Event Summary
West Cheshire Development Breakfast
21 May 2015 10:06
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Around 40 developers, investors and advisors took part in a debate at West Cheshire College in Ellesmere Port organised by Place North West and Cheshire West & Chester Council in association with Aaron & Partners LLP.
The event coincided with the launch of the Cheshire West & Chester Property Review, compiled by BE Group on behalf of the council.
Download executive summary below
Cheshire West and Chester Property Review Executive Summary 2015
Representatives from the following companies and organisations took part in the invitation-only debate:
AARON & PARTNERS LLP | AHERNE PROPERTY CONSULTANTS | AINSCOUGH STRATEGIC LAND | ARUP | BARRATT | BE GROUP | BELL DEVELOPMENTS | BOLESWORTH ESTATE | CASEY GROUP | CHANCERYGATE | CHESTER RENAISSANCE | COLLIERS INTERNATIONAL | CHESHIRE WEST & CHESTER COUNCIL | ELAN HOMES | ELLESMERE PORT DEVELOPMENT BOARD | FOSTER ARCHITECTS | GLENBROOK PROPERTY | KENNEYMOORE | LAMONTS | LEGAT OWEN | MOTT MACDONALD | MUSE DEVELOPMENTS | PAGG PROPERTIES | POCHINS | REDROW HOMES | GROSVENOR ESTATE | LAMBERT SMITH HAMPTON | UNIVERSITY OF CHESTER | WEST CHESHIRE & NORTH WALES CHAMBER OF COMMERCE
Below is a summary of comments made during the debate
See gallery of photos from the event at foot of page
Rural
- Authorities missed a trick in not allowing rural communities to grow housing by 5% to 10%, this would meet demand. 95% of the borough is rural; economic activity doesn’t all happen in Ellesmere Port and Chester
- Mobile and broadband connection is a huge issue in the area and always the subject of occupiers’ first question now. Landowners are having to look at paying for their own supply to plug the gap where the Connecting Cheshire broadband roll-out has not yet reached
- Grosvenor Estate and Bolesworth Estate are promoting new services for villages; commercial and residential development – always a challenge in planning
Chester
- The One City Plan gave clear guidance for development, the City Place office development at the train station is in keeping with the One City Plan, which had cross-party support. Cllr Sam Dixon (Labour) and Cllr Stuart Parker (Conservative) being sat around same table at Chester Renaissance, the public-private stakeholder group, is encouraging
- The long-awaited major retail development, Northgate, is going to be pivotal to Chester – it should restore the city’s attractiveness as a day out – currently Chester is a 2-3 hour visit which is not enough
- Northgate is a 400,000 sq ft retail-led mixed-use development. CWAC appointed Rivington Land last summer, and is working with JLL to see that retail mix and unit sizes are absolutely right. A planning application is expected in January 2016. Approval could come in spring summer 2016, and construction will take four years
- Chester’s problem is not uncommon in retail sector – more shops than retailers looking to get into the city. There are more retailers requiring space in Cheshire Oaks than Chester city centre according to the published lists of requirements
- City’s wider retail surplus has to be fixed before Northgate. Some council officers are not working quick enough and enthusiasm at top of council needs to filter down
- Chester will never compete as a pure retail scheme with Trafford Centre or Liverpool One but can compete on a ‘want to go to’ attraction. Operators need to be persuaded to open doors after 5pm and address public realm
- Failure of ING Real Estate Development [former preferred developer, CWAC ended agreement with in 2012] and CWAC at Northgate has held city back 20 years; five years didn’t come, 10 years recession, five years waiting for the next one
- There remain viable opportunities in leisure market in Chester. The arrival of Carluccios and Yo Sushi recently and Pochin’s building of four pre-let restaurants on Pepper Street at the back of Grosvenor shopping centre shows that what works financially is A3 leisure
Housebuilding
- There are 5,000 residential units consented in Ellesmere Port but housebuilders are not on site
- There is a distinction between consents secured by land promoters [brokers getting consent to sell land to developers] and consents secured by housebuilders
- If housebuilder not building houses it is because they can’t sell them at a profit
- Contruction costs are going up
Industrial
- There is a shortage of quality industrial space in West Cheshire but also wider region. There were only one or two deals of 100,000 sq ft or over in the borough in 2014. If space is not there companies will look to rest of region
- Land values did not decrease in downturn, they remained static but build costs have now increased. Not viable now to bring development through. Occupiers have to accept they need to pay more. Market has to move on
- Market is used to £4.50/sq ft, but it needs to be £5.75/sq ft or £6/sq ft to make development viable. Freehold prices traditionally are £60/sq ft, they need to be £80/sq ft which is a fair old step for the market to get used to for speculative developments to kick on now. But demand is there
- If occupiers won’t pay £80/sq ft freehold, something needs to happen with land values; might need public sector to put land in at little or no cost to developer
- Occupier demand probably isn’t keeping pace with build costs
- Ellesmere Port has seen GM Vauxhall secure production of the new Astra, creating 650 jobs; Chester University acquired the former Shell research campus, renamed Thornton Science Park; and Peel is about to start on Ince Park and Port Cheshire; there is potential for up to 10,000 new jobs in the town but there is very little commercial space to offer new companies in 5,000 sq ft to 10,000 sq ft range
Offices
- Agents reporting lack of space
- Units at recently completed Portal Business Park in Tarporley sold well but at average £63.50/sq ft freehold, when cost more than £80/sq ft to build
- Two sites on Chester Business Park but development still doesn’t stack up
- Trend to convert period townhouses which have been offices back into residential is going see businesses moving out of Chester city centre. This risks the leisure and retail marks not being augmented by business community
- Difficult to get quality of office building at City Place [next to train station] in the city centre although there are quite a few 1960s office buildings which could be redeveloped, and could be used to attract graduates and spin-out businesses
Strategy
- What is being done to create demand from businesses to move into the area?
- Is there clarity around whose job it is to bring jobs into West Cheshire?
- Don’t see a detailed plan for delivering on priorities such as growing the science sector
- Challenge for parts of region to grasp devolution agenda outside Manchester
- Authorities face further austerity which will put pressure on resources
- University of Chester receives eight applications for each place, but has had to provide rented accommodation itself because of market failure
- HS2 Crewe hub and station will open up opportunities, as will electrification of branch lines around Crewe. Most important opportunity is on supply side. Need to talk about skills deficit – there are not enough engineers to build the railway at the moment and HS2 Ltd hopes Cheshire will help fill that skills gap.
- £40m Chester Zoo Islands development due to go live in summer and instead of Cheshire Oaks, zoo, Chester city centre competing there should be more working together
- Market towns of mid-Cheshire need cross-boundary collaboration between unitary authorities in East and West and it is not there at the moment. The problem with secondary retail sector needs to be addressed. Isn’t demand for shops. Lot of shuttered shops where shutters never go up
