Page 1

Property Advantage West Midlands Edition

Issue 23 www.propertyadvantage.info

West Midlands

property advantage – the guide to regional development & regeneration

The newest jewel in the city’s crown. Square Dot sign off council refurb project with a flourish

23


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Contents

03

Inside advantage From your Editor, Ian Halstead June‘s news that Birmingham’s towering £80 million courts complex had fallen victim to the coalition’s spending cuts was predictable a month earlier, when it became clear that big-ticket projects yet to break ground would be targeted. Officially, the Ministry of Justice - which spent three years telling everyone the scheme was vital, to replace Birmingham’s rundown and inefficient magistrates’ courts - has merely postponed the project to see if it is ‘affordable’. The word is clearly a moveable feast, given that the department has already spent some £12m buying the Eastside site, and blown millions more on advisers, agents, and most of all, on bringing in architects Denton Corker Marshall to design the tower.

More importantly, what future has Eastside in the short-term, given that its much-touted public sector anchor has disappeared? Glenn Howells will need to be at his most innovative and radical best, to conceive a viable masterplan for a sprawling area long seen, especially by the city council, as the city’s next economic development zone. Mike Whitby once described the courts complex as ‘crucial’ for Eastside, and Masshouse Developments regarded it as equally important to establish the site’s credentials, particularly as a location for public sector relocations. Had Labour managed to stay in power in Birmingham, of course, the new library - at least, the one designed by Lord Rogers - would have been close to completion on Eastside, and provided the perfect anchor to give the zone critical mass. Hindsight is all, but some of those who voted out the original library proposals, and chose instead the Centenary Square site, must surely wish they hadn’t. Yours, Ian Halstead Editor, Property Advantage

Front cover image. The newest arrival on Birmingham’s city centre streetscape, the Cube, is on course for completion this summer, and on p9, PwC partner Matthew Hammond gives his thoughts on the scheme’s progress, and its future. Our eye-catching visual is a shot of the atrium, by photographer Craig Holmes.

Contents 04 News & Deals. – JLL head targets relocation. – CBRE’s Hancox on the road. – St Mods’ Murray looks ahead. 08 Urban Regeneration. – Howells is thinking positive. – Hammond takes long view. 12 Sustainability. – WRC eyes up office deals. – Amelia lands at Bromford. – Jones likes what he sees. – Square Dot deliver again. 18 Coventry & Warwicks. – AWM’s Roberts is bullish. – Rental market takes off. 22 Property Finance. – Handelsbanken’s view. 23 Point of View. – by Hereford’s Jon Turner.

Property Advantage is conceived, designed & produced for you by: Open Box Media & Communications 32–35 Hall Street Birmingham B18 6BS +44 (0) 121 608 2300 www.ob-mc.co.uk Contact. Samantha Skiller sam.s@ob-mc.co.uk Stuart Walters stuart.w@ob-mc.co.uk Design & Art Direction. Lee Murphy lee.m@ob-mc.co.uk Editor. Ian Halstead halsteadian@aol.com The Publishers wish to emphasise that the opinions expressed in Property Advantage are not representative of Open Box and accept no responsibility for the views expressed by our contributors.

NB:


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

News & Deals

04

All the latest... Thompson looks to the autumn.

Jan Thompson, head of Jones Lang LaSalle’s Birmingham office, expects good things later this year from Marketing Birmingham, as it looks to take advantage from its fledgling relationship with Locate in Birmingham. “They were quite successful in terms of their original brief, and it’ll be interesting to see how they now sit with an inward investment agenda,” he says. “Their co-location with Locate is obviously deeply political though, as they are still looking for new office space together. I expect to see more about their new strategy this autumn, because we do need to fine-tune the way we look to attract Lyons Review relocations. For me, we need to focus more on matching our regional strengths with the specific requirements of government departments. Obviously, it will take time before a more a strategic view can be adopted, but I‘ve a good level of confidence that Marketing Birmingham will achieve its new aims.”

Your news here... Send your news & deals to:

propertyadvantage@ openboxpublishing.co.uk Reshuffle at Pinsent’s. Partner Tom Johnson has been appointed head of Pinsent Masons’ 60-strong Birmingham property team, replacing Joanna LawsonKing. He will continue as head of the firm’s hotels practice, and Lawson-King will focus on client relationships, property investment and new business.

St Mods in the frame. St Modwen

has been shortlisted for a major resi-led regeneration scheme in Hampshire, along with Argent and Taylor Wimpey. The project, on redundant military land in Aldershot, would involve 4,500 homes, with schools, leisure and community space. A decision is expected by the end of the year.

Stoke decision looms. A decision is

expected in July, about the masterplanning contract for Stoke’s historic town centre. The North Staffordshire Regeneration Partnership shortlisted six teams, Atkins, BDP, Foster & Partners, Savills, Urbed and Macreanor Lavington, from 24 pitches. Formal tenders are now being assessed.

New brand for newest name. A new brand is set to be

unveiled in July, after the merger of two of Birmingham’s best-known property firms. GBR is moving to Phoenix Beard’s Newhall Street premises at the end of June, and will also take advantage of its office in London’s Cavendish Square. GBR specialises in office agency work, whilst its new partner focuses on the industrial sector, and is well established in the asset management industry, so the deal looks a perfect fit. Phoenix Beard’s institutional clients include Standard Life Investment, Threadneedle and Wesleyan Assurance. Phoeniex Beard’s MD, Simon Farrant, takes on the same role at the merged group, and GBR’s founding trio of directors, John Griffiths, Stephen Benson and Simon Robinson will join Catherine Gabriel and Robert Buck on the management board.


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

News & Deals

RLB heading north. Birmingham-

based Rider Levett Bucknall has been appointed cost consultant to the world’s newest nuclear reactor programme. It will work on Finland’s Olikuoto 3 project with France’s Sterling Quest. The reactor, whose construction has been hugely controversial, is due to begin operations in 2012.

Hat-trick for Argent. Argent’s Eleven Brindleyplace has signed three new occupiers; with business advisers Friend taking 11,100 sq ft across two floors, highprofile recruitment consultants Robert Walters signing for 4,500 sq ft, and the West Midlands IoD moving its office and members’ hub from One Victoria Square.

Sat-nav time for Ashley. CBRE’s head of office agency, Ashley Hancox,

has taken on a second role, as head of regional office agency, covering the firm’s regional profit centres, including Glasgow, Leeds, Liverpool, Manchester and Southampton. He’ll probably spend two days a week in Birmingham, but will then be off on his travels, and will also be spending time in London ensuring that the regional operations fit smoothly into the national strategy. “It’s a new role, so it will evolve, but essentially it is about joining up the different teams across the regions, and trying to make sure that we are all talking to each other,” says Hancox. “It’s about connectivity. If say, the Birmingham office is acting for a national accountancy practice, then we should be acting for the same client in Manchester and Liverpool and elsewhere. “Under the pressures of recession, people tend to focus on what is happening in front of them, so we need to place all the regional centres into a national context. We have some incredibly talented people out there, so I’m certainly not trying to duplicate what they do, just to help co-ordinate their activities more efficiently.”

HEREFORDSHIRE VALUABLE INDUSTRIAL INVESTMENT 3 DETACHED MODERN BUILDINGS ALL LET ON FRI LEASES VACANT SITE FOR FURTHER DEVELOPMENT TOTAL SITE AREA: APPROX 2.7 ACRES CURRENT RENTAL INCOME: £127,000 p.a.x Offers based on

£2,250,000

(plus VAT)

06


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

News & Deals

Murray eyes new regen model. One of Birmingham’s best-

known regeneration specialists, St Modwen’s Mike Murray, believes future urban renaissance will have to be driven by a new business model. “The rule book on urban regeneration was ripped up two years ago, when the onset of recession meant people could no longer rely on rising values,” he says. “Was that true regeneration, or was it just property development by another name? The biggest issue, going forward, is that the public sector can no longer be the driver of regeneration, but does the private sector have the capacity to do so at the moment, when the recovery remains so uncertain? We also need to focus more on place-making, and to remember that it’s not just about delivering new space, you need all the other stuff to make that place work; from issues around social cohesion, to thinking about how new green technologies can be used to replace less efficient and outdated systems.”

UK DOORSETS UK DOORSETS UK DOORSETS UK DOORSETS

Hilton moves step closer. Plans to transform one of Wolverhampton’s biggest eyesores should move ahead in July, according to the city‘s development company. A planning application is expected to go in for the Fox Hotel site, which will ultimately house Hilton’s budget brand, Hampton by Hilton, in a £15m development.

Heads-up on fossil fuels. MADE’s

latest lecture in its Talking Cities series will be given by Arup’s chairman of global planning, Peter Head, on July 15th. He will speak on reducing fossil fuel dependency, both for environmental reasons, and to counterbalance possible oil shortages. The venue is Birmingham Conservatoire.

07


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Urban

08

Howells sees HS2 proposal as new chapter for Eastside PwC team at the Cube for the long-haul. News that Britain’s next highspeed rail network might well have a station in Eastside, inevitably brought out the naysayers in Birmingham’s property community. To hear the most pessimistic views about HS2’s potential impact, you could imagine that Enola Gay’s bombardier was already peering downward at the 420-acre regeneration zone. Fortunately, one of the city’s most innovative urban thinkers, architect Glenn Howells, was swiftly called in by the council to create an Eastside masterplan,

incorporating the possible arrival of the new rail link, and its Curzon Street station. Always one for historical parallels, Howells notes that Curzon Street was Birmingham’s first station, receiving trains from Euston for some 20 years, until it was sidelined. Typically, even before the project’s official start-date, he was already buzzing with ideas about how the masterplan might evolve, and how it could also fit into the Big City Plan. “It is very much a new chapter of the Eastside story,

Millennium Point’s new Science Garden

it is certainly not a ‘tear it up’ moment. I’ve heard people talk about the land being blighted, but that really is not how I see it,” says Howells. “One interesting challenge will be how you move people from HS2 to New Street. Some 8,000 passengers are expected to arrive every hour, but it’s not just about efficiency, it’s about identifying the best and most interesting route. “We do need to maximise the benefits for Birmingham’s retailers, in having so many people in the city centre,

and think about how the new station could fit with the existing infrastructure. Could Moor Street Station and HS2 share a concourse, for example? “We also need to use the HS2 investment and activity to benefit Digbeth, and perhaps it is time to think of Moor Street Queensway as a new square, and as a front, rather than as a back.” Given the appalling pedestrian linkage between Moor Street and New Street, ensuring a high-quality route for train passengers to and from the new station will be of critical importance. His masterplan will also take account of the possibility that future governments, or even the present one, could decide to axe the HS2 programme. “We have to devise a cunning plan, so that all the new stuff still works if - ten years ahead - the proposals for the line, or the station, are abandoned,” says Howells. “It’s too early to imagine what options will be preferred, but there are a range of possible temporary uses for the land; from the really dull one (a surface car park), to events-based activities, or even temporary buildings, related to the use of adjacent buildings.” Millennium Point, and Thinktank continue to attract more than a million visitors a year to Eastside, of course, and the arrival of the eye-catching science garden will enhance the area‘s regeneration, and be expected to generate even higher footfall. Meanwhile, the council’s Locate in Birmingham team presently located in Millennium Point, with Marketing Birmingham - is fine-tuning its inward investment strategy. Jack Glonek, the authority’s assistant director for investment, enterprise and employment, is


Property Advantage West Midlands

optimistic that Deutsche Bank will take a significant role in highlighting both Birmingham’s merits as a ‘back office’ location - it has almost 70,000 sq ft in Brindleyplace - and the quality of its office accommodation. “Over the last six months, they have become increasingly comfortable in talking about their operations in Birmingham,” he says. “For the first year or eighteen months, they wanted to get themselves into their new building, and to get bedded down, which they now have. Everything has gone as planned, and they’ve just increased their head-count.” The council hopes a European Symposium , looking at ‘back office’ issues for the global financial services sector, will be held in the city in September, and that the bank’s UK head of corporate real estate, David Price, will be able to speak about its Birmingham experience. Whilst planning for that event was underway though, a significant city centre office letting - especially for the public sector - was completed, when the Highways Agency moved its 700 staff into the gleaming new 60,000 sq ft chunk of BREEAM Excellent space it has taken in the Cube. Locate in Birmingham’s manager, Mike Loftus, says the offices have already been inspected by officials from the Government Office of the West Midlands (GOWM). “I think the Cube letting is a great example of the way that government agencies are now occupying space in a more efficient way,” he says. “I also think it sends out very positive messages to potential recruits. We‘re always trying to attract talented people to the public sector, and the Highways Agency has demonstrated that civil servants don’t have to work in what would be regarded as secondary office space.” Glonek says a regional initiative is now underway to increase the success rate, when Birmingham and the West Midlands seek to win civil service relocations from London and the South-East. “I’ve already met Trudi Elliott (GOWM’s regional director), Mick

Issue 23 www.propertyadvantage.info

Lafferty from AWM, and Martin Reeves, from Coventry MBC, and we’ve had mature conversations about how more public sector bodies can be attracted to this region,” he says. “We’re now looking at differentiating our regional offer, to marry particular requirements to specific locations, so there are fewer examples of us bidding against each other. It’s not just about property, the local skills base would also be important, as would Birmingham’s expertise in financial services.” The arrival of the Highways Agency staff was also a powerfully symbolic event for Pricewaterhouse Coopers (PwC) partner Matthew Hammond (right); who - with two colleagues - has been handling the administration of the Cube‘s builder, BuildAbility, and its parent company, Birmingham Development Co, since the end of March. Lloyds TSB, which called in the insolvency practitioners, agreed to fund the completion of the 500,000 sq ft mixed-use scheme, which remains on target for

Urban

practical completion this summer, but the administration certainly won’t be a short-term affair. PwC may not begin formally marketing the Cube as an investment opportunity until 2011, as its team wants to achieve a very high occupancy level, before contemplating a sale, to achieve the best possible return for creditors, and the administration itself could last until 2012. Ken Shuttleworth’s Cube concept (above) included a boutique and a roof-top restaurant, with the latter a particularly important element of both the design, and the scheme’s appeal, and talks

09

remain ongoing to ensure both will be included. Meanwhile, construction of the two residential zones - one for investment purposes, the other for ‘buy to occupy’ uses - is proceeding at record pace, and to the original specification. A significant number have even reached the handover phase, ahead of target. “Having an anchor tenant such as the Highways Agency is brilliant, in terms of the construction project, and for going forward,” says Hammond. “It is still an occupier market, of which we are very aware, and we know that potential tenants will be looking at other schemes, but we are very upbeat about this project, in terms of the retail, office, hotel, and restaurant space. “It wasn’t an administration we took on lightly, we knew it would be a long-term commitment, and of course we are very reliant on - and appreciate - the tremendous efforts of the agents, the sub-contractors and the management team, all of whom are equally committed to completing the Cube.”


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Urban

10

New WRC chief is bullish on hat-trick of office deals Walsall Regeneration Company’s new chief operating officer, Ashkay Parikh, has a tough act to follow in Peter Cromar, but it must be said that he’s made an impressive start. Sitting in his team’s unpretentious Ablewell Street offices, he speaks with fluent confidence and knowledge about the challenges ahead, and

is also impressively passionate. WRC certainly hasn’t chosen one of those aggravating public sector apparatchiks, who are long on the language of regeneration, but don’t appear to comprehend the delivery process. His first five months has seen Ashkay focus on strengthening external relationships, and taking a radical look at the company’s

biggest scheme; Walsall Gigaport. “It was envisaged as a £400m technology-based office corridor, when outline permission was granted in October 2008, but much has changed, and I am working to shift its initial focus away from technology,” he says. “I’ve been talking with our public sector partners - such as the police, the Primary Care Trust and the housing association - to identify how they plan to drive efficiencies into their operations, and how they might rationalise

their property portfolio. “For me, particularly given the scale of the spending cuts, the time is right for the public sector to look very closely at co-location, and the use of shared services.” Ashkay believes the initial phases of the mooted 750,000 sq ft corridor should be public sector lettings, allowing the WRC and the council to seek a technology partner for an established location, rather than attempting to lure them to a scheme which exists only as a CGi. His strategy would be to then reach agreement about the installation and operation of a technological platform, offering the next generation of broadband and fibre-optic services, before targeting an inward investment programme at the private sector. “We could use the initial lettings, and the technology, to create an advanced service delivery hub, perhaps augmenting the existing healthcare cluster, and then trying to increase the town’s professional services sector,” suggests Ashkay. “The new Walsall College has a strong vocational focus, and I think that would also prove attractive to employers, as would the technology of course.” Given the short time which Ashkay has been in post, he’s already made significant


Property Advantage West Midlands

progress with potential tenants for the office corridor. “We have secured the agreement of Walsall Housing Group to locate its new HQ in the Gigaport. They would consolidate their existing offices into a building of around 40,000 sq ft,” he says. “The police are looking to relocate from Green Lane, and would require something like 60,000 sq ft, and we also are in advanced discussions with a third potential tenant, who would require substantial provision alongside the college. “Identifying the needs of your local partners, then de-risking a scheme for the private sector, is a slightly different way of delivering urban regeneration, but one which I think suits the changing economic climate. ”The traditional approach to regeneration, by sweating your land bank, is still valid, but the private sector needs help at the moment to accelerate progress.” Ashkay has been with WRC for five years, so his promotion offers the continuity which the council and others desire, but

Issue 23 www.propertyadvantage.info

Urban

11

Both images: The futuristic first phase of the new Walsall Manor Hospital. he certainly isn’t following his predecessor’s route map. “Peter gave me a good grounding, but now I am moving on, with my own style and approach, which will be very much about collaboration,” he says.

Development Land and High Speed Broadband now available at Rotherwas Thanks to the Rotherwas Futures project, a £19m joint venture between Herefordshire Council and Advantage West Midlands, Rotherwas estate has become fully Wi-Fi enabled. Following an agreement with wireless broadband provider Airband Community Internet Ltd, businesses on Rotherwas estate will now be able to access high speed broadband, with 4Mb, 8Mb and 20Mb services available. Construction of the new infrastructure in the Southern Magazine is also underway which will release 14 acres of land for development for B1, B2 and B8 uses in summer 2010. The new access road completed in June 2008 has given the estate quick and easy access to the A49, M50 and the rest of the motorway network. Currently home to over 125 businesses employing 3,000 people, Rotherwas is largest and the most strategically important employment area in Herefordshire. Companies interested in moving to Herefordshire can contact the Economic Development Team on 01432 383337 or economicinvestment@herefordshire.gov.uk

“We have already spent time ensuring there is clarity about future responsibilities. In the past, we have often driven in the fast lane, and may still do so sometimes, but we must not become bogged down in issues which do not need concern us.

“Delivery must always be our central objective, and as our partners share our convictions and aspirations, I believe we can now move forward, with a stronger understanding of what we are all trying to achieve, and how it can be achieved.”


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Sustainability

12

McCann brings new m Bromford’s affordable Fighting the corner for the five million folk who desperately need social housing was never easy, even before the coalition took the axe to the Homes & Communities Agency‘s budget. It is likely to be autumn before the spending review reveals how much future pain Sir Bob Kerslake’s outfit will suffer, although news that £230 million would be lopped from its 20102011 budget was ominous. Housing associations, such

as Bromford Group, will certainly need their champions, as they fight to deliver sustainable and affordable homes during the fragile recovery, and the Wolverhampton-based organisation looks to have chosen well in its newest recruit. Amelia McCann has been appointed head of development (north), which in Bromford terms spans an area from Rugby to Walsall and Wolverhampton, through Shropshire, Herefordshire, Worcestershire and Gloucestershire, and back to Birmingham and Solihull, so she certainly won’t be short of sites

to visit. “Funding will obviously be far scarcer than ever before, so it will be critical that we can be innovative and creative about finance, but that doesn’t mean we are scaling back our ambitions,” she says. “We know we have to reduce our dependence on HCA funding, and we’ll be looking at our previous proposals to see how that might be achieved, as well as coming up with new ways

to attract funding. “However, we do want to be involved in the major regeneration schemes, as opposed to just the infill stuff, and to identify opportunities where we can be involved in place-making.” McCann entered the affordable housing sector in the early 90s, then gained contracting experience with the Rok Group, before joining the Birmingham office of consultants EC Harris for the last four years.


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

mindset to e mission “I had a fantastic time with ECH, and am still very passionate about what they do, but when I heard about the Bromford vacancy, I decided to do my research. The more I found out, the more I wanted to join them,” she admits. “I wanted to go back into the industry I loved, get a chance to put into practice everything I had learned, and also join a strong brand. I knew

some people who enjoyed working there, and luckily enough, I got the job, although I must admit, I didn’t think I had after the first interview.” McCann’s 14-strong team includes development managers, technical experts and

Sustainability

contract specialists, and they’ve already had an insight into her ‘can do’ approach. “Whether it is internal, or external, it’s important that you do what you say, but there’s no point having ideas and a strategy if you don’t get the relationship management right. Making sure everyone understands the way we need to work is critical,” she says. “One reason I was brought in was for my private sector experience, because I can look at obstacles and see how to overcome them, without being influenced by all the fluffy thinking you sometimes get in the public sector.” McCann is clearly relishing her new opportunities, which will inevitably include tough negotiations with developers and local authorities. “You can’t afford to automatically adopt a ’Yes’ attitude with anyone, and I’ll always stand up for affordable housing. I know the short-cuts

13

developers try to take, and also that local authority data is often out-of-date, so it needs to be challenged,” she says. “At the same time though, I am not going to fight for the sake of it. Bromford won’t compromise its standards, or the quality of its products, so if something isn’t right, you need the guts to walk away. ”You’ve just got to believe in what you do. I’d love to deliver Bromford’s first Code Six houses, and not just as a pilot programme, but is that do-able? I don’t know, but it’s a great aspiration. and better than setting yourself easy targets. Even if we hit Code Five, that would be fantastic.” Amelia meets new colleagues at Bromford’s Tyseley site; site managers Kevin Mallin (left) and Kevin McGrath.


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Sustainability

14

It’s a council work-pla but not as we know th

Birmingham City Council has invested £25 million to transform its Lancaster Circus offices. Ian Halstead went to see the results. Comparing office space from the private and public sectors has traditionally been like contrasting a graceful snowwhite swan with an ugly duckling … and Lancaster Circus was the toolkit for ugly ducklings. Now though, from its eyecatching reception area upwards, the 200,000 sq ft building - which houses 2,000 staff - has been refurbished to the

point where it’s hard to remember the grim and unappealing place it was for so long. Given the massive expense, and lengthy time-scale, to bring forward new office space of course, refurbishment is the way forward for any public sector body, looking to develop a more sustainable property portfolio. The crisp, clean lines of each open-plan floor

have created a welcoming environment, enhanced by the occasional splash of colour, and underpinned by the provision of centralised printing, copying and recycling zones, plus breakout and meeting space, and impressive kitchen facilities. The massive windows, previously half-hidden behind mountain ranges of filing cabinets and towering piles of

documents, now flood the space with light. Their new thermal insulation also supports the climate control provided via a new and energy-efficient chilled beam system. Lancaster Circus’s annual running costs are now confidently projected to fall to just £2 million a year. Even more welcome, for the bean-counters back in the


Property Advantage West Midlands

ace hem Council House, is the news from the authority’s director of property, Peter Jones, that the project has come in under budget. “To be honest, when we did a financial appraisal on the building, in terms of operational savings, reduced running costs, and increased efficiency, a refurb was a no-brainer,” he admits. “We just spent ages convincing ourselves, and everyone involved, that the project would deliver what we required. Now we can see the results, we realise that we certainly chose the right people, and our staff can see and feel the benefits.” Kris Krokosz, managing director of Square Dot - the workplace design consultancy which transformed Lancaster Circus - recalls his first visit …with a wince. “I have to admit, when I walked inside it was like being in the police station in Ashes to Ashes. I hadn’t realised people still worked in such offices, and if the BBC had known, they could have saved a fortune on building studio sets,” he says. “We knew the council wanted to radically alter the way it operated, and the conditions its staff worked in, as part of its Working for the Future programme, and also thought it would be a great challenge to make the building much more sustainable. “The first project we worked on for the council was Lifford House, and in July we are due to finish Lancaster Circus. We know other councils are already looking

Issue 23 www.propertyadvantage.info

at what Birmingham has done, so who knows where this will lead.” In the short-term, Square Dot’s work with the council will take it to the 2010 national awards night of the British Council for Offices (BCO), in October, where Lifford House will represent the Midlands and East Anglia in the best ‘workplace fitout’ category. The Stratford-upon-Avon consultancy has now picked up BCO awards for five projects in the last decade; impressive for any practice, but especially so given that its workforce is just twelve-strong. Peter Jones first encountered Square Dot, when he visited another of their awardwinning projects, Network Rail’s leadership development centre in Coventry, and was immediately impressed. “It’s wasn’t just the way the place looked. They appealed because their ideas had helped Network Rail change the way it operated, which was what we wanted to happen,” he recalls. “We needed to get rid of the old structure - where managers took the window space, and their offices then blocked out the light - and to become more efficient in the way we used our properties. “Now, neither individuals or council directorates ’own’ desks. My team has seven places for ten people, for example, because some people will always be away, on holiday, or out of the office, and it makes no sense to have a work-station for every employee.” Instead - as might be expected in a slick private sector office - all the computers and phones are configured to ’follow’ each staff member, wherever they choose to sit. Equally though, Lancaster Circus doesn’t have the regimented feel, which occurs when workplaces follow rigid design diktat. “We didn’t want to make it too formal, so we didn’t send the picture police or the plant squad in, “ says Jones. “The feedback from Lifford House was very positive, and now we’re just fine-tuning things, on the facilities management side, for example.” It‘s understating the Square

Sustainability

15

Square Dot’s work for Cadbury-Schweppes

Dot projects to call them refurbs, because they have now provided the template for the council’s transformation of its property portfolio. “From day one, we needed to take a very pragmatic view of what they wanted, what they could afford, and what they hoped to achieve,” says Krokosz. “As with our work for Network Rail, it was about building a brand, so everyone would know this was a council building, and making everything coherent in design terms, but also developing a set of guidelines which would work elsewhere. “We had the notional idea of using ‘business districts’ and ‘village greens’, around which

everything else, from colours and materials to fire strategies and DDA compliance could be built, but we also wanted to create something that felt like Birmingham.” Graphics and visuals of the city’s best-loved architecture have been used, to create a sense of place, which really does work in an unpretentious fashion. “Lancaster Circus was in a time-warp. It was dark, dated, confusing, and also reinforced the silo mentality between different floors, and different departments,” says Krokosz, with contagious enthusiasm. “We wanted to transform the way the place looked, but also to pull them away from that public sector kind-of-feel, so we didn’t restrain ourselves, when considering the look of the new space.” Square Dot’s Katy Francioso was then tasked with turning the raft of ideas, musings and possibilities into a coherent design code.


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Sustainability

17

Lancaster Circus offices... “We started from handdrawn sketches before using the auto-CAD system, but this project was slightly different because we helped produce the council‘s guideline document,” she says. “We tried to be as creative as possible, in the way we worked out our ’language‘, and a key issue was to get rid of the ownership of space, and to create more efficient and more flexible ways of working. “We wanted layouts which opened up the space, so people began talking to each other again, and were very conscious that the guidelines would have to work for new-build space, as well as at Lancaster Circus, and for the council’s listed buildings.” The five months spent devising the design guidelines were well spent, judged by both immediate staff feedback, and Jones’s more rigorous assessments. “We really have got what we wanted, however you judge. The £25 million might sound a lot

to people outside the property sector, but believe me, it is very good value for 200,000 sq ft of quality space,” he says. “We didn’t want to throw money at fancy light fittings, or flashy toilets, so all the investment has gone into creating a functional and efficient building, which is sustainable, and which works for the long-term. “The most important aspect though, is that it works for our staff. It’s a massive improvement in the workplace environment, and we now have a design manual so that we can replicate this project in other buildings, which will generate massive savings in procurement costs. ”It’ll be very interesting at the BCO ceremony in October, to see what other people think of the fit-out, and I’m confident they’ll be seriously impressed.”

Network Rail’s Coventry centre.

Lifford House.

Energy Performance Solutions Associates

We specialise in the provision of Commercial and Domestic Energy Performance Certificates (EPC), Home Information Packs (HIPs) and Display Energy Certificates (DEC) via our team of fully accredited assessors. Telephone: 01782 541203 Mobile: 07875 718424 www.energy-psa.co.uk


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Coventry & Warwicks

18

AWM’s Roberts is feelin new technology centr Coventry has been one of the West Midlands’ economic success stories over the last decade, despite turmoil in the automotive industry on which it built its name. However, Phil Roberts, the director of partnerships for Coventry & Warwickshire at Advantage West Midlands (AWM), is very conscious that the sub-region’s economy is much more than simply the city at its heart.

“It has been an economic driver for the full region, for quite some time, but within the area there are major contrasts and significant challenges,” he says. “There is a north-south divide, in terms of business creation, economic performance, social deprivation and suchlike, and the most critical aim is to close that gap, but whilst keeping the sub-regional economy performing well. “We are trying to promote economic prosperity, especially in the north, and to ensure that the major urban areas can perform efficiently as service

hubs and employment centres. Coventry is very important, but can’t be considered in isolation, as the council is very aware.” However, the major development sites are in and around Coventry, reflecting the ready availability of former automotive locations, once used by Jaguar and Peugeot. One of AWM’s biggest headaches has been Ansty Park, near Walsgrave; a 100-acre site originally seen as ideal for manufacturing.

Coventry City Council owns more

commercial property in the city than any other landlord including industrial units and offices across the city, business parks and shops in the city centre and all around the city – all managed by the Commercial Property Management team. This expert team handles a high volume of property enquires every month and with years of experience and a wealth of local knowledge, why not let them help you find what you are looking for. Current availability includes: Offices at Westwood Business Park, City Centre Shops at City arcade and Smithford Way and industrial units at Lythalls Lane Industrial Estate, Hanford Close and Aldermans Green Industrial Estate. Each unit has a small team of designated staff to help you with your property queries/ questions whilst your are a tenant. To find out more T: 024 7683 2748 or go to www.coventry.gov.uk/commercialproperty or visit us at Civic Centre 4, Much Park Street in Coventry city centre between 8.30am 5.00pm Monday to Thursday and 8.30am 4.30pm on a Friday.

“We inherited the location when the agency was formed in 1999, largely because Toyota had gone to Derbyshire because it couldn’t find a site of that size in the West Midlands,” recalls Roberts. “Unfortunately, the economics of inward investment changed very quickly, and most of those projects then went to central and eastern Europe, which shifted our mindset about Ansty.” AWM then promoted the site as a technology location, offering a potential 1.5 million sq of space, because of the nearby presence of several technology


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Coventry & Warwicks

19

ng optimistic as tre moves on

businesses and high-profile universities, which appeared to pay off when telecoms giant Ericsson established its R&D centre there in June 2009. Five months later though, the Swedish group suddenly decided to close its site, with the loss of more than 700 jobs, as part of a major cost-cutting exercise. However, Roberts remains undeterred by the setback, and highlights the construction of the £40m Manufacturing Technology Centre (MTC), jointly funded by AWM and its opposite number from the East Midlands, emda. “Ericsson wasn’t at Ansty for long, but did act as a catalyst for wider interest in the location. Now we want to secure

occupiers for their two buildings, although one difficulty is the time-scale, because they are running their site down towards the end of 2010,” he admits. “However, the MAC is not just a regional project, but has national significance, and represents an initial investment by the public sector of some £40m, which will lead to the creation of a £130m world-class skills centre, which should open by 2012. ”All the funding is now in place, and on the back of its presence, we hope to attract other organisations which focus on R&D, and technology. Work on

The £40m Manufacturing Technology Centre further infrastructure will also start this summer, to increase capacity.” Another major site is Jaguar’s historic home at Browns Lane - recently renamed Lyons Park - where 80 acres have planning permission for 800,000 sq ft of industrial and distribution space. Goodman Group planned to take the site on by itself, but AWM stepped in to form a jv with the Australian developer as it floundered in the recession. “We did look at buying the land before Goodman, but the values were just too

rich. However, when they had difficulties, we acquired a third of the site, and are now investing in infrastructure to help bring development forward, which should be finished by September,” says Roberts. “There is interest, and we are optimistic, because we see Lyons Park as an opportunity site, whereas Ansty is definitely a strategic location. It’s also a well-located site, and we do need to keep employment land active, and not lose it to residential schemes.”


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Coventry & Warwicks

21

Cautious optimism from Coventry as city looks to keep its momentum David Penn (far right), MD of the commercial arm of Coventrybased agents Shortland Horne, is understandably cautious about prospects for the city’s residential market. “There isn’t a massive oversupply of apartments here, and no new stock coming forward, although there is a healthy lettings market, not least because we have 35,000 students here,” he says. “Belgrade Plaza provided a good example of the pentup demand. A would-be buyer couldn’t complete the deal, and lost their deposit, but all 65 apartments at the scheme were then let without problem. “Outside the city centre, Coventry is better off than most urban areas. The population may be just over 300,000, but no-one is more than three miles from countryside, which helps demand, although at the moment, there isn’t enough stock. “There is a bit of a bottleneck being created, because although the new-build developers are starting to look again at their sites, nothing is yet coming forward.“ Coventry’s core office market isn’t worth the name, and Penn can recall just three office blocks being built during the last 15 years, so - like other observers - he is eager to see Cannon Kirk’s 3.2 million sq ft office-led scheme, Friargate, progress. “The plans are enormous, but Coventry needs new office space so badly, that change has to be on a grand scale, it can’t

be piecemeal,” says Penn. “The city always attracts inquiries for decent chunks of office space, because it has a very good relocation package, and will continue to pull people in. Coventry also has a very affluent catchment area and I think there is a lot to come from its relationship with Solihull. ”The real opportunities here are about added value. For resi, offices or retail, the values are so much better than other cities of this size. Cities do have to be careful about promoting outof-town sites, and the council is bang on in promoting the centre, and the opportunities in its masterplan.” At Deeley Properties, director Tim Hurdiss is in a similarly positive, but reflective mood, about the group‘s activities across the subregion, and in the Coventry area. “At Belgrade Plaza, the residential phase is now in solicitors’ hands, so we’re looking to start shortly on building just under 400 units, with a completion date of September 2011,” he says. “At Elliot Park in Nuneaton, we’re on site with the Holland & Barrett space, and are about to sign up a mid-market motor dealership, and we‘ve also got Queensway, a mixed-use scheme in Leamington where the employment space is tied in with an Aldi application, and the first phase would be 26,000 sq ft. ”Across in Birmingham’s Jewellery Quarter, we’re in talks with several parties for office uses at the Kettleworks scheme, and although nothing is agreed yet, we’re having some encouraging conversations.” However, Hurdiss (right) isn’t

allowing the welcome progress on Deeley’s projects to blind him to the wider challenges ahead. “We know it’s going to be another tough year, going forward across all sectors. The government’s debts, and the way the coalition is tackling them will clearly have a massive impact on the economy and the public sector,” he says. “In the housing market, there is activity, but of course people are still finding it difficult to access mortgages. However, we are seeing good demand and rental growth for apartments. At Belgrade Plaza, we even have a waiting list, which has to be a good sign for the wider market. “We won’t be thinking of looking to take up new

opportunities though, we’ll still be working on our existing schemes. We are always looking at what other people are doing though, to see what they are doing right, and of course, what they are doing wrong.” Like Shortland Horne‘s Penn, Hurdiss continues to be impressed by the city council’s approach to urban regeneration, and inward investment. “They are very pro-active about economic development, they’ve been successful over the last decade, and we are very conscious that they want to keep that momentum going. There were good signs at MIPIM, especially about Friargate, and we all need to build on that impetus.”


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Finance

22

Handelsbanken prefers organic route to growth

Handelsbanken’s Birmingham Branch Manager, Pat Hanlon, muses about the bank, its strategy, and the region’s property scene.

“There will of course still be some people who haven’t heard of us, but we were established in 1871 and are Sweden’s oldest listed company. We see Britain as a fantastic market opportunity, across all sectors, and yes, we are still happy to lend on property. “Handelsbanken began operating in Britain more than 30 years ago; we now have 81 branches and are looking to open another three, perhaps four, in the West Midlands in the short-to-medium term. “The bank’s business model is to have local branches working in local markets, so - for example - we believe the best place to service Shrewsbury from, is Shrewsbury, and not Birmingham. “We are confident that we can take better and faster decisions, as we are closer to

our customers, than if we had centralised operations. “We have grown quickly in recent years, as we had just 42 branches in Britain in December 2007, but we still believe the best way to expand our business is through organic growth, customer by customer, branch by branch, rather than to acquire banking assets “Since the beginning of the financial crisis, we have achieved a significant increase in the number of good-quality customers, including property borrowers, across our branch network. “Good property companies, and good property investors, have been eager to take advantage of the market opportunities, and they need a strong, liquid and flexible banking partner. “It is clear is that good customers do not want to be exposed to the vagaries of their bank’s fortunes. We have seen many long-established relationships within other banks come under pressure because of the unprecedented events. “However, we have maintained strong finances throughout, have not approached shareholders or government for support, and have continued to finance our customers and win new business because of this stability. “During 2009, we increased our net property lending by more than £75 million in Birmingham, and although today - judged by media commentary and analysis - it appears virtually all other banks are trying to reduce their exposure to property, it is still a

market we are comfortable with, for the right customer. “There is much talk about the need to re-finance many billions of property deals between now and 2013, but it is clear that many of these transactions will struggle, as they will be under water in terms of equity. “There is also no expectation of rental growth in most sectors, and concerns over rising voids and potential tenant failures, which will make for even more unattractive assets. “However, this might be the source of much-needed supply to the property market, as banks seek to crystallise their losses, which - whilst painful - is probably a required step, if money is to flow in and out of the region’s property sectors. “It is accepted that a large part of the recent improvement in asset values has been down to scarcity of supply, as investors are still really only looking for prime assets. “Although the definition of prime will inevitably again widen, the market pick-up that we are all looking for remains some considerable way off. “In the future though, we are certain that high leverage will not be seen as the virtue that many banks, and borrowers, made it seem in the decade before the financial crisis. “Financial engineering will

be undertaken by far fewer banks and borrowers, and we will see a return to core property and banking fundamentals, at least for a good while. Focus on net cashflow will be critical, as most investors will now discount for void costs. “As to the particular property sectors in this region, there remain significant opportunities. In retail, yields may have gone out by around 200 basis points, but they then came in by around 150 basis points. “In the industrial sector, we see secondary multi-let estates trading at 10% for the net cashflow and nothing for the voids, which has to be attractive - if you have the location, liquidity and management skills. Prime supply remains tight, but recent deals suggest demand at around the low 7% mark. “In the office market, we believe Birmingham’s existing stock of Grade A space will one day give it the edge against other regional centres, as there is unlikely to be speculative activity outside London for several years. “Unfortunately the pain will not ease quickly, and there is an urgent need to find innovative ways of attracting new large occupiers, to bolster our regional economy, and to occupy these buildings. “In recent months, we have worked with such strong Birmingham property names as Calthorpe Estates, Hortons’ Estate, Nurton Developments, IM Properties, AH Field, Mark Smith, LCP, Folkes, Maximus and Evenacre, and we are confident that many others will be attracted by what we have to offer.“


Property Advantage West Midlands

Issue 23 www.propertyadvantage.info

Hereford regeneration scheme is far from being a ‘done deal’ By Jon Turner Director of Turner & Co Ltd, Hereford. Herefordshire council, its director of regeneration, Geoff Hughes, and the chief executive of Edgar Street Grid Ltd, Jonathan Bretherton, are doing a superb job in trying to drive forward a future strategy for Hereford, and what they regard as regeneration. However, more than 13,000 local residents have felt moved to sign a petition against their proposals. The regeneration process has been called by some a ‘business destruction process’ because 20 businesses will be forced to close; to create 250,000 sq ft of retail and leisure space, together with up to 8,300 homes, over the next decade. The principal opposition is not because of the residential proposals, but because of the retail space and a new inner-link road, which the council thinks necessary to service the retail scheme, and then later the residential phase. Geoff Hughes has admitted that at least two, and possibly three, of the major retailers in Hereford are likely to relocate to the new scheme, with the candidates coming from either Boots, Argos, Next or TK Maxx. Should three leave the city

centre there will be substantial space to fill, as there is more than 100,000 sq ft vacant at present. The opponents to the retail proposals fear the new scheme will create a white elephant, with retailers relocating from the city centre and making the existing retail centre into a ghost town, as happened in Wrexham and Kidderminster. The council claims major department store operators, such as John Lewis, House of Fraser and Debenhams are all interested, but this is stating the obvious.

Point of View

The critics believe such retailers will show interest to gain full information about the possible scheme, and to assess if competitors will locate there. If the retail scheme does not proceed, it is possible to put a residential scheme on the old cattle market site, without the expense of a new link road, which will also save city centre businesses from closure. However, as an alternative, the resources promised for the market site could be put towards maximising retail development in an area bounded by Eign Gate, Broad Street, King Street and the A49. This would retain the retail area within the city centre, and enable a good combination of specialist retail shops - provided by local or regional operators - to be provided, allowing Hereford to compete by providing something slightly different to ‘anywhere town’. Little thought seems to have been given to this solution, presumably because the council needs funding from Stanhope to help finance the acquisition of properties for the link road. I seem to be full of criticism, but I accept that a major benefit is the Yazor Brook flood alleviation scheme, which will certainly help Hereford, and assist the future redevelopment of both the cattle market, and Merton Meadows car park, for homes. Such development would not need grants from Advantage West Midlands, or the council, and would be a cost-effective way of providing housing without using greenfield land. However, the car parking

23

which will be displaced would then need to be replaced, although little thought seems to have been given to this, bar the magic words of ‘green transport plans‘. I submit that Stanhope are incorrect, and in particular that Charles Briscoe is wrong, to believe that public opinion is beginning to move in favour of these proposals. He is also forgetting that there could be a judicial review of the consent for the new road, and that even if final consent is issued, compulsory purchase procedures would then have to be undertaken. There would also be a need for a public inquiry, when occupiers affected by the process can make their substantial and well-backed objections. Perhaps Stanhope should consider taking up the break option to extricate themselves from the proposals now, rather than taking the full 18 months which the critics believe has been allowed.


Property Advantage West Midlands Issue 23  

Whether you are in the private or public sector, an occupier or a property professional ‘Property Advantage’ is an essential read. We focu...