Business parks shrug off transport restrictions

Copyright: David Lawson/Financial Times April 1998

Home page

Exactly 10 years ago  an obscure change in planning law opened up  hundreds of sites across the country to businesses trapped in crowded towns and cities. Politicians are now trying desperately to force the genie back in the bottle. But they seem doomed to failure.

  Business parks flourished  on the promise of high-tech buildings,  swish offices and generous car parking in pleasant surroundings. They have become   victim to their own hype, however. Glazed pavilions set in rural splendour are a potent image for drawing in tenants, but they grate on the nerves of also attract the ire of countryside campaigners.

  In fact,  most parks are on reclaimed sites on the fringes of towns, according to  Patrick Deigman, chief executive of Arlington, the country's largest park developer. And ironically,  parks could flourish rather than wilt under tighter planning restrictions.

  Those already up and running will become even more attractive as parking restrictions bite new sites. Many have anticipated traffic controls, anyway, by building in public transport links.  Arlington has plans for monorail connections in Manchester, Birmingham and Bristol. Other developers' giant  projects such as Blythe Valley in Solihull and the Thames Valley's Green Park have been integrated into new access roads and bus routes.

  Many insiders believe such parks could be central to ideas for 'transport development nodes' now floating around Whitehall. But not every park will meet the tough new criteria. Most sprang out of an era when motorway access was the prime consideration to attract top tenants. And there are more still in the pipeline. Grimley International calculates a potential for almost tripling the current stock to 130m sq ft - more than 10% of all UK offices.

  This massive buffer of development which already has planning permission appears a major stumbling block to restricting countryside development. But  many will never come out of  the ground, according to  Alistair Eliot of property consultant Knight Frank. 'They will need renewed or more detailed planning permission, and that will not happen in many cases,' he says.

  'Potential tenants will also be looking for public transport links because they, too, anticipate a crackdown on cars in future.'

  One solution may be a return to  urban areas. 'There is bound to be a trend back into towns over the next 10 years by both people and business,' says Trevor Silver, a director of Akeler Developments. He  is working on  plans  to regenerate the nine-acre Daily Record site in central Glasgow into a 400,000 sq ft business park.

  This will be nowhere near the scale of Akeler's pioneering Doxford Park in Sunderland but will share the same kind of flexible buildings in pleasant surroundings. The main difference is the denser urban dimension, with buildings at 45,000 sq ft per acre rather than 18,000 sq ft.

  Urban parks are few and far between, however, and reversing the flow out of town will not be easy.  Arlington is a market leader with schemes in towns like Coventry, Oxford and Gloucester but these are redundant car and aircraft sites passed on by parent company British Aerospace. Assembling similar chunks of land under multiple ownership would be difficult.

 One possibility in London is the 33-acre Chiswick Park, where work on spectacular plans for 1.5m sq ft of high-class offices ground to a halt in the recession. This is one of the last development assets of Kvaerner, which  is selling its property portfolio and Chris Hiatt of joint agent Jones Lang Wootton has had several inquiries in the last few months.

  More conventional  fringe urban sites are thin on the ground, however. Ironically, this is  because tougher planning controls on out-of-town sites  are pushing up prices to levels affordable only to housebuilders. Higher parking fees in towns are another backlash which will drive businesses out rather than bring them back, says Grimley.

 Local politics are running counter to government aims in other ways. Silver admits to frustration finding sites, particularly  London. 'When we try this in the regions, local authorities welcome the new jobs. In the South-east they seem to find barriers,' he says.

  Councils will need to  improve town centres and public transport before  if they want to hold onto businesses, says Angus McIntosh, research director for consultant Richard Ellis. He points out that staff  are the prime consideration  to employers and the best people will not work in tired and rundown cities.

  Rather than move into town, investors may recycle  buildings put up in the early surge of development. The Dow Chemicals buildings at Stockley, near Heathrow, were being held up until recently as the epitome of modern business space on the UK's leading business park.  Yet  Standard Life has paid 25m for the now-vacant 70,000 sq ft to renovate them.

  If business parks can adapt this quickly - and change their focus  to meet new transport demands - they will continue to thrive. Town centres will have to match this flexibility to compete rather than rely on increasingly tough planning controls.