12 months to June 2010, available floorspace in Greater were 18.3% higher over the 12 months to June. London increased by 3.4% (60,843m²). According to the IPD Index, rental values fell by 0.1% over the first The availability of large buildings over 10,000m² decreased by half of 2010; the smallest rental decrease across all GB regions, 1.8% (5,262m²) over the year to June. with a fall of 0.6% recorded over the year to June.
Available new floorspace decreased by 24.9% (51,179m²) between We believe that prime yields in Greater London have remained June 2009 and June 2010. stable for multi-let properties over the past six months, whilst distribution yields have softened. At June yields were between 6 Greater London availability - last 10 years and 6¼% for multi-let estates and 6¼ to 6½% for large distribution 2.0 Secondhand floorspace New floorspace properties. 1.8 1.6 Greater London market performance indicators Jun 05 - Jun 10 1.4 260 Total return 2 1.2 240 Capital growth 1.0 220 Rental value growth
million m 0.8 200 0.6 180 0.4 160 0.2 140 0.0 120 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 100 Source: King Sturge Research Index value December 2000 = 100 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Speculative development 05 05 06 06 07 07 08 08 09 09 10 The level of speculative development under construction within Source: IPD Greater London has been on a steep downward trend since mid 2007, with no schemes under construction speculatively at the Greater London agency comment beginning of the year. At the end of July however, there was an increase in development, with one small scheme of 2,787m² “Enquiry levels are still continuing to increase steadily with under construction, and there are a number of proposals in the clear evidence that with the gradual take-up of the better quality pipeline which are expected to start early next year. buildings two factors are arising. Firstly, whilst tenants are still able to command significant incentive packages in exchange Greater London speculative floorspace under construction for sensible lease terms, in certain areas, where supply is 180 16 becoming limited, landlords are now clearly starting to rein in 2 Floorspace m No. of schemes those incentives and this will continue during the remainder 160 14 of 2010 on a larger scale. Secondly the level of speculative
) 140 2 12 development will begin to rise with a number of modest 120 10 schemes close to starting, stimulated by increasing occupancy 100 8 levels and continuing demand. The market has some way to 80 go but there are some positive signs of improving occupier 6 60 confidence in the Greater London industrial markets.” Floorspace (000s m 40 4 20 2 Andy Harding, Partner (London) 0 0 020 7087 5310, [email protected] Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
6 The South East Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Slough 121.10 121.10 In the South East, outside of London, total available floorspace Basildon 75.35 75.35 decreased for the first time in two years, by 0.1% (3,075m²) over the first half of 2010. At the end of June there was a total of 3.417 West Thurrock 75.35 - 80.70 75.35 - 80.70 million m² available. Dartford 80.70 - 83.40 80.70 - 83.40 High Wycombe 91.50 91.50 Floorspace in large buildings of over 10,000m² increased by 1.3% Assumes minimum of 1,000m². (11,371m²) to 865,128m², representing 25.3% of the region’s total available stock. Investment market performance Available new floorspace decreased by 17.9% (60,960m²) in the The industrial market in the South East produced a total return of six months to the end of June, with new space accounting for 6.8% in the first half of 2010, according to the IPD Quarterly Index, 8.2% of the region’s total available stock. with an annual return of 20.0% for the year to June.
Over the year to June 2010, available floorspace in the South Capital values in the first half of the year increased by 2.9% with East increased by 0.5% (16,732m²), which is the smallest annual an annual increase of 11.1% over the 12 months to June. increase across all regions. According to the IPD Index, rental values fell by 1.4% in the first Availability in large buildings over 10,000m² increased by 7.7% six months of the year and were 3.7% lower over the 12 months (61,969m²) over the 12-month period. to June.
New floorspace availability decreased by 25.2% (94,670m²) over We believe that prime yields in the South East have remained the 12 months to the end of June 2010. stable for multi-let properties over the past six months, whilst distribution yields have softened. At June yields were between 6 South East availability - last 10 years and 6¼% for multi-let estates and 6¼ to 6½% for large distribution 4.0 properties. Secondhand floorspace New floorspace 3.5 South East market performance indicators Jun 05 - Jun 10 3.0 260 Total return
2 240 2.5 Capital growth 220 2.0 Rental value growth 200 million m 1.5 180 1.0 160 0.5 140 0.0 120 9 2001 2002 2003 2004 2005 2006 2007 2008 200 2010 100 Index value December 2000 = 100 Source: King Sturge Research 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 05 05 06 06 07 07 08 08 09 09 10 Speculative development Source: IPD The level of industrial floorspace under construction on a speculative basis within the South East has increased by 12% since our previous survey. At the end of July 2010 there was a South East agency comment total of 14,835m² under construction across six schemes, the “Industrial occupier demand within the South East improved largest of which comprises 4,170m² and is due for completion in September. There are a number of schemes where construction further over the first half of 2010, with a steadily increasing has been put on hold, but as new supply becomes increasingly level of enquiries and transactions within both large and smaller limited in the region, construction is expected to recommence on units. New floorspace continues to decline causing a shortage the majority of these schemes towards the end of the year. of good quality product, and occupiers are now experiencing a severe lack of this space particularly in the core industrial areas. South East speculative floorspace under construction With limited new speculative development underway, there is 300 30 now more design and build activity and pre-let development will Floorspace m2 No. of schemes continue to increase.” 250 25 ) 2 200 20 Tim Johnson, Head of International Industrial Agency 020 7087 5300, [email protected] 150 15
100 10 Floorspace (000s m 50 5
0 0 Jan-MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
7 King Sturge: Industrial & Distribution Floorspace Today
East Anglia Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Peterborough 53.82 53.82 Following a significant increase in availability in our last survey, Huntingdon 53.82 53.82 supply in East Anglia decreased by 1.0% (5,308m²) over the first Norwich 51.13 51.13 half of 2010, to reach a total of 519,590m² at the end of June. Ipswich 51.13 51.13 However, availability in large buildings increased by 9.8% Assumes minimum of 1,000m². (12,908m²) over the six months, to 144,643m². At the end of June, large buildings accounted for 27.8% of the region’s available stock. Investment market performance The industrial market in the Eastern region produced a total return Available new floorspace decreased by 4.5% (3,966m²) over of 7.2% in the first half of 2010, according to the IPD Quarterly the same period, to 83,318m², and accounted for 16.0% of East Index and 21.4% in the year to June. Anglia’s total supply at mid year 2010. Capital values in the first half of the year increased by 3.5% with Over the year to June 2010, available floorspace within East Anglia an annual increase of 12.8% for the year to June. increased by 9.9% (46,973m²). According to the IPD Index, rental values decreased by 0.7% in Availability in large buildings over 10,000m² decreased by 5.3% the first half of the year and were 2.2% lower than the same time (8,019m²) over the 12-month period. a year ago.
New available floorspace decreased by 17.0% (17,018m²) over the We believe that prime yields in East Anglia have hardened to 12 months to June 2010. around 7% for multi-let estates, but softened to 7.25% for large distribution properties. East Anglia availability - last 10 years 0.7 East Anglia market performance indicators Jun 05 - Jun 10 Secondhand floorspace New floorspace 260 Total return 0.6 240 Capital growth 0.5 220 Rental value growth 2 0.4 200 180 0.3 million m 160 0.2 140
0.1 120 100 0.0 Index value December 2000 = 100 9 80 2001 2002 2003 2004 2005 2006 2007 2008 200 2010 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development Speculative development under construction within East Anglia East Anglia/South East contact increased from a very low base, by 74% in the six months since our previous survey. At the end of July 2010 there was a total Tim Johnson, Head of International Industrial Agency of 8,391m² being developed across three multi-unit estates, the 020 7087 5300, [email protected] largest of which comprises 4,837m² and is due for completion at the end of the year.
East Anglia speculative floorspace under construction 70 7 Floorspace m2 No. of schemes 60 6 ) 2 50 5
40 4
30 3
20 2 Floorspace (000s m
10 1
0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
8 South West Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Bristol 78.00 78.00 Within the South West, available floorspace increased by 0.2% Exeter 70.00 70.00 (3,656m²) during the first half of 2010, to reach a total of 1.478 Plymouth 56.50 56.50 million m². Swindon 59.20 59.20 Availability in large buildings over 10,000m² increased by 4.3% Assumes minimum of 1,000m². (18,632m²) in the six months, to 455,039m². At June 2010 this category accounted for 30.8% of the South West’s total supply. Investment market performance The industrial market in the South West produced a total return of Available new floorspace decreased by 10.5% (14.082m²) since 7.6% in the first half of 2010, according to the IPD Quarterly Index our last survey to 120,567m² at June 2010. New floorspace and 22.8% in the year to June. provided 8.2% of the region’s total available stock. Capital values in the first half of 2010 increased by 3.7% with an Over the 12 months to June, available floorspace in the South annual increase of 13.6% for the year to June. West increased by 6.1% (84,690m²). According to the IPD Index, rental values fell by 0.7% in the first Available floorspace in large buildings of over 10,000m² increased six months of the year and were 2.2% lower over the 12 months by 13.6% (54,425m²) in the same period. to June.
New available floorspace fell by 19.2% (28,539m²) in the 12 We believe that prime yields in the South West have remained months to the end of June 2010. stable for multi-let estates, between 7½ - 7¾%, but for distribution properties yields have softened by 25bp to 6¾% at the end of South West availability - last 10 years June. 1.6 Secondhand floorspace New floorspace 1.4 South West market performance indicators Jun 05 - Jun 10 260 1.2 Total return 240 Capital growth 2 1.0 220 Rental value growth 0.8 200
million m 0.6 180
0.4 160
0.2 140 120 0.0 100 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Index value December 2000 = 100 80 Source: King Sturge Research Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 05 05 06 06 07 07 08 08 09 09 10 Speculative development Source: IPD The level of speculative development under construction within the South West has increased by 59% over the past six months. South West agency comment At the end of July 2010, there was 15,031m² under construction across seven schemes, which represents an increase of 5,622m² “Clearly the occupier market remains subdued, but there is still a since January and 15% of the total speculative development for good undercurrent of activity throughout the region, particularly GB. in the larger size range. There are still good deals available for tenants but covenant strength is playing an increasing role in the South West speculative floorspace under construction deals that can be done with landlords being far more cautious 140 14 in their need to reduce void. The freehold market is slowly Floorspace m2 No. of schemes returning but this is partly driven by the complete lack of stock in 120 12 this sector. The continued manufacturing outfall in some areas ) 2 100 10 is resulting in larger industrial premises coming to the market at
80 8 attractive pricing levels, providing good opportunities for owner occupiers. Good quality stock is proving attractive although 60 6 this is partly because speculative development remains very 40 4 constrained.” Floorspace (000s m
20 2 Paul Baker, Partner (Bristol) 0 0 0117 930 5780, [email protected] Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10 Tim Western, Partner (Exeter) Source: King Sturge Research 01392 429305, [email protected]
9 King Sturge: Industrial & Distribution Floorspace Today
Wales Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Cardiff 55.00 53.80 Available floorspace in Wales increased by 5.4% (81,211m²) in the Newport 48.40 48.40 first half of the year, to 1.599 million m² at the end of June, the Swansea 45.75 45.75 largest six-monthly increase across all GB regions. Wrexham/Deeside 48.40 45.75 The availability of large buildings over 10,000m² decreased by Assumes minimum of 1,000m². 5.9% (37,173m²) to 597,585m² at June 2010 to represent 37.4% of Wales’ total available stock. Investment market performance The industrial market in Wales produced a total return of 5.7% New floorspace availability decreased by 16.4% (7,837m²) to in the first half of 2010, according to the IPD Quarterly Index and a total of 39,803m². At June 2010, new floorspace represented 13.1% in the 12 months to June. 2.5% of the region’s total available stock, the lowest percentage share of any GB region. Capital values in the first half of the year increased by 2.1%, with an annual increase of 5.1% for the year to June. Over the 12 months to June 2010, total available floorspace in Wales increased by 8.4% (123,394m²). According to the IPD Index, rental values decreased by 0.1% in the first half of the year and were 2.4% lower over the 12 months Available floorspace in large buildings increased by 7.8% to mid year. (43,173m²) in the 12 months to June 2010. We believe prime yields in Wales have hardened to 8¼% for The availability of new floorspace decreased by 31.4% (18,222m²) multi-let estates and remained stable at 7% for large distribution over this 12-month period. properties.
Wales availability - last 10 years Wales market performance indicators Jun 05 - Jun 10 1.8 260 Secondhand floorspace New floorspace Total return 1.6 240 Capital growth 1.4 220 Rental value growth 1.2 200 2 1.0 180 0.8 160 million m 0.6 140 0.4 120 100
0.2 Index value December 2000 = 100 0.0 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development Wales agency comment The level of speculative development under construction within “The M4 corridor remains the area of strongest demand with Wales has been on a declining trend since July 2007, and this only a small decrease in rental values to date, albeit, masked continued through the first half of 2010. Wales recorded a 66% to a certain extent by the increase in tenant incentives. Within decrease in the amount of floorspace under construction since the Valleys, capital values have dropped markedly however this January, with three small unit schemes totalling 2,198m² being price shift has sparked new occupier demand, particularly in developed at the end of July. The largest scheme comprises the lower and mid Valleys region. Speculative development has 1,394m² and all developments are due to reach practical slowed dramatically.” completion by October.
Wales speculative floorspace under construction Chris Sutton, Joint Managing Partner (Cardiff Office) 60 12 02920 726014, [email protected] Floorspace m2 No. of schemes
50 10 ) 2 40 8
30 6
20 4 Floorspace (000s m 10 2
0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
10 East Midlands Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Northampton 59.20 59.20 The amount of available floorspace in the East Midlands decreased Leicester 59.20 59.20 by 8.6% (173,390m²) in the first half of 2010, to reach a total Derby 56.50 56.50 of 1.838 million m² at the end of the year. This was the largest Nottingham 61.90 61.90 percentage fall in supply across all GB regions. Assumes minimum of 1,000m². Available floorspace in large buildings over 10,000m² fell by 20.8% (215,667m²) over the period, to 821,645m². Large buildings Investment market performance accounted for 44.7% of the total stock available at June 2010; the The East Midlands industrial market produced a total return of largest proportion recorded across all regions. 6.3% in the first half of 2010, according to the IPD Quarterly Index, and 18.2% in the 12 months to the end of June. New supply contracted by 21.9% (97,205m²) in the first half of the year to reach 346,778m². At June 2010, new floorspace accounted Capital values in the first six months of the year increased by 2.4% for 18.9% of the region’s total supply. with an annual increase of 9.6% for the year to June.
Over the 12 months to June 2010, the level of available floorspace According to the IPD Index, rental values decreased by 1.0% in in the East Midlands decreased by 3.9% (73,909m²). the first half of 2010 and were 3.0% lower over the 12 months to the end of June. Availability in large buildings of more than 10,000m² decreased by 20.1% (206,107m²) over the same period. We believe that prime yields in the East Midlands have remained stable at 7½% for multi-let estates, but moved out by 25bp to New available floorspace decreased by 30.5% (152,178m²) 6½% for large distribution properties. between June 2009 and June 2010. East Midlands market performance indicators Jun 05 - Jun 10 East Midlands availability - last 10 years 260 Total return 2.5 240 Secondhand floorspace New floorspace Capital growth 220 Rental value growth 2.0 200 180 2 1.5 160 140
million m 1.0 120 100
0.5 Index value December 2000 = 100 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 0.0 05 05 06 06 07 07 08 08 09 09 10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: IPD Source: King Sturge Research
East Midlands agency comment Speculative development “Market conditions remain difficult but are showing improvement The level of speculative development under construction within the on the previous year. Overall the level of enquiries remain low, East Midlands increased by 6% during the first six months of the however a reduced supply of good quality accommodation is year, with a total of 10,916m² in four schemes under construction now beginning to match the levels of demand. Occupiers are at the end of July. This represents an increase of 652m² since taking advantage of the deals available in the market, whether January, with the largest scheme comprising 8,733m² and due for through discounted pricing or substantial incentives packages. completion in November. The limited availability of funding is impacting on freehold take- East Midlands speculative floorspace under construction up, with some businesses unable to move despite the desire 350 18 to, and reluctant to commit the levels of equity needed to Floorspace m2 No. of schemes 16 satisfy the banks’ loan to value ratios. Much of the new build 300 stock is gradually being taken-up and with limited speculative ) 14 2 250 development we are continuing to see more design and 12 build deals completing, signifying greater levels of occupier 200 10 confidence. Poor quality stock in secondary locations continues 150 8 to struggle compared to modern space along the M1 corridor 6 100 or major industrial estates around the East Midlands’ cities.” Floorspace (000s m 4 50 2 Matthew Smith, Partner (Nottingham) 0 0 01159 082123, [email protected] Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
11 King Sturge: Industrial & Distribution Floorspace Today
West Midlands Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Birmingham 61.90 61.90 In the first six months of the year, availability in the West Midlands Black Country 53.80 53.80 decreased by 3.5% (130,113m²) to 3.602 million m² at the end of Solihull 67.30 67.30 June 2010. Assumes minimum of 1,000 m². Floorspace available in large buildings over 10,000m² decreased by 7.5% (110,933m²) over the first half of the year. At June 2010 Investment market performance there was 1.359 million m² available, representing 37.7% of the The industrial market in the West Midlands produced a total return region’s total available stock. of 7.1% in the first half of 2010, according to the IPD Quarterly Index, and 19.7% over the year to the end of June. The amount of available new floorspace decreased by 20.0% (83,973m²) to 335,693m², equating to 9.3% of the region’s overall Capital values increased by 3.1% in the first six months of the total supply at June 2010. year, with an annual rate of 10.5% over the year to June.
Over the year to June 2010, available floorspace in the West According to the IPD Index, rental values decreased by 2.0% in Midlands decreased by 1.0% (36,996m²). the first half of 2010 and were 5.1% lower, over the 12 months to June. Floorspace available in large buildings over 10,000m² decreased by 10.4% (157,103m²) during the same period. We believe prime yields in the West Midlands have remained stable at 7½% for multi-let estates, but moved out by 25bp to New available floorspace decreased by 23.8% (104,612m²) over 6½% for large distribution properties. the 12 months to the end of June. West Midlands market performance indicators Jun 05 - Jun 10 West Midlands availability - last 10 years 260 Total return 4.0 240 Secondhand floorspace New floorspace Capital growth 220 3.5 Rental value growth 3.0 200 180 2 2.5 160 2.0 140 million m 1.5 120 1.0 100 Index value December 2000 = 100 0.5 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 0.0 05 05 06 06 07 07 08 08 09 09 10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: IPD Source: King Sturge Research
West Midlands agency comment Speculative development “The tentative signs of improvement in the West Midlands The level of speculative development under construction within market demonstrated during the second half of 2009 have the West Midlands has decreased by 69% in floorspace terms gained momentum in 2010. The underlying trend is one of since our previous survey. At the end of July 2010 there was a steady and gradual recovery, although there have been spikes total of 3,704m² under construction across six small unit schemes, of activity where occupiers have either released requirements representing a decrease of 8,220m² since January. which have been on hold through the recession, or continue to take advantage of distressed landlords/developers. The West West Midlands speculative floorspace under construction Midlands market has not been the focus for several of the 350 16 Floorspace m2 No. of schemes major build to suit distribution requirements recently, primarily 300 14 due to the lack of large sites which can accommodate National ) 2 12 250 Distribution Centres in excess of 50,000m². However, the 10 existing stock of new/grey space is diminishing by virtue of the 200 demand for Regional Distribution Centres which are smaller 8 150 with requirements typically more footloose. The secondhand 6 market is perhaps 6–12 months behind the new market. There 100 Floorspace (000s m 4 are positive signs of a recovery but competition between 50 2 landlords is fierce, and rents and incentive packages continue to drive deals.” 0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research Carl Durrant, Partner (Birmingham) 0121 214 9950, [email protected]
12 North West Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months South Manchester 64.60 61.90 Total availability in the North West continued to rise modestly, in Trafford Park 67.30 64.60 the first half of the year, increasing by 0.7% (19,374m²) to reach a Warrington 64.60 61.90 total of 2.814 million m² at the end of June. Liverpool 51.10 51.10
Floorspace available in large buildings over 10,000m² increased by Assumes minimum of 1,000m². 4.8% (53,673m²) to 1.178 million m² in the six months to June 2010. Large buildings accounted for 41.9% of the region’s total Investment market performance supply. The industrial market in the North West produced a total return of 6.2% in the first half of 2010, according to the IPD Quarterly Index, Available new floorspace decreased further, falling by 5.2% and 16.1% in the 12 months to the end of June. (26,191m²) to 472,715m². At the end of June 2010, new floorspace accounted for 16.8% of the region’s total available stock. Capital values in the first half of the year increased by 2.3% with an annual rate of 7.7% over the year to June. Over the year to June 2010, the total level of floorspace available in the North West increased by 1.7% (46,605m²). According to the IPD Index, rental values decreased by 1.5% in the first six months of 2010 and were 3.5% lower over the 12 Floorspace in large buildings over 10,000 m² increased by 7.5% months to June. (82,246m²) over this 12-month period. We believe that prime yields in the North West have remained The amount of new floorspace decreased over the 12 months, stable at around 7% for multi-let estates and 6¾ to 7% for large contracting by 17.3% (98,978m²) since June 2009. distribution properties.
North West availability - last 10 years North West market performance indicators Jun 05 - Jun 10 3.0 260 Secondhand floorspace New floorspace Total return 240 2.5 Capital growth 220 Rental value growth 2.0 200 2 180 1.5 160 million m 1.0 140 120 0.5 100 Index value December 2000 = 100 0.0 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development North West agency comment At the end of July 2010, the level of speculative floorspace under “There has been renewed activity in the highbay warehouse construction within the North West had risen to 16,920m² in eight sector above 25,000m² in the North West over recent months schemes. This represents an increase of 20% (2,895m²) since with ongoing positive interest in many of the remaining January and the region now accounts for the largest share of speculatively built units of a similar size. This is a result of development across all GB regions with 17% of the total. occupiers taking advantage of strong negotiating positions and North West speculative floorspace under construction being opportunistic on both a freehold and leasehold basis in 250 20 order to cover existing and future requirements. There is now Floorspace m2 No. of schemes 18 a shortage of supply in some size ranges, and consequently, 200 16 interest in design and build solutions has increased. Across ) 2 14 other sizebands, enquiry levels have been sporadic although 150 12 there is recent evidence of an upturn in activity. Rental levels 10 are still under downward pressure in locations where there is 100 8 high supply, but in prime areas such as Trafford Park, Warrington 6 and North Manchester, where rents have generally held up, Floorspace (000s m 50 4 tenant incentives have now begun to stabilise. The freehold 2 market for units up to 3,500m² remains difficult, with potential 0 0 purchasers hamstrung by the lack of available finance.” Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research David Brooks, Head of UK & Industrial Logistics Group (Manchester) 0161 238 6239, [email protected]
13 King Sturge: Industrial & Distribution Floorspace Today
Yorkshire & Humberside Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Leeds 61.90 61.90 In the first half of the year, available floorspace in Yorkshire and Doncaster 53.80 53.80 Humberside increased by 0.3% (8,924m²) to reach 2.882 million Hull 53.80 53.80 m² at the end of June 2010. Wakefield 59.20 59.20 Available floorspace in large buildings over 10,000m² increased by Assumes minimum of 1,000m². 3.7% (41,889m²) in the same period, to 1.186 million m². Large units provide 41.2% of the region’s total supply. Investment market performance The industrial market in Yorkshire and Humberside produced a Availability in new buildings decreased by 9.5% (66,336m²) in the total return of 6.1% in the first half of 2010, according to the IPD first half of the year to 631,305m². New floorspace accounts for Quarterly Index, and 14.2% in the 12 months to the end of June. 21.9% of the region’s total supply, the largest percentage share across all GB regions. Capital values in the first half of the year increased by 2.5% with an annual rate of 6.5% over the year to June. Over the 12 months to June 2010, total available floorspace for Yorkshire and Humberside increased by 2.4% (67,799m²). According to the IPD Index, rental values fell by 1.9% in the first half of the year and by 5.0% over the 12 months to June. Availability in large buildings increased by 8.9% (96,738m²) from June 2009 to June 2010. We believe that prime yields in Yorkshire and Humberside have hardened to between 7½ and 8% for multi-let estates and Available new floorspace decreased by 12.0% (86,202m²) over the remained stable at 6¾ to 7% for large distribution properties. 12-month period. Yorkshire & Humberside market performance indicators Jun 05 - Yorkshire & Humberside availability - last 10 years Jun 10 3.0 260 Secondhand floorspace New floorspace Total return 240 2.5 Capital growth 220 Rental value growth 2.0 200 2 180 1.5 160 million m 1.0 140 120 0.5 100 Index value December 2000 = 100 80 0.0 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development Yorkshire & Humberside agency comment The level of speculative development under construction in “Occupier activity has increased since the beginning of the Yorkshire and Humberside has fallen since our last survey and the year, resulting in a number of recent deals, particularly on the region now represents only 4% of all development across GB. larger available units. Landlords are keen to fill voids and are At the end of July 2010 there was 3,746m² under construction prepared to offer significant incentive packages or negotiate within four schemes, a decrease of 28% on levels recorded in short-term deals until the market improves. Despite this, there January. The largest development comprises 2,388m² and is due remains a substantial supply of big sheds in the 12,000m² to for completion at the end of the year. 33,000m² range in the South Yorkshire region. Development of any kind is rare and with very little speculative development we Yorkshire & Humberside speculative floorspace under construction are likely to see a shortage of quality stock under 10,000m² in 250 16 Floorspace m2 No. of schemes the near future.” 14 200 ) 2 12 Daniel Martin, Partner (Leeds) 01132 355222, [email protected] 150 10 Richard Harris, Partner (Leeds) 8 01132 355249, [email protected] 100 6
Floorspace (000s m 4 50 2
0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
14 North Prime industrial rents (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Newcastle 51.10 - 53.80 51.10 - 53.80 Following a decrease in total availability in our last survey, Team Valley 51.10 - 53.80 51.10 - 53.80 availability in the North increased by 0.7% (9,722m²) in the first Stockton-on-Tees 37.70 - 43.05 37.70 - 43.05 half of 2010, to reach 1.438 million m² at the end of June 2010. Washington 48.45 48.45 Floorspace available in large buildings over 10,000m² increased Sunderland 43.05 43.05 by 3.2% (12,508m²) in the first six months of the year. At June Assumes minimum of 1,000m². 2010 there was 407,519m² available, representing 28.3% of the region’s total supply. Investment market performance The industrial market in the North produced a total return of 5.9% Available new floorspace fell by 17.0% (33,192m²) to 161,648m². in the first half of 2010, according to the IPD Quarterly Index, and At the end of June 2010 new floorspace accounted for 11.2% of 13.7% in the 12 months to the end of June. the region’s total available stock. Capital values increased by 2.3% in the first half of the year, with Over the year to June 2010, available floorspace in the North an annual rate of 6.2%. increased by 0.5% (7,434m²). According to the IPD Index, rental values fell by 2.1% in the six Floorspace available in large buildings over 10,000m² decreased months to June and by 3.0% over the full year. by 4.2% (17,832m²) during this period. We believe that prime yields in the North have hardened to around Available new floorspace fell by 22.7% (47,486m²) over the 12 7¾% for multi-let estates but have remained stable at 7% for large months to June 2010. distribution properties.
North availability - last 10 years North market performance indicators Jun 05 - Jun 10 1.6 260 Secondhand floorspace New floorspace Total return 1.4 240 Capital growth 220 1.2 Rental value growth 200 2 1.0 180 0.8 160 million m 0.6 140 0.4 120 0.2 100 Index value December 2000 = 100 0.0 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development North agency comment The level of speculative development under construction in the North increased in the first half of 2010, following very subdued “In general enquiry levels have remained consistent since the development over the past 18 months. At the end of July there start of the year and signs suggest this trend will continue. A was a total of 3,240m² under construction within the second number of companies have taken advantage of the favourable phase of one scheme, comprising six units due for completion at terms which currently can be negotiated, and a number of the end of the year. large transactions have subsequently been completed so far this year. However, this trend may change as the stock of North speculative floorspace under construction good quality available units diminishes leading to a hardening 140 14 in the terms on offer. The market still remains difficult within 2 Floorspace m No. of schemes the secondhand sector, with a number of potential occupiers 120 12 having to go through lengthy approval processes before being ) 2 100 10 able to commit, which is slowing the market down.”
80 8 Simon Hill, Partner (Newcastle) 60 6 0191 279 0006, [email protected]
40 4 Floorspace (000s m
20 2
0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
15 King Sturge: Industrial & Distribution Floorspace Today
Scotland Prime industrial rents, (£/m²) Location Jan 10 July 10 Change in availability - Over 6 and 12 months Edinburgh (South Gyle) 75.35 75.35 Total available industrial floorspace in Scotland increased by 1.8% Rest of Edinburgh 67.30 67.30 (41,556m²) in the six months since our last survey, to 2.365 million Glasgow 64.60 64.60 m² at the end of June 2010. Glasgow Airport 64.60 64.60 In the first half of the year, available floorspace in large buildings Aberdeen 75.35 75.35 over 10,000m² increased by 2.6% (19,136m²). Large units account Assumes minimum of 1,000m². for 32.4% of Scotland’s overall supply, with 765,665m² available. Investment market performance The availability of new floorspace in Scotland fell by 22.1% The industrial market in Scotland produced a total return of 6.2% (19,336m²) since our last survey. At June 2010 there was 68,080m² in the first half of 2010, according to the IPD Quarterly Index, and of new supply, providing 2.9% of Scotland’s total available stock. 17.2% in the 12 months to the end of June.
In the 12 months to June 2010, Scotland’s total available floorspace Capital values in the first half of the year increased by 2.5%, with increased by 6.2% (138,795m²). an annual rate of 8.0% to the end of June 2010.
Floorspace in large buildings over 10,000m² increased by 14.4% According to the IPD Index, rental values fell by 0.9% in the first (96,437m²) in the same 12-month period. half of the year and were 0.3% lower over the year to June.
Available new floorspace declined by 27.1% (25,323m²) over the We believe that prime yields in Scotland are around 7½% for multi- 12 months to the end of June 2010. let estates and between 6¾ to 7% for large distribution properties.
Scotland availability - last 10 years Scotland market performance indicators Jun 05 - Jun 10 3.0 Secondhand floorspace New floorspace 240 Total return 220 2.5 Capital growth 200 2.0 Rental value growth 2 180
1.5 160
million m 140 1.0 120 0.5 100 Index value December 2000 = 100 0.0 80 Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 05 05 06 06 07 07 08 08 09 09 10 Source: King Sturge Research Source: IPD
Speculative development Scotland agency comment The level of speculative development in Scotland has increased “Enquiries have remained at a steady pace but occupiers since our previous survey, as a result of a large unit scheme are still in the driving seat in most areas when it comes to commencing construction in Glasgow. At the end of July 2010 negotiating terms. Demand in Edinburgh is predominantly there was 14,731m² under construction in one scheme, which for the smaller size range of units from 300 to 500m² with comprises two units of 8,520m² and 6,211m² respectively. This evidence of some higher rents being achieved for trade counter represents an increase of 9,157m² since January and Scotland units in key locations with main road frontage. Secondary areas now accounts for 15% of all GB development. with large amounts of supply continue to struggle with headline rents potentially still decreasing, or with incentives being more Scotland speculative floorspace under construction inventive to try to attract tenants.” 120 12 Floorspace m2 No. of schemes
100 10 Kirsty Palmer, Partner (Edinburgh) ) 2 0131 243 2222, [email protected] 80 8
60 6
40 4 Floorspace (000s m 20 2
0 0 Jan MaySep Jan MaySep Jan MaySep Jan MaySep Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul 01 01 01 02 02 02 03 03 03 04 04 04 05 05 06 06 07 07 08 08 09 09 10 10
Source: King Sturge Research
16 GB DISTRIBUTION MARKET
New units of 10,000m2 and over King Sturge: Industrial & Distribution Floorspace Today
Occupier Demand The East and West Midlands accounted for the next largest share of take-up at 25% and 21% of the total respectively, whilst the North The national picture West, North East and Scotland did not record any transactions in new units over 10,000m² in the six month period. During the recent recession, occupier take-up for new units over 10,000m² slumped to a 15-year low in terms of floorspace Sectors transacted, but since the weakest period of demand during the first half of 2009, take-up levels have shown steady improvement. Take up in the distribution market for the first half of the year was dominated by retailers, with many taking advantage of competitive In the first six months of 2010, a total of 452,567m² was taken- deals, resulting in the sector accounting for 70% of all transactions. up in 13 new units of 10,000m² and over. This is a similar level Non-food retailers took the largest share with a number of well to the take-up recorded in the second half of 2009 (491,345m²), known names and online retailers starting to implement supply but compares with only 132,503m² in the same period last year. chain requirements which had previously been put on hold. In addition, there are a further five transactions totalling over 100,000m² that have taken place during the third quarter of the Logistics firms were less prevalent in the market during the first year so far, together with a number of significant requirements, half the year, with only two transactions for the sector recorded, that will continue to push take-up higher. although this could be an indication of retailers managing their supply chain networks in-house. During the first half of the year, two thirds (65%) of all new floorspace taken-up was speculatively developed space, with the Online and grocery retailers will continue to drive the occupier design and build market accounting for 35%. This is a reversal recovery, with some very large active requirements in the market. of historical trends whereby speculative floorspace has generally 2 accounted for only one third of transactions. The increase in Take-up of new logistics facilities of 10,000m and over by sector speculative take-up is a result of occupiers generally benefiting 100 from a good choice of speculatively developed product, available 90 on competitive terms. However, as speculative supply becomes 80 limited in certain locations, companies requiring new facilities 70 will need to seek design and build solutions, or potentially good 60 quality, modern secondhand space. 50 40 2 Take-up of new logistics facilities of 10,000m and over in GB 30 20 1.8 90 1.6 80 10 1.4 0 70 2005 2006 2007 2008 2009 2010 H1 1.2 60 2 1.0 50 Food retail Non-food retail Logistics 0.8 40 million m 0.6 30 Transactions Manufacturing Other 0.4 20 Source: King Sturge Research 0.2 10 0.0 0 Size analysis 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 In the first half of 2010, the average size of unit taken-up (in new 2010 H1 Floorspace (m2) No of occupier transactions units of 10,000m² and over) was 34,812m². This represents a marked increase in the average unit size recorded in previous years Source: King Sturge Research (23,105m² for 2009 and 27,728m² for 2008) and signifies a return of confidence for occupiers in taking larger units. Over the period Regions 2000-2009 the average size of units taken-up was 26,325m². Regionally, London, the South East and Eastern combined Average size of unit taken-up in new logistics facilities of 10,000m2 accounted for the largest share of floorspace taken-up in the first and over half of 2010 at 28% of the total. The regions’ share was boosted by two large design and build transactions by retailers in Dagenham and Andover respectively. 35,000 Trend line 30,000 Regional take-up of new logistics facilities of 10,000m2 and over in GB 25,000 2009 2010 0% 0%0% 0% 0% 2 20,000 North West m 5.9% 10.9% 6.1% West Midlands 28.1% 15,000 7.5% London, South East/Eastern 37.8% 25.2% South West & Wales 10,000 9.5% Scotland East Midlands 5,000 15.2% 16.4% Yorks & Humberside 18.0% 19.4% 0 North 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 H1
Source: King Sturge Research Source: King Sturge Research
18 Supply According to latest forecasts, distribution rental values are expected to see further downward adjustments this year and Speculative development next, before returning to modest growth in 2012. The following table presents the general tone of prime headline rents for new At the end of June 2010, available new speculative supply across logistics units across GB. GB stood at 1.598 million m² in 76 units of 10,000m² and over. New supply therefore fell by a further 288,190m² during the first Prime logistics rents half of 2010 and the level at mid 2010 compares with 1.886 million m² at the end of 2009, and 2.294 million m² at the end of 2008. The Location £ per m² supply of large new distribution facilities is now 39% lower than London (Heathrow) 140.00 its peak in March 2008 (2.621 million m²). London (East - Dagenham) 80.00 Bristol 61.90 The supply of new distribution space varies considerably by region, Birmingham 59.20 highlighting a North-South divide. Yorkshire & Humberside and the North West account for large shares of current supply, and with Manchester 51.10 demand remaining patchy in these areas, there is still a window Leeds 51.10 of opportunity for occupiers to secure soft deals. In the wider Scotland - M8 corridor 48.40 South Eastern (London, South East and Eastern) and South West Assumes minimum of 10,000m². markets, however, the supply of new or good quality distribution units is rapidly diminishing. In these locations, occupiers are less Investment comment likely to be able to negotiate bargains and will be forced to consider Investor demand within the distribution sector, has cooled since design and build solutions or modern, secondhand stock to satisfy the beginning of the year reflecting ongoing concerns with the their requirements. wider economy and the occupier market remaining fragile. Whilst there is still a considerable weight of money available and relatively Speculative development in the logistics market came to a good demand from investors, they are generally more discerning standstill at the middle of 2009 and no new development has and refocused on prime. The General Election and Budget caused started nationally since then. There are currently no new buildings investors to be even more cautious in their purchases and of 10,000m² or over under construction speculatively across GB they placed greater focus on property fundamentals causing a and whilst the occupier market remains fragile, development is narrowing in the definition of prime. unlikely to start before 2011. However, some developers and funds have started the first strategic site acquisitions since Recent transactions indicate that prime distribution yields for 15- before the recession, and if the gradual improvement in demand year income have softened to around 6½%, compared with 6% continues, speculative development could be considered for in December. selective locations next year. According to the IPD Quarterly Index, the UK distribution market Rents produced a total return of 7.4% in the first half of 2010, and 22.5% Prime headline rents have remained stable, although these in the year to June. are largely propped up by generous incentive packages. In most areas, the market is still more favourable to tenants, with Capital values in the first half of the year increased by 3.6% with occupiers taking advantage of very competitive deals. Rent free an annual increase of 13.9% to the end of June 2010. periods of up to 12 months are being offered for five year terms, whilst stepped rentals and capital contributions to fit-outs are still According to the IPD Quarterly Index, rental values fell by 1.1% in common. However, in the areas of tight supply, these incentives the first half of the year and were 2.9% lower over the full year. are now tightening.
19 IDFT INDUSTRIAL & DISTRIBUTION FLOORSPACE TODAY
Contacts
Head of UK Industrial & Logistics Group (Manchester) David Brooks +44 (0)161 238 6239 Head of International Industrial Agency (London) Tim Johnson +44 (0)20 7087 5300 Head of Research Angus McIntosh +44 (0)20 7087 5500 Industrial Research Jon Sleeman +44 (0)20 7087 5515 Industrial Research Anna Behan +44 (0)20 7087 5516
Agency London Andy Harding +44 (0)20 7087 5310 London Gus Haslam +44 (0)20 7087 5301 London Tim Clement +44 (0)20 7087 5303 Bath Huw M Thomas +44 (0)1225 32 4109 Birmingham Carl Durrant +44 (0)121 214 9950 Bristol Paul Baker +44 (0)117 930 5780 Cardiff Chris Sutton +44 (0)29 2072 6014 Edinburgh Kirsty Palmer +44 (0)131 243 2222 Exeter Tim Western +44 (0)1392 429 305 Glasgow David Cobban +44 (0)141 225 0516 Leeds Daniel Martin +44 (0)113 235 5222 Leeds Richard Harris +44 (0)113 235 5249 Manchester Steven Johnson +44 (0)161 238 6238 Newcastle Simon Hill +44 (0)191 279 0006 Nottingham Matthew Smith +44 (0)115 908 2123 Southampton Matthew Poplett +44 (0)23 8038 5621
All data contained in this report has been compiled by King Sturge LLP and is published for general information purposes only. While every effort has been made to ensure the accuracy of the data and other material contained in this report, King Sturge LLP does not accept any liability (whether in contract, tort or otherwise) to any person for any loss or damage suffered as a result of any errors or omissions. The information, opinions and forecasts set out in the report should not be relied upon to replace professional advice on specific matters, and no responsibility for loss occasioned to any person acting, or refraining from acting, as a result of any material in this publication can be accepted by King Sturge LLP.
© King Sturge LLP SEPTEMBER 2010
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+44 20 7493 4933 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 4 NOTE OF INTERVIEW WITH THE ECONOMIC DEVELOPMENT OFFICER FOR HINCKLEY AND BOSWORTH BOROUGH COUNCIL PROSPECT LEICESTERSHIRE
EMPLOYMENT LAND STUDY EARL SHILTON & BARWELL
CONSULTATION INTERVIEW QUESTIONS WITH JUDITH STURLEY, ECONOMIC DEVELOPMENT OFFICER, 18th OCTOBER 2010
QUESTIONS
1 What have been the strongest market sectors in recent years (over the last 5 years)?
Manufacturing has been the strongest market sector with 21% of the local population employed in the industry. Hosiery specifically has traditionally been a strong industry, however there has been a decline in recent years with the closure of a number of hosiery businesses. Halls Socks and James Bennett are still large employers in this industry.
Distribution is a strong market along the A5 corridor. The Council would like to promote cross boarder working along the A5 corridor with Warwickshire that will benefit both Counties.
There is a limited office market. There is some office development proposed at the bus station site although the timescale for bringing this forward is unknown. The Council have an office requirement and are committed to taking accommodation at the proposed mixed-development site that is due to take place at the old Fludes site on the Hawley Road.
The Atkins Building which is an office conversion of a Grade II Listed building has just been completed. The scheme offers incubation units for creative, high technology businesses together with high spec office accommodation. The scheme is already well occupied. Hinckley College is due to relocate to new premises next to the Atkins building. The college specialises in Art and Drama, and it is proposed that strong links will be built between the two developments that feed new businesses into the Atkins Building.
A new development owned by the Council has been developed at Greenfields Business Park to the rear of Wheatfield Way. This development could provide move on space for successful companies at the Atkins Building.
2 What particular issues are there with the current stock of offices, factories and warehouses (in terms of age, vacancy levels, suitability, adaptability and redevelopment prospects, etc) in Earl Shilton and Barwell?
There is no high quality stock in Earl Shilton and Barwell. The majority of the accommodation is dated and of poor quality, although it is all very well occupied.
3 How much demand is there for new employment premises in Hinckley, Earl Shilton and Barwell? What enquiries are there, and for what type of stock (use, size and condition)?
Demand for small industrial units of a medium quality, where rents are not too high. There will also continue to be demand for cheaper poorer quality accommodation such as that already provided in Earl Shilton and Barwell. There is limited demand for office accommodation.
Enquiries tend to be for Hinckley and for smaller industrial units. Now that the new bypass has been built it is anticipated that there will be increased demand for accommodation in Earl Shilton.
PJL/LS KING STURGE 20/10/10 4 What is your opinion on the quantity and quality of new employment stock that is required in Earl Shilton and Barwell?
Small industrial units of a medium quality accommodation are required in Earl Shilton and Barwell. Start up units for small businesses will also be required.
5 How do you attract inward investment? What are the local skills/advantages of the area?
There has been an increase in the skills that the resident population possess. 32% of the population now have an NVQ4 or above. This may be due to the activity of the Leicestershire and Leicester City Learning Partnership.
There are pockets of deprivation where the skills base is low, however generally there is low unemployment in the area.
The MIRA site on the A5 employs a number of highly skilled workers and therefore offers high quality jobs for the local area.
6 Are there any proposals for the large employers in the local area such as Triumph and National Grid to expand or contract?
Caterpilla reduced their workforce circa 12 months ago by 200 people, however there are signs of improvement in this situation with the announcement that they are going to produce a new product locally which will create circa 100 new jobs.
MIRA have also recently made a very exciting announcement about the creating of 2,000 jobs over the next 10 years. These jobs will be of a good quality for highly skilled workers that will be of a benefit to the local economy. The company plans to develop an engineering centre and an improved technology park within their 750 acre site.
7 What are the proposals for Tungsten Park, Hinckley? The first phase has been built - are there any plans to build out further phases, and if so what are the time frames?
Please speak to the agent to get full up to date details.
8 There is a new development to the rear of Wheatfield Way, Hinckley (close to Morrisions) of circa 18 small industrial unit. This scheme appears to have been completed however there is no occupier or agent. Do you know what is happening here?
The 23 unit scheme is Council owned and has just been completed within the last month. It is called Greenfield Business Park. The units are of circa 1,000 to 2,500 sq ft each. Three units have already been let. The development is a ‘green’ enterprise park BREEAM rated ‘very good’.
9 What are the proposals for the cleared land off the Rugby Road / Brookfield Road?
This is the former Johnson’s Factory site. A mixed use development comprising up to 375 dwellings, employment uses, a local centre, live work units and associated green space is proposed.
PJL/LS KING STURGE 20/10/10 10 What are the proposals for the vacant Old Tights Factory on Hawley Road?
A mixed use development of office and residential is proposed. As discussed above the Council are committed to taking office accommodation at the proposed scheme. 56 residential dwellings with associated parking are also proposed.
PJL/LS KING STURGE 20/10/10 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 5 TABLES OF VACANT INDUSTRIAL PROPERTY FOR HINCKLEY, BARWELL AND EARL SHILTON Table of Vacant Industrial Units: Hinckley
Address Size (ft2) Description Condition Quoting Rent (ft2) Industrial The Quarters, 8-10 Druid 1,068 Terraced office/workshop Poor *£0.09 ground rent on a long Street, Hinckley, LE10 1QH accommodation leasehold sale price £100,000
51 New Street, Hinckley, 2,159 Terraced, single storey Reasonable £3.61 LE10 1QY industrial unit with court yard area
Unit V, Tungsten Park, 2,400 Mid terraced industrial unit Good £5.62 Coventry Road, Hinckley, high spec LE10 0NH
Unit 4, Tollgate Works, 2,590 Terraced Industrial Reasonable £3.50 Sapcote Road, Hinckley, accommodation LE10 2AZ
Unit 2, Holywell House, 3,070 Semi detached Reasonable £3.58 Parsons Lane, Hinckley, industrial/office LE10 1XT accommodation within 1 unit
Unit 1, Holywell House, 3,120 Semi detached Reasonable £3.21 Parsons Lane, Hinckley, industrial/office LE10 1XT accommodation within 1 unit
Havelock Building, Unit 2, 3,189 Single storey factory unit with Poor £2.74 Willowbank Road, Hinckley, partitioned offices at the front LE10 0QP of the unit
Units 2 and 3, Sterling Park, 3,259 Terraced Good £4.95 Jacknell Road, Hinckley, industrial/warehouse unit LE10 1RU single storey
Unit 1, Knights Court, 3,390 Detached factory warehouse Good £4.57 Dodwell Bridge Industrial with additional office Estate, Brindley Road, accommodation Hinckley, LE10 3BY Address Size (ft2) Description Condition Quoting Rent (ft2) Industrial Unit 3, Hinckley Business 3,570 Workshop/office Poor £2.52 Centre, Burbage Road, accommodation, two storeys Hinckley, LE10 2UD with car parking
1A Trinity Vicarage Road, 3,854 Terraced warehouse unit Reasonable £3.92 Hinckley, LE10 0BU situated on the 1st floor above gym
Unit 2, Knights Court, 3,940 Industrial unit with car Good £5.08 Brindley Road, Hinckley, parking which also serves LE10 1YE the other two units on the site
Unit 11, Hinckley Business 3,964 Detached Reasonable £4.04 Park, Brindley Road, industrial/warehouse Hinckley, LE10 3BY accommodation, single storey Unit D5, Fleming Road, 4,653 Single storey industrial unit Good £4.75 Hinckley, LE10 3DJ
Units X-Y, Tungsten Park, 4,951 New Industrial Good £5.45 Coventry Road, Hinckley, accommodation, high spec LE10 0NH
10 B Barleyfield, Hinckley, 5,022 Detached factory Good £4.75 LE10 1YE warehouse/warehouse additional office accommodation 7a Sketchley Meadows, 6,570 Accommodation comprises Good £4.57 Hinckley, LE10 3EN industrial/commercial unit with trade counter and office accommodation Unit 7, Sketchley Lane 7,000 Single storey warehouse Good £4.42 Industrial Estate, Hinckley premises Address Size (ft2) Description Condition Quoting Rent (ft2) Industrial Unit B, Nutts Lane Industrial 8,595 Single storey warehouse unit Poor £2.59 Estate, Hinckley, with covered loading yard Leicestershire
Unit A, Nutts Lane Industrial 10,647 Single storey warehouse unit Poor £2.58 Estate, Hinckley, with covered loading yard Leicestershire
K1, Harrowbrook Industrial 10,679 Detached, industrial/office Reasonable £3.74 Estate, Nuffield Road, accommodation split over Hinckley LE10 3DG two floors
Dennis House, Hawley Road, 10,743 Two ground floor Poor £2.00 Hinckley, LE10 0PR work/storage units
Units 1a-2, Oaklands Farm, 10,849 Detached Poor £3.00 Higham Lane, Wykin, industrial/warehouse unit Hinckley, LE10 3EF
K1, Nuffield Road, Hinckley, 12,938 Detached industrial unit with Reasonable £3.47 LE10 3DG first floor office accommodation
Faraday Road, Dodwells 13,053 Detached single storey Poor £2.98 Bridge Industial Estate, industrial unit with office Hinckley accommodation to front of property 2 Hinckley Fields Industrial 13,586 Two storey industrial Good £5.34 Estate, Maizefield, Hinckley, accommodation with office LE10 1YF and amenity block
D1-D2, Harrowbrook 13,644 Space comprised of Good £4.75 Industrial Estate, Fleming adjoining industrial units, Road, Hinckley, LE10 3DJ which can be separated if required Address Size (ft2) Description Condition Quoting Rent (ft2) Industrial Unit B, Harrowbrook 19,223 Warehouse unit with two Good £4.69 Industrial Estate, Hinckley, storey offices LE10 3DS
Unit A, Nutts Lane, Industrial 19,242 Adjoined Poor £2.58 Estate, Hinckley, LE10 3EJ warehouse/industrial unit, single storey
4 Watling Drive, Burbage, 19,806 Two storey, detached, Reasonable £4.00 Hinckley, LE10 3EY warehouse premises with office accommodation
Warehouse, Coventry Road, 23,312 Large detached, secondary Reasonable £3.50 Hinckley, LE10 3DJ industrial/warehouse unit
Warehouse, Harrowbrook 23,418 Detached industrial Poor £1.70 Industrial Estate, warehouse with self Harrowbrook road, Hinckley, contained office LE10 3DS accommodation Eurokey - Unit 2, Hinckley 55,000 Large detached industrial Good £5.95 Logistics Park, LE10 3HU warehouse
Dodwells Bridge, Dodwells 65,620 Detached Good £4.50 Bridge Industrial Estate, warehouse/industrial building Hinckley, Leicestershire with two storey offices
Total vacant industrial 398,124 floor space Table of Vacant Industrial Units: Barwell
Address Size (ft2) Description Condition Quoting Rent (ft2) Industrial Kingsfield Road, Barwell 1,000 Small industrial starter unit Reasonable £3.60 short term leases
King Street, Barwell 4,905 Single storey Poor £2.84 warehouse/industrial premises
Total vacant industrial 5,905 floor space Table of Vacant Industrial Units: Earl Shilton
Address Size(ft2) Description Condition Quoting Rent (ft2) Industrial Unit 2, Oaks Industrial 1,990 Terraced industrial Good £4.69 Estate, Oaks Way Station warehouse Road, Earl Shilton
Unit 1, Oaks Industrial 2,040 Terraced industrial Good £4.48 Estate, Oaks Way Station warehouse Road, Earl Shilton
64 Station Road, Earl 3,756 Single storey industrial unit Reasonable £3.19 Shilton,
Unit C Warwick Buildings, 3,804 Industrial/warehouse units, Poor £2.50 Rossendale Road, Earl on ground floor of two storey Shilton property
40 High Street, Earl Shilton, 9,670 Single storey attached Poor £2.28 warehouse/industrial unit
Unit B Warwick Buildings, 11,539 Industrial/warehousing unit, Poor £1.38 Rossendale Road, Earl has the potential to divide Shilton
10-12 Keats Lane, Earl 18,764 Three storey warehouse Poor £1.95 Shilton accommodation with office space
Total vacant industrial 51,563 floor space Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 6 TABLES OF VACANT OFFICE PROPERTY FOR HINCKLEY AND BARWELL Table of Vacant Office Suites: Hinckley
Address Size (ft2) Description Condition Quoting Rent (ft2) Office Carr House, Hawley Road, 434 First floor office space Reasonable £8.71 Hinckley, LE10 0PR
7 Castle Street, Hinckley, 620 Two partitioned offices Poor £5.00 LE10 1DA arranged within a suite
32A Mount Road, Hinckley, 642 Self contained office space Good £11.68 LE10 1AD on the first and second floors
Canton House, Unit 1, 689 Ground floor office space Good £12.70 Wheatfield Way, Hinckley, LE10 1YG
1 Mill Hill Road, Hinckley, 717 Self contained ground floor Good £10.46 LE10 0AX office with work shop and store
Wilshire Carpets, George 778 A suite of self contained Reasonable £7.71 Street, Hinckley, LE10 0AL offices located on the first floor
Catherine House, 16 1,389 Second floor office Reasonable £7.38 Coventry Road, Hinckley, accommodation of three suits LE10 0JT that can be combined or taken separately Sailsbury House, Wheatfield 1,428 Two storey office Good £12.33 Way, Hinckley, LE10 1YG accommodation within a terraced block of eight
47 New Street, Hinckley, 1,550 Single Storey general office Poor £6.19 LE10 1QY space with storage Address Size (ft2) Description Condition Quoting Rent (ft2) Office 1 Castle Street, Hinckley, 2,399 First floor office suite Poor £5.00 LE10 1DD
10 The Borough, Hinckley, 2,702 Detached 2/3 storeys of Reasonable £7.40 LE10 1NL office space previously bookmakers restrictive covenants preventing use as building society or bank Star House, Wheatfield Way, 3,832 Detached office building with Good £13.05 Hinckley, LE10 1YG accommodation spread over two floors
Stockwell House, New 3,950 Six self contained office Poor £6.08 Buildings, Hinckley, LE10 suites furnished to modern 1HW standards
New Office Building, 6,806 Office space part of three Good £14.00 Wheatfield Way, Hinckley, storey office building to be LE10 1YE constructed to a high standard Total vacant office floor 27,936 space Table of Vacant Office Suites: Barwell Address Size (ft2) Description Condition Quoting Rent (ft2) Office Powerpoint Business Centre, 1,832 Office accommodation Poor £6.55 122 High Street, Barwell spread over three floors
Total vacant office floor 1,832 space Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 7 EMPLOYMENT LAND AVAILABILITY SCHEDULES FROM MARCH 2006 TO MARCH 2010, HINCKLEY AND BOSWORTH BOROUGH COUNCIL EMPLOYMENT LAND AVAILABILITY AT 31st MARCH 2006 Parish Location Developer/Occupier Status 1987 Use Area Floorspace Capable of Remarks Class ha immed devel Hinckley Stephenson Road Detail B1, B2, B82005-060.3 99/00403/FUL approved 24/06/99 for the erection of 5 Industrial 49SW003 Harrowbrook Ind Estate Not started units. Now expired Hinckley Wheatfield Way Outline B1, B2, B8 0.34 0.27ha started july 99 and built Aug 99 as a McDonalds leaving 49NW009 Hinckley Fields Ind Est Not started the remaining 0.34ha still to be developed Hinckley West of Stoke Road Expired B1, B2, B8 3.53 1.93ha of original 5.46ha allocation now developed for public 49NW012 house and non food retail warehouse. 99/00126OUT approved Not started 23/06/99 for erection of industrial unit & offices Now expired Burbage Logix Park Industrial Rosemound Developments Outline B1, B2, B8 20.78 97/01066/OUT approved on appeal 23/3/99 Estate Ltd Detail B1 & B2 1.18 1 - 4,116m2 U/C 04/00882/FUL Erection of two units (a & b) & ancillary offices Detail B1, B2, B8 1.28 2 - 5,110m2 U/C 06/00361/FUL Erection of distribution centre Detail B1, B8 1.91 3 - 8,965m2 U/C 05/01015/FUL Erection of distribution centre & ancillary offices Detail B1, B8 2.68 4 - 12,263m2 U/C 06/00362/FUL Erection of distribution centre & ancillary offices Detail B1, B8 8.16 5 - 33,952m2 U/C 04/00883/FUL Warehouse & distribution building including offices Stanton Under Bardon Off Victoria Road Wilson Bowden Properties Detail B2, B8 0.93 2,796m2 U/C 05/01090/FUL Sub of units E & F of approved application with 1 no. 41SW046 Beveridge Lane Ind Est Ltd B2/B8 industrial warehouse unit Detail B2, B8 1.40 4,819m2 U/C 05/00199/FUL Erection of 2 units. Amended by 05/01090/FUL Outline B1, B2, B8 1.22 Area still remaining to be developed Burbage Rear of Sketchley Works Allocation B2, B8 3.93 Rugby Road Hinckley Nutts Lane / East Outline B1, B2, B8 2.7 04/01316/OUT Industrial Development & Associated Works Midlands Electricity Detail B1, B2, B8 0.11 1,037m2 05/00865/REM Erection of 4 industrial units
Higham on the Hill MIRA, Watling Street Allocation B1, B2, B8 9 Only half of the alocaion is to count towards the Boroughs land availability total (Total area of allocation 18ha) Hinckley Adj Harrowbrook Ind Est Crest Nicholson (Midlands) Detail B1, B2, B8 4.7 05/00615/FUL erection of 10 commercial units Coventry Road Ltd Burbage 2 Watling Close Lee Ann Fashions Detail B2 0.4 300m2 Not Started 05/00172/FUL Extension to factory - Under 1,000sqm threshold
Desford Desford Hall Shropshire Land Co Detail B1 2,357m2 Not Started 05/00573/FUL Erection of new office building Leicester Lane Hinckley 7 Clover Park, Hinckley Evans Bros Detail B2 370m2 Under 05/00211/FUL Extensions to existing industrial units 6 & 7 Fields Industrial Estate Construction Under 1,000sqm threshold Twycross Rare Ltd, Manor Park Rare Ltd Detail B1 1,440m2 Not Started 05/00572/ful Extensions to administration block & additional barn unit Hinckley Plot 2 Brindley Road G & A Coventry Services Detail B2 211m2 Not Started 06/00161/FUL Eection of factory unit. - Replacement factory Hinckley Business Park Under 1000sqm threshold Desford Peckleton Lane Caterpillar (UK) Ltd Detail B8 61,583m2 Not started on 99/00853/FUL Phase 2 Expansion of storage facilities, realignment unit of highway, hardstanding areas, mounding & landscaping Work completed on highway, mounding & landscaping
Page 1 EMPLOYMENT LAND AVAILABILITY AT 31st MARCH 2007 Parish Location Developer/Occupier Status 1987 Use Floorspace Remarks
Built 1/4/06 Application Outline Detail Allocation U/C - 31/3/07 expired Class Hinckley Stephenson Road 0.30 B1, B2, B8 99/00403/FUL approved 24/06/99 for the erection of 5 Industrial 49SW003 Harrowbrook Industrial units on existing industrial estate. Estate Remaining plot on the estate to be developed Hinckley Wheatfield Way, Hinckley 0.34 B1, B2, B8 02/00455/FUL approved 12/7/02 for the erection of an industrial unit 49NW009 Fields Industrial Estate expires 12/07/07 - Last remaining plot on the estate to be developed Stanton Under Bardon Off Victoria Road, Wilson Bowden Properties 1.22 B1, B2, B8 41SW046 Beveridge Lane Industrial Ltd Estate 2.33 B1, B2, B8 2 units built, total floorspace 7615m2 Burbage Rear of Sketchley Works, 3.93 B2, B8 Allocation in the Hinckley & Bosworth Local Plan Rugby Road Hinckley Nutts Lane / East 2.31 B1, B2, B8 04/01316/OUT Industrial Development & Associated Works on 2.7ha of land Midlands Electricity Site 0.11 B1, B2, B8 1,037m2 05/00865/REM Erection of 4 industrial units on part of site 0.14 B2, B8 760m2 06/01212/REM Erection of Industrial Unit (sub divided into 2 units) 06/01252/REM Erection of Industrial Unit with 2 storey office 0.14 B2, B8 849m2 accommodation. Office 218m2, Industrial 631m2 Higham on the Hill MIRA, Watling Street 9.0 B1, B2, B8 Only half of the allocaion of 18ha on the MIRA site is to count towards the Borough's Employment Land Availability total. Burbage Logix Park Industrial Rosemound Developments 20.78 B1, B2, B8 5 units built, total floorspace 64,406m2 Estate Ltd Hinckley North of Coventry Road Crest Nicholson (Midlands) 4.70 B1, B2, B8 05/00615/FUL erection of 10 commercial units (expires 11/08/10) Ltd
Barwell Business Centre 06/01387/FUL Part demolition of existing site & erection of 10 no B1, B2, Barwell Kingsfield Road Cotswold Estates Ltd 0.43 B1, B2, B8 2441m2 & B8 industrial units & new medical centre with associated pharmacy TOTAL 3.53 5.41 12.93 0.11 23.11 0.64
Extensions on Existing Employment Sites Desford Desford Hall, Shropshire Land Co 2357m2 B1 2,357m2 05/00573/FUL Erection of new office building (expires 14/10/10) Leicester Lane Twycross Rare Ltd, Manor Park Rare Ltd 1440m2 B1 1,440m2 05/00572/ful Extensions to administration block & additional barn unit Desford Peckleton Lane Caterpillar (UK) Ltd 61,583m2 B8 61,583m2 99/00853/FUL Phase 2 - Expansion of storage facilities, realignment of highway, hardstanding areas, mounding & landscaping Work only completed on highway, mounding & landscaping proposals 7 Clover Park, Hinckley Fields Hinckley Industrial Estate Evans Bros 370m2 B2 370m2 05/00211/FUL Extensions to existing industrial units 6 & 7 2 Watling Close, Sketchley Burbage Lane Industrial Estate Lee Ann Fashions 300m2 B2 300m2 05/00172/FUL Extension to factory 3 Watling Close, Sketchley Burbage Lane Industrial Estate Crane Electronics Ltd 308m2 B1, B2 308m2 06/00682/FUL Two storey factory extension. Expires 16/08/11
Higham on the Hill Mira Mira Ltd 250m2 07/00072/FUL Extension to HGV workshop & erection of fence Unit B, Warwick Building, Daniel Property Investment 06/00220/COU Change of use from training centre to storage & Earl Shilton Rossendale Road Co Ltd 1072m2 B8 1072m2 distribution use TOTAL 370m2 2007-8
Appendix 10 EMPLOYMENT LAND AVAILABILITY AT 31st MARCH 2008 Parish Location Developer/Occupier Status 1987 Use Floorspace Remarks
Built 1/4/07 - Use Class figure Outline Detail U/C 31/3/08 for ELS (ha) Class Barton in the Beans Sycmore Farm, 29 Main St S Ball and Amalgamated 0.49 B1 316m2 07/01424/FUL Mixed development comprising 3 dwellings/offices. Expires 5/12/10 Rugby Road Marketing Services Ltd Barwell Business Centre Barwell Kingsfield Road Cotswold Estates Ltd 0.43 B1, B2, B8 2441m2 06/01387/FUL Part demolition of existing site & erection of 10 no B1, B2, & B8 industrial units & new medical centre with associated pharmacy. Expires 15/12/09 Burbage Rear of Sketchley Works, B2, B8 Allocation in the Hinckley & Bosworth Local Plan Rugby Road Burbage Land rear of 6 Watling Cl Savage Hayward 0.07 B1, B2, B8 464m2 07/00757/FUL erection of industrial unit for B1, B2 & B8 uses. Expires 25/06/10 Burbage Land adjacent Unit D1, Mr Holdback 0.02 B2 133m2 07/00804/OUT erection of B2 industrial unit. Expires 04/07/10 Sketchley Meadows Garage Block, Sapcote Road Burbage Ind Est Mr R Hartley 0.02 B1, B2, B8 130m2 07/01109/FUL demolition of garages and erection of factory unit. Expires 21/09/10 Congerstone Dawkins Abattoir, Morris Homes East 1.07 B1 850m2 06/01405/REM mixed residential and commercial development of 24 no. dwellings and Barton Road Midlands Ltd 850m2 office area Groby Groby Lodge Farm, Groby Lodge Estate 0.27 B1, B8 2681m2 07/01477/COU conversion of farm buildings to B1 and B8 use. 5.4 ha site, expires Markfield Road Partnership 19/12/2010 Hinckley Stephenson Road B1, B2, B8 99/00403/FUL approved 24/06/99 for the erection of 5 Industrial units on existing 49SW003 Harrowbrook Industrial industrial estate. Estate Remaining plot on the estate to be developed Hinckley Wheatfield Way, Hinckley Mouchel Parkman 0.33 B1 2338m2 07/00687/FUL proposed three storey offices 49NW009 Fields Industrial Estate Services Ltd Hinckley Nutts Lane / East 2.31 B1, B2, B8 04/01316/OUT Industrial Development & Associated Works on 2.7ha of land Midlands Electricity Site 0.11 0.11 Mixed B1, B2, B8 1,037m2 05/00865/REM Erection of 4 industrial units on part of site 0.14 B2, B8 849m2 06/01252/REM Erection of Industrial Unit with 2 storey office accommodation. Office 218m2, Industrial 631m2 (Plot 6) 0.14 B1, B2, B8 522m2 07/00759/REM Erection of Industrial Unit with associated offices (resubmission of 06/01212/REM) (Plot 1) Hinckley North of Coventry Road Crest Nicholson (Midlands) 4.7 B1, B2, B8 9363m2 07/01150/FUL Mixed commercial development comprising B1, B2, B8 and Sui Ltd Generis Uses Hinckley Phoenix Business Park M W Properties Ltd 0.02 B1, B2 213m2 07/00594/FUL Three additional industrial units. Expires 22/05/10 Hinckley Jarvis Porter, Invista Foundation 3.7 B8 1787m2 07/00231/OUT Mixed Use development with warehouse units Coventry Road Property Ltd Hinckley Sunnyside Business Park, Hinckley & Bosworth 1.36 B1, B2, B8 3750m2 07/00431/DEEM Construction of 2140m2 industrial space and 1610m2 of hybrid space Wheatfield Way Borough Council (ground floor warehouse and first floor offices). Expires 21/04/10 Hinckley Frith House Farm, Emelia Accessories Ltd 0.1 0.1 B8 B8 1002m2 07/00633/COU Change of use of 2 agricultural buildings to B8 use Rogues Lane (retrospective application) (0.2ha site) Hinckley Dennis House, Cotswold Estates Ltd 0.34 B1 652m2 07/00742/OUT Demolition of existing building and erection of new building 4 Hawley Road comprising 651m2 of office space Higham on the Hill MIRA, Watling Street B1, B2, B8 Only half of the allocation of 18ha on the MIRA site is to count towards the Borough's Employment Land Availability total. Nailstone Former Nailstone Colliery Swip Ltd 9.5 B1, B2, B8 94,971m2 06/00980/OUT Remediation and redevelopment of the former colliery to provide a mix of uses including distribution and storage (B8) and small business uses (B1, B2, B8) (The whole site is 143 ha) Peckleton Peckleton Lane Business Hammond Grange Ltd 0.13 B1, B2, B8 378m2 07/01459/FUL Erection of industrial unit. Expires 14/12/10 Park, Peckleton Common Ratby Alexandra Stone Works, Alexandra Stone Co Ltd 0.11 B2 1058m2 07/01430/FUL Demolition of existing building and erection of industrial building. Desford Lane 5.75 ha site, expires 07/03/11 Stanton Under Bardon Off Victoria Road, Wilson Bowden Properties 1.22 B1, B2, B8 1.22 ha outline site has had ground cleared 41SW046 Beveridge Lane Industrial Ltd Estate TOTAL 17.09 3.90 5.38 0.21 0.30
Extensions on Existing Employment Sites 2 Watling Close, Sketchley Burbage Lane Industrial Estate Lee Ann Fashions 300m2 B2 300m2 05/00172/FUL Extension to factory. Expires 21/02/10 3 Watling Close, Sketchley Burbage Lane Industrial Estate Crane Electronics Ltd 308m2 B1, B2 308m2 06/00682/FUL Two storey factory extension. Expires 16/08/09 Cadeby Brascote Lane Ennstone Building Products 2720m2 B2 2720m2 07/00403/FUL erection of industrial building Ltd Carlton Common Farm, Trafford Knitwear Ltd 766m2 B1, B8 766m2 07/00172/FUL conversion and extension of farm buildings to light industrial use Barton Road and storage. Expires 08/02/10 Desford Peckleton Lane Caterpillar (UK) Ltd 61,583m2 B8 61,583m2 99/00853/FUL Phase 2 - Expansion of storage facilities, realignment of highway, hardstanding areas, mounding & landscaping Work only completed on highway, mounding & landscaping proposals Desford Desford Hall, Shropshire Land Co 2357m2 B1 2,357m2 05/00573/FUL Erection of new office building. Expires 14/10/10 Leicester Lane Unit B, Warwick Building, Daniel Property Investment Co Earl Shilton Rossendale Road Ltd 1072m2 B8 1072m2 06/00220/COU Change of use from training centre to storage & distribution use 7 Clover Park, Hinckley Fields Hinckley Industrial Estate Evans Bros 370m2 B2 370m2 05/00211/FUL Extensions to existing industrial units 6 & 7 Higham on the Hill Mira Mira Ltd 250m2 B2 250m2 07/00072/FUL Extension to HGV workshop & erection of fence Thornton Merrylees Farm, Merrylees Mr & Mrs Vero 146m2 B1 146m2 07/00250/FUL Conversion and part reconstruction of outbuilding to B1 Road office. Expires 26/02/10 Twycross Rare Ltd, Manor Park Rare Ltd 1440m2 B1 1,440m2 05/00572/FUL Extensions to administration block & additional barn unit. Expires 01/06/2010 TOTAL 6213m2 1322m2
Page 1 2008-09
EMPLOYMENT LAND AVAILABILITY AT 31st MARCH 2009 Parish Location Developer/Occupier Status 1987 Use Floorspace Remarks Built 1/4/08 - Application Use Class figure for Outline Detail U/C 31/3/09 expired ELS (ha) Class Barton in the Beans Sycamore Farm, 29 Main St S Ball and Amalgamated 0.49 0.49 (316m2) B1 B1 316m2 07/01424/FUL Mixed development comprising 3 dwellings/offices. Expires 28/02/11 Barwell Barwell Business Centre Cotswold Estates Ltd 0.43 0.43 Mixed B1, B2, B8 1604m2 06/01387/FUL Part demolition of existing site & erection of 10 no B1, B2, & B8 industrial units Kingsfield Road & new medical centre with associated pharmacy. Expires 07/02/10 Burbage Land rear of 6 Watling Cl Savage Hayward 0.07 0.07 Mixed B1, B8 464m2 07/00757/FUL erection of industrial unit for B1, & B8 uses. Expires 03/09/10
Land adjacent Unit D1, Mr Holdback 0.02 0.02 B2 B2 133m2 07/00804/OUT erection of B2 industrial unit with 10m2 B8. Expires 05/09/10 Burbage Sketchley Meadows Garage Block, Sapcote Burbage Road Ind Est Mr R Hartley 0.02 0.02 Mixed B1, B2, B8 130m2 07/01109/FUL demolition of garages and erection of factory unit. Expires 18/11/10 Burbage County Landscape Keyline Builders Merchants 0.50 0.50 (590m2) B1 B1c 590m2 08/01107/FUL erection of builders merchants building with trade counter and alteration of Products, Brookfield Road Ltd existing external storage. Expires 30/01/12 Congerstone Dawkins Abattoir, Morris Homes East 1.07 1.07 (850m2) B1 B1a 850m2 06/01405/REM mixed residential and commercial development of 24 no. dwellings and Barton Road Midlands Ltd 850m2 office area. Expires 23/03/10 Desford Stoke Industrial Park, Mr Nick O'Donnell 0.07 0.07 B2 B2 743m2 08/00344/FUL Erection of industrial unit. Expires 05/06/11 Merrylees Road Earl Shilton Hill Top Works, 2 Keats Ln Mr R Church 0.1 0.1 (925m2) B1 B1 925m2 08/00268/COU Conversion of factory to photographic and recording studio. Expires 23/04/11 Groby Groby Lodge Farm, Groby Lodge Estate 0.27 0.27 Mixed B1, B8 2681m2 07/01477/COU conversion of farm buildings to B1 and B8 use. 5.4 ha site, expires Markfield Road Partnership 12/03/2011 Hinckley Nutts Lane / East A R Cartwright Ltd 2.13 2.13 Mixed B1, B2, B8 04/01316/OUT Industrial Development & Associated Works on 2.7ha of land. Expires 05/07/08 Midlands Electricity Site 0.14 0.14 Mixed B1a, B2 849m2 06/01252/REM Erection of Industrial Unit with 2 storey office accommodation. Office 218m2, Industrial 631m2 (Plot 6). Expires 05/07/10 0.14 0.14 Mixed B1, B2, B8 522m2 07/00759/REM Erection of Industrial Unit with associated offices (resubmission of 06/01212/REM) (Plot 1). Expires 05/07/10 0.18 0.18 (886m2) B1 B1c 886m2 08/00835/FUL Erection of 3 industrial units (Plots 8 - 10). Expires 21/11/08 Hinckley Jarvis Porter, Coventry Invista Foundation 3.7 3.7 B8 B8 1787m2 07/00231/OUT Mixed Use development with warehouse units. Expires 25/05/10 Road Property Ltd Hinckley Sunnyside Business Park, Hinckley & Bosworth 1.36 1.36 Mixed B1, B2, B8 3750m2 07/00431/DEEM Construction of 2140m2 industrial space and 1610m2 of hybrid space Wheatfield Way Borough Council (ground floor warehouse and first floor offices). Expires 12/07/10 Hinckley Phoenix Business Park M W Properties Ltd 0.02 0.02 Mixed B1, B2, B8 213m2 07/00594/FUL Three additional industrial units. Expires 26/09/10 Hinckley Wheatfield Way, Hinckley Mouchel Parkman 0.33 0.33 (2338m2) B1 B1a 2338m2 07/00687/FUL proposed three storey offices. Expires 29/08/10 49NW009 Fields Industrial Estate Services Ltd Hinckley Dennis House, Cotswold Estates Ltd 0.34 0.34 (651m2) B1 B1 651m2 07/00742/OUT Demolition of existing building and erection of new building comprising 4 Hawley Road 651m2 of office space. Expires 25/09/10 Hinckley North of Coventry Road Crest Nicholson (Midlands) 4.7 4.7 Mixed B1, B2, B8 9363m2 07/01150/FUL Mixed commercial development comprising B1, B2, B8 and Sui Ltd Generis Uses. Expires 12/12/10 Hinckley Land between Upper Bond Silvermile Worldwide Ltd 0.03 0.03 (262m2) B1 B1a 262m2 08/00037/FUL Demolition of existing buildings and conversion of remaining industrial Street and Neale's Yard buildings to form B1a offices and 17 apartments. Expires 24/04/11. 0.026 ha Site. Hinckley Essentia House, 56 Upper Glenslade Property Ltd 0.16 0.16 (493m2) B1 B1a 493m2 08/00086/FUL Demolition of existing offices, erection of new offices and conversion of mill Bond Street building into 23 flats. Expires 24/04/11 Hinckley Wharf Yard Benchmark Properties 0.06 0.06 (188m2) B1 B1a 188m2 08/00136/FUL Dental lab, 2 offices and 9 apartments. Expires 11/04/11. 0.064 ha Site Hinckley 39 Derby Road Messrs Rumble & Blower 0.5 0.5 (800m2) B1 B1a 800m2 08/00366/OUT Demolition of garage, erection of 46 dwellings and offices. Expires 04/07/11 Market Bosworth Unit 3, Station Rd Ind Est. Mr T Clinton 0.15 0.15 (549m2) B1 B1c 549m2 08/00824/FUL Demolition of existing building, erection of 3 industrial units. Expires 17/12/11 Nailstone* Former Nailstone Colliery Swip Ltd 9.5 9.31 B8 B1 & B8 94,971m2 06/00980/OUT Redevelopment of the former colliery to provide distribution and storage (B8) (9.3109ha) and small business uses (B1) 0.19 B1 (0.1862ha) (The whole site is 143 ha). Expires 06/03/11 Newbold Verdon 68 Mill Lane Mr S Smith & Mr N Smith 0.1 0.1 (91m2) B1 B1a 91m2 08/00260/FUL 12 apartments and offices. Expires 12/06/11 Peckleton Peckleton Lane Business Hammond Grange Ltd 0.13 0.13 Mixed B1, B2, B8 378m2 07/01459/FUL Erection of industrial unit. Expires 25/02/11 Park, Peckleton Common Peckleton Manor House, Manor Lane Mr Marcus Palmer 0.03 0.03 Mixed B1a, B8 270m2 08/00928/FUL Change of use of agricultural barn to B1a and B8. Expires 12/11/11 Ratby Alexandra Stone Works, Alexandra Stone Co Ltd 0.11 0.11 B2 B2 1058m2 07/01430/FUL Demolition of existing building and erection of industrial building. Desford Lane 5.75 ha site, expires 07/03/11 Ratby Pear Tree Farm Cawrey Ltd 0.39 0.39 (1360m2) B1 B1a, B1c 1360m2 08/01123/FUL Erection of 3 business units. Expires 25/03/12 Stanton Under Bardon Off Victoria Road, Wilson Bowden Properties 1.22 1.22 Mixed B1, B2, B8 1.22 ha outline site has had ground cleared 41SW046 Beveridge Lane Industrial Ltd Estate Stoke Golding Unit 16, Willow Park Ind Autowash Engineering Ltd 0.16 0.16 (360m2) B1 B1c 360m2 08/01088/FUL Erection of industrial unit. Expires 25/02/12 Estate, Upton Lane TOTAL 17.41 5.71 4.72 0.78 *ELS allocation to be located on a more sustainable site
Page 1 2008-09
Extensions on Existing Employment Sites Parish Location Developer/Occupier Status 1987 Use Floorspace Remarks Built 1/4/08 - Application Use Class figure for Outline Detail U/C 31/3/09 expired ELS (ha) Class 2 Watling Close, Sketchley Burbage Lane Industrial Estate Lee Ann Fashions 300m2 B2 300m2 05/00172/FUL Extension to factory. Expires 14/04/10 3 Watling Close, Sketchley Burbage Lane Industrial Estate Crane Electronics Ltd 308m2 B1, B2 308m2 06/00682/FUL Two storey factory extension. Expires 16/08/09 Cadeby Brascote Lane Ennstone Building Products 2720m2 B2 2720m2 07/00403/FUL erection of industrial building. Expires 30/05/10 Ltd Carlton Common Farm, Trafford Knitwear Ltd 766m2 B1, B8 766m2 07/00172/FUL conversion and extension of farm buildings to light industrial use Barton Road and storage. Expires 04/04/10 Desford Peckleton Lane Caterpillar (UK) Ltd 61,583m2 B8 61,583m2 99/00853/FUL Phase 2 - Expansion of storage facilities, realignment of highway, hardstanding areas, mounding & landscaping Work only completed on highway, mounding & landscaping proposals Desford Desford Hall, Shropshire Land Co 2357m2 B1a 2,357m2 05/00573/FUL Erection of new office building. Expires 14/10/10 Leicester Lane 350m2 B1a 350m2 08/00985/FUL Additional office accommodation within roof space. Expires 23/12/11 7 Clover Park, Hinckley Hinckley Fields Industrial Estate Evans Bros 370m2 B1c 370m2 05/00211/FUL Extensions to existing industrial units 6 & 7. Expires 19/05/10 Kirkby Mallory Mallory Park, Church Road British Automobile Racing 335m2 B2 335m2 08/01131/FUL Extensions and alterations to workshop & showroom. Expires 06/02/12 Club Thornton Merrylees Farm, Merrylees Mr & Mrs Vero 146m2 B1a 146m2 07/00250/FUL Conversion and part reconstruction of outbuilding to B1 Road office. Expires 16/05/10 Twycross Rare Ltd, Manor Park Rare Ltd 1440m2 B1a 1,440m2 05/00572/FUL Extensions to administration block & additional barn unit. Expires 10/08/2008 TOTAL 1116m2 5447m2
Page 2 2009-10
EMPLOYMENT LAND AVAILABILITY AT 31st MARCH 2010 Parish Location Developer/Occupier Status 1987 Use Floorspace Remarks
Built 1/4/09 - Application Use Class figure for Outline Detail U/C 31/3/10 expired ELS (ha) Class Barton in the Beans Sycamore Farm, 29 Main St Mr F Brogan 0.50 0.5 (316m2) B1a B1a 468m2 09/00873/FUL Mixed development comprising 3 live/work units. Expires 16/03/13 Barwell Business Centre 06/01387/FUL Part demolition of existing site & erection of 10 no B1, B2, & B8 industrial units & new medical centre with associated pharmacy. Barwell Kingsfield Road Cotswold Estates Ltd 0.43 0.43 Mixed B1, B2, B8 1604m2 Expires 07/02/10 Burbage Land adjacent Unit D1, Mr Holdback 0.02 0.07 Mixed B2, B8 133m2 07/00804/OUT erection of B2 industrial unit. Expires 05/09/10 Sketchley Meadows Garage Block, Sapcote Road Burbage Ind Est Mr R Hartley 0.02 0.02 Mixed B1, B2, B8 130m2 07/01109/FUL demolition of garages and erection of factory unit. Expires 18/11/10 Burbage County Landscape Keyline Builders Merchants 0.50 0.5 (590m2) B1c B1c 590m2 08/01107/FUL erection of builders merchants building with trade counter and alteration of existing external storage. Expires 30/10/12 Products, Brookfield Road Ltd Congerstone Dawkins Abattoir, Morris Homes East 1.07 1.07 (850m2) B1a B1a 850m2 06/01405/REM mixed residential and commercial development of 24 no. dwellings and 850m2 office area. Expires 23/03/10 Barton Road Midlands Ltd Desford Stoke Industrial Park, Mr Nick O'Donnell 0.07 0.07 B2 B2 743m2 08/00344/FUL Erection of industrial unit. Expires 05/06/11 Merrylees Road Groby Groby Lodge Farm, Groby Lodge Estate 0.27 0.27 Mixed B1, B8 2681m2 07/01477/COU conversion of farm buildings to B1 and B8 use. 5.4 ha site, expires 12/03/2011 Markfield Road Partnership Groby 9 Lawnwood Road Mr E Broadhurst 0.013 0.013 (49m2) B1a B1a 49m2 09/00670/COU Change of use from A1 to offices. Expires 25/11/12 Hinckley Nutts Lane / East A R Cartwright Ltd 2.13 2.13 Mixed B1, B2, B8 04/01316/OUT Industrial Development & Associated Works on 2.7ha of land. Expires 05/07/08 Midlands Electricity Site 0.18 0.18 (886m2) B1c B1c 886m2 08/00835/FUL Erection of 3 industrial units (Plots 8 - 10). Expires 21/11/11 Hinckley Jarvis Porter, Coventry Invista Foundation 3.70 3.7 B8 B8 1787m2 07/00231/OUT Mixed Use development with warehouse units. Expires 25/05/10 Road Property Ltd Hinckley Sunnyside Business Park, Hinckley & Bosworth 1.36 1.36 Mixed B1, B2, B8 3750m2 07/00431/DEEM Construction of 2140m2 industrial space and 1610m2 of hybrid space (ground floor warehouse and first floor Wheatfield Way Borough Council offices). Expires 12/07/10 Hinckley Phoenix Business Park M W Properties Ltd 0.02 0.02 Mixed B1, B2, B8 213m2 07/00594/FUL Three additional industrial units. Expires 26/09/10 Hinckley Dennis House, Cotswold Estates Ltd 0.34 0.34 (651m2) B1 B1 651m2 07/00742/OUT Demolition of existing building and erection of new building comprising 651m2 of office space. Expires 25/09/10 4 Hawley Road Hinckley North of Coventry Road Crest Nicholson (Midlands) 4.7 4.7 Mixed B1, B2, B8 9363m2 07/01150/FUL Mixed commercial development comprising B1, B2, B8 and Sui Generis Uses. Expires 12/12/10 Ltd Hinckley Land between Upper Bond Silvermile Worldwide Ltd 0.03 0.03 (262m2) B1a B1a 262m2 08/00037/FUL Demolition of existing buildings and conversion of remaining industrial buildings to form B1a offices and 17 apartments. Street and Neale's Yard Expires 24/04/11. Hinckley Essentia House, 56 Upper Glenslade Property Ltd 0.16 0.16 (493m2) B1a B1a 493m2 08/00086/FUL Demolition of existing offices, erection of new offices and conversion of mill building into 23 flats. Expires 24/04/11 Bond Street Hinckley Wharf Yard Benchmark Properties 0.06 0.06 (188m2) B1a B1a 188m2 08/00136/FUL Dental lab, 2 offices and 9 apartments. Expires 11/04/11 Hinckley Westmoreland Farm, R & T Mayne 0.50 0.5 (484m2) B1c B1c 484m2 09/00101/FUL Change of use of agricultural buildings to B1c use. Expires 09/04/12 Rogues Lane Hinckley Atkins Bros Ltd, Lower HBBC and North Warks & 1.27 1.27 (2269m2) B1a B1a 2269m2 09/00141/DEEM Mixed use development with erection of college building and redevelopment of listed Goddard Building with offices Bond Street Hinckley College and creative industries. Expires 04/09/12 Hinckley 136 Ashby Road Mr Tim Fergus 0.12 0.12 (324m2) B1c B1c 324m2 09/00704/COU Change of use of car showroom to mixed A1 & B1C. Expires 28/10/12 Hinckley Clarence Buildings, 3A Croskeep Limited 0.01 0.01 (101m2) B1a B1a 101m2 09/00904/COU Change of use of part of first floor and ground floor entrance lobby from A2 to B1a usage. Expires 25/01/13 Market Place Kirkby Mallory Coach House In,, Church Rd Everyman Racing Ltd 0.03 0.03 (305m2) B1a B1a 305m2 09/00131/COU Change of use to office accommodation. Expires 29/04/12 Market Bosworth Unit 3, Station Rd Ind Est. Mr T Clinton 0.15 0.15 (549m2) B1c B1c 549m2 08/00824/FUL Demolition of existing building, erection of 3 industrial units. Expires 17/12/11 Nailstone Former Nailstone Colliery Swip Ltd 9.50 9.31 B8 B1, B2, B8 94,971m2 06/00980/OUT Remediation and redevelopment of the former colliery to provide a mix of uses including distribution and storage (B8) 0.19 B1 and small business uses (B1, B2, B8) (The whole site is 143 ha). Expires 06/03/11 Newbold Verdon 68 Mill Lane Mr S Smith & Mr N Smith 0.10 0.1 (91m2) B1a B1a 91m2 08/00260/FUL 12 apartments and offices. Expires 12/06/11 Peckleton Peckleton Lane Business Hammond Grange Ltd 0.13 0.13 Mixed B1, B2, B8 378m2 07/01459/FUL Erection of industrial unit. Expires 25/02/11 Park, Peckleton Common Peckleton Manor House, Manor Lane Mr Marcus Palmer 0.03 0.03 B8 B8 270m2 08/00928/FUL Change of use of agricultural barn to B1a and B8. Expires 12/11/11 Peckleton Manor House, Manor Lane Mr Marcus Palmer 0.004 0.004 (42m2) B1a B1a 42m2 09/00315/COU Change of use of barn to B1 (B1 moved from 08/00928/FUL). Expires 12/06/12 Ratby Alexandra Stone Works, Alexandra Stone Co Ltd 0.11 0.11 B2 B2 1058m2 07/01430/FUL Demolition of existing building and erection of industrial building. 5.75ha site, expires 07/03/11 Desford Lane Ratby Pear Tree Farm Cawrey Ltd 0.39 0.39 (1360m2) B1 B1a, B1c 1360m2 08/01123/FUL Erection of 3 business units. Expires 25/03/12 Shenton Shenton Station, Dadlington Mr R Golding 0.0056 0.0056 (12m2) B1c B1c 12m2 09/00865/COU Part COU from station to glass craft studio. Expires 17/2/13 Road Sheepy Parva Sheepy Parva Farm, Mr Craig Miller & Ms Sarah 0.23 0.23 (426m2) B1a B1a 426m2 09/00414/FUL Change of use and extension of existing barns to form 4 B1a office units. Expires 31/07/12 Wellsborough Road Price Stanton Under Bardon Off Victoria Road, Wilson Bowden Properties 1.22 1.22 Mixed B1, B2, B8 1.22 ha outline site has had ground cleared. 01/00458/CONDIT granted outline permission for 14 years. Expires 05/02/16 41SW046 Beveridge Lane Industrial Ltd Estate Stoke Golding Unit 16, Willow Park Ind Autowash Engineering Ltd 0.16 0.16 (360m2) B1c B1c 360m2 08/01088/FUL Erection of industrial unit. Expires 25/02/12 Estate, Upton Lane TOTAL 16.91 6.06 6.11 0.01 0.43
Page 1 2009-10
Extensions on Existing Employment Sites Bagworth 256 Station Road Markfield Plastics Ltd 45m2 B8 45m2 09/00669/FUL Extension for storage unit. Expires 02/12/12 2 Watling Close, Sketchley Burbage Lane Industrial Estate Lee Ann Fashions 300m2 B2 300m2 05/00172/FUL Extension to factory. Expires 14/04/10 3 Watling Close, Sketchley Burbage Lane Industrial Estate Crane Electronics Ltd 308m2 B1, B2 308m2 06/00682/FUL Two storey factory extension. Expires 16/08/09
Burbage Unit 5, Sapcote Road Ind Est Asbestos Abatement Services 107m2 B1c 107m2 09/00153/FUL Demolition of existing factory & construction of 2 storey unit. Expires 01/05/12 Carlton Common Farm, Trafford Knitwear Ltd 766m2 B1, B8 766m2 07/00172/FUL conversion and extension of farm buildings to light industrial use and storage. Expires 04/04/10 Barton Road Desford Peckleton Lane Caterpillar (UK) Ltd 61,583m2 B8 61,583m2 99/00853/FUL Phase 2 - Expansion of storage facilities, realignment of highway, hard standing areas, mounding & landscaping. Work only completed on highway, mounding & landscaping proposals Desford Desford Hall, Leicester Lane Shropshire Land Co 350m2 B1a 350m2 08/00985/FUL Additional office accommodation within roof space. Expires 23/12/11 Hinckley K2, Nuffield Road Ad Hoc Storage Ltd 827m2 B8 827m2 09/00696/COU COU from B1/B2 TO B8. Expires 15/12/12 Hinckley 7 Jacknell Road Printing & Packaging Ltd 455m2 B2 455m2 09/00792/FUL Extension to industrial unit. Expires 02/12/12 Hinckley 23A Harrowbrook Road Greaves and Ellis 60m2 B2 60m2 09/00804/FUL Extension to industrial unit for MOT testing. Expires 10/12/12 Kirkby Mallory Mallory Park, Church Road British Automobile Racing 335m2 B2 335m2 08/01131/FUL Extensions and alterations to workshop & showroom. Expires 06/02/12 Club Thornton Merrylees Farm, Merrylees Mr & Mrs Vero 146m2 B1a 146m2 07/00250/FUL Conversion and part reconstruction of outbuilding to B1 office. Expires 16/05/10 Road TOTAL 0m2 1116m2
Page 2 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 8 MARKETING DETAILS FOR TUNGSTEN PARK, HINCKLEY 3 !/4 5! !"#$% & '()"*+ ,+-. ./ .0 /&+.0. 01 6"78!/! 2 ) (( .' 3!F%! 4/ !G G ! %!
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UNIT STATUS TOTAL SIZE SALE RENT UNIT R UNIT Q PRICE PAX * UNIT S
UNIT T (GEA) (Excl VAT) (Excl VAT) EXISTING INDUSTRIAL UNIT U UNIT UNIT V UNIT W
SQ FT SQ M UNIT P UNIT H UNIT N UNIT X UNIT Y K UNDER OFFER 2,475 230 £ 244,000 £ 13,500 UNIT M Underground Valet Foul Pumping Bay UNIT L Station UN L Available 2,400 223 £ 240,000 £ 13,250 2.5 m Height acoustic fence Shed UNIT K UNIT D M Available 2,475 230 £ 244,000 £ 13,500 UNIT Z UNIT F N SOLD UNIT C
Car sales display P SOLD C C C C C C C A C A C C C Q SOLD A C C C A C C C A C C C UNIT A C C C C C C C C R SOLD C C Proposed Electricity A A A B Substation UNIT B A A B A A S SOLD B B B A A B A A Car sales B B A A A display B A A A B B Legend for Indicative B A T LET B A A es Landscaping scheme B cycl B B Existing mature landscaping UNIT E B and planting adjacent to U LET B Mitsubishi B existing towpath hedge to be Car showroom retained. V Available 2,400 223 £ 240,000 £ 13,250
W SOLD
X&Y Available 4,951 460 £ 465,000 £ 27,000 TRINITY MARINA Boat mooring etc.
* Assumes 10 year FRI lease with Tenant's Break Option at Year 5
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24 DE MONTFORT STREET LEICESTER LE1 7GB Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 9 MARKETING DETAILS FOR THE ATKINS BUILDING tkins factory site
Detailed Designs: Goddard Building
At the heart of the Town, the Grade 2 Listed Goddard Building as a new creative industries’ hub will provide managed work spaces, exhibition and gallery space, performance and rehearsal space, retail and a café bar area, conference and meeting space and general office units for start-up and growing enterprises.
Synergy, meaning working together, best describes the beneficial interplay of the Goddard Building, the new College and the Town where the whole will be greater than the sum of its parts.
The Goddard Building’s simple, open floor configuration of shallow width and regular fenestration allows the multitude of new activities to be readily accommodated with flexibility for incremental or radical change in the future. The tall windows will continue to flood the interiors with daylight and sunshine throughout the day and the refurbished opening vents will maintain natural ventilation. The thermal mass of the building fabric will assist in the balancing of the internal temperature.
New arrangements for external access and internal circulation incorporate the retention of the distinctive central archway for the main reception, a direct entrance to the retail and café bar area adjacent to the College main entrance and new lifts to provide access for all. The café bar will also incorporate an external decked area.
As far as is practicable, use has been made of many of the building’s existing and evolved features as a factory including loading doors, wall openings to former building extensions (now demolished) and obsolete lift shafts. The cast-iron columns and suspended timber floors to the original wing together with the exposed timber roof spaces throughout are preserved for their intrinsic value and character. Where new partitions sub-divide the wings, clerestory glazing will be used to allow space to continue to flow and the conserved features to be read.
West Elevation to Lower Bond Street
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Combined Illustrative Masterplan
The development site, incorporating the new College building and the existing Goddard building, will also contain open air car parking. Vehicular access will be from Druid Street, in the same location as the previous road access to the Atkins Factory.
Extensive soft landscaping and new tree planting along the Druid Street boundary will screen the car park from the residential properties, and planting within the car park will provide a visual link with the green open space around the Unitarian Chapel.
The College building will be located along the northern edge of the site allowing the car park to step down towards the Goddard building in a series of terraces. Servicing for the College building will be directly from the car park and that for the Goddard building will be at the lowest part of the site, where a designated number of disabled parking spaces will also be provided.
The main pedestrian entrances to both buildings will be from a new paved forecourt opening onto Lower Bond Street. This will link through between the buildings to connect with an extensive pedestrianised space containing hard and soft landscaping features, and will create an attractive open area to be enjoyed by the users of both buildings. Covered cycle spaces close to the College and a new bus lay-by on Lower Bond Street will enhance the ‘green’ credentials of the development. Paved Forecourt and Public Realm
Site Masterplan
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Access & Transport
Access
Access into the site will be taken from Druid Street. This will be the only vehicular access into the site and will accommodate deliveries and access to a 59 space car park. Additionally there will be a 35 space car park to the north of the site accessed via Druid Street at the rear of the Hollybush public house, a redesigned Holliers Walk car park to include 41 spaces and a 96 space car park on the opposite side of Lower Bond Street.
Pedestrian and cyclists will be able to access the site directly from Lower Bond Street and from Druid Street.
The service vehicle and on-site car park access is via Druid Street. This is a one-way road requiring vehicles to approach the site via closely parked, narrow residential roads. The transport assessment will review in detail the potential access options.
Transport Assessment
A Transport Assessment is currently being prepared to inform and support the joint planning application for the College and Creative Enterprise Centre. This will take into account the impact which the proposed development will have on the surrounding highway network and road junctions at various times of the day including local parking issues. The Transport Assessment will accompany the planning application and will be considered by the Borough Council and Leicestershire County Council in the context of the wider development proposals.
Proposed Main vehicular access from Druid Street Parking Locations
A Travel Plan
A separate Travel Plan is also currently being developed for the College and Creative Enterprise Centre to encourage staff, students, employees and visitors to carry out their everyday activities in a more sustainable manner. The aim of the travel plan will be to minimise the impact of travel on the environment. The measures proposed will support and encourage people to use their cars in a more sustainable manner and in doing so will promote other sustainable forms of travel to and from the development site.
On-Street Parking
There are numerous uncontrolled onstreet parking places in the vicinity of the site. These will be available for use by staff, students and employees. This will be monitored and it may be necessary for a residents parking scheme to be introduced if this is considered necessary.
Speeding
On site observations indicated that the parked vehicles on Druid Street make speeding difficult, as vehicles are required to drive slowly in order to navigate along the road. Lower Bond Street has a wide carriageway, and there are also traffic signals at the top and bottom of the hill, which help to reduce the speed of vehicles in this location.
Crossing
Lower Bond Street has a wide carriageway and pedestrians will be required to cross from the car park to the site. Although there are signal pedestrian crossings at the top and bottom of the hill, the desire line for pedestrians is straight across the road. As a result it may therefore be necessary to introduce further pedestrian crossing facilities within this location.
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Size area area Size area Type sq.ft. sq.m. Type sq.ft. Studio G1 L 450.00 41.81 S 100-160 Studio G2 L 450.00 41.81 M 160-345 Studio G3 L 450.00 41.81 L 345-680 Studio G4 M 202.00 18.77 Studio G5 M 188.00 17.47 Studio G6 S 92.00 8.55 Studio G7 S 92.00 8.55 Studio G8 M 188.00 17.47 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Totals 2112.00 154.40 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 10 SUMMARY OF EMPLOYMENT LAND AVAILABILITY AS AT 31 MARCH 2010, HINCKLEY AND BOSWORTH BOROUGH COUNCIL
Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 11 TABLE OF RECENT DEALS FOR INDUSTRIAL AND OFFICE SPACE IN HINCKLEY Table of Industrial Deals: Hinckley Date Address and Date Size(ft2) Description and Quoting Condition Achieved Rent (ft2) Rent (ft²) Industrial D3-D6, Harrowbrook 11,627 Single storey block of four Poor Achieved rent unknown Industrial Estate, industrial units quoting rent 1/09/2010 Fleming Road of £4.53 Quoting rent of £4.53
Unit A Harrowbrook 2,400 Single storey industrial unit Poor Achieved rent unknown Industrial Estate, with office accommodation 1/08/2010 Nuffield Road quoting rent of £3.50 Quoting rent of £3.50
Unit 19, Dodwells Bridge 5,575 Detached Industrial Poor £2.69 Industrial estate, warehouse unit quoting 25/06/2010 Jacknell Road rent of £3.26
Unit 6, Teal Business 2,096 Single storey industrial Good £6.20 centre, Dodwells Road, warehouse unit quoting 26/05/2010 Hinckley rent of £6.20
Unit 8A, Dodwells 2,455 Two storey Good £5.30 Bridge Industrial Estate, industrial/warehouse 15/04/2010 Jacknell Road building quoting rent £5.30
Unit 1, Maizefield, 2,966 Terraced single storey Good Achieved rent unknown Hinckley Fields industrial unit quoting rent 01/04/2010 Industrial Estate of £5.39 Quoting rent of £5.39
LS/RS King Sturge 19/10/10 Table of Industrial Deals: Hinckley Date Address Size(ft2) Description and Condition Achieved Rent (ft2) Quoting Rent (ft²) Industrial Hunts Building, Unit 1-3, 6,447 Property comprises a Poor Achieved rent unknown Burbage Road building of brick 01/01/2010 construction quoting rent Quoting rent of £3.00 £3.00 Unit K1-K2, Nuffield 10,593 Detached industrial unit Poor £3.40 Road with office 01/01/2010 accommodation quoting rent of £4.34 Unit K-M, Tungsten 2,476 New single storey Good £5.45 Park, Coventry Road industrial building quoting 21/12/2009 rent £5.45
Hinckley Logistics Park, 96,500 Large industrial units with Good £5.50 Sketchley Lane quoting rent of £5.75 15/12/2009
Unit 6A, Sapcote Road 1,575 Single storey industrial Good £6.00 Industrial Estate, unit recently refurbished 02/11/2009 Sapcote Road quoting rent of £6.00
Venture Court, Hinckley, 8,585 Two storey industrial Poor £2.91 LE10 3BT building with office 01/11/2009 accommodation on the first floor quoting rent £2.91
LS/RS King Sturge 19/10/10 Table of Freehold Industrial Deals: Hinckley
Date Address Size(ft2) Description and Condition Achieved Rent (ft2) Quoting Rent (ft²) Industrial Unit 23, Dodwells Bridge 6,267 Single storey industrial Poor £275,000 Industrial Estate, unit with attached single (£43.88) 24/02/2010 Jacknell Road * storey offices quoting price £300,000
Table of Office Deals: Hinckley
Date Address Size(ft2) Description and Condition Achieved Rent (ft2) Quoting Rent (ft²) Office The Factory, Hawley 12,787 Two storey office Poor Achieved rent unknown Road building quoting rent 14/12/2009 £6.49 Quoting rent of £6.49
25 Castle Street 720 Office suite above Poor £8.33 ground floor retail units 04/08/2009 quoted rent £8.33
LS/RS King Sturge 19/10/10 Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 12 EXTRACT FROM 2001 ADOPTED LOCAL PLAN PROPOSALS MAP
Prospect Leicestershire Limited Earl Shilton and Barwell Appendices to Employment Land Assessment
APPENDIX 13 COMMUNCIATIONS PLAN
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