The Subplot | Hull sets sail, open storage, airport project grounded

Welcome to The Subplot, your regular slice of commentary on the business and property market from across the North of England and North Wales.

THIS WEEK

• Hull chases the tide: the Humber city’s property market is stirring, but to grab opportunities the city council may need a new plan, fast.
• Elevator pitch: your weekly rundown of what is going up, and what is heading the other way

Hull chases the tide

There are ripples in Hull. But an old plan, and new party political control, means a bigger-scale rethink is due. Can the city council get it done in time to grab the opportunities?

Another week, another upbeat announcement about regeneration in Hull. This time it’s East Bank Urban Village, where Hull City Council is looking for a development partner for 850 homes and some mixed-use next to the river and the Old Town. A wodge of £10m Levelling Up partnership funding will help get things moving. East Bank follows last week’s good news on the potential for a med-tech park, when Subplot (30 November) reported that the proposal was given the very slightest of nudges forward by the Hull and East Yorkshire devolution deal.

Watch this space

The med-tech idea is focused on the Western Docklands, an area ripe for attention. The site – bounded by Castle Street to the North, the Humber Estuary to the south, Daltry Street to the west and Commercial Road/Manor House Street to the east – includes the Smith & Nephew site and a new cruise facility at Albert Wright Dock, perhaps also a relocated ice arena, and a new use for the retail park. Its development represents a great opportunity to join up the city centre, marina and Fruit Market (see below). The city council has just approved a design brief.

And these spaces

The Western Docklands plan emerges as the office market stirs. At the old Fruit Market, Wykeland has completed the final 11,000 sq ft of workspace at the 85,000 sq ft Centre for Digital Innovation, a slow-burn since 2015 but a winner nonetheless. Elsewhere modest but significant work is underway: like-for-like Qube Property’s restoration of 61 Market Place and Venture Business Space’s 45,000 sq ft of refurbished office space at the junction of Anlaby Road and Ferensway. Work is underway on the Venture project, with the hope that occupiers will be at their desks in 2025.

Telescopes required

This is all good. But step back and the big picture gets fuzzy. The existing Hull Local Plan dates from 2017 and is long overdue for a five-year review. As long ago as 2021 the council approved a v, which should have seen a new plan examined in public, approved by the secretary of state and adopted by last month. This didn’t happen. It’s unfair, but telling, that if you click the “city plan” tab on the council’s news release website, there’s a yawning gap between 2021 and last week’s East Bank initiative. Thinking seems to have stopped. So what’s going on? On the face of it the city council has until June 2025 to get a new plan in place, so the clock is ticking.

Be patient

As it happens, Subplot isn’t the only person asking questions. A gentleman called Andrew Norton submitted a Freedom of Information request on 29 November – hello Andrew, if you’re a reader – and replies are awaited. You can check to see what Andrew discovers on the FOI website.

When Subplot approached the council the answer was that a review is “currently being looked at” with the idea of councillors approving a new timetable in February or March 2024. Even allowing for a super-quick 30-month turnaround, this could be tight. The council has until December 2026 if they decide to go down the new-style plan-making route, which makes life a bit less pressured but not a lot.

Bedtime reading

In the meantime, there is work going on next door at East Riding of Yorkshire Council, with whom Hull inevitably shares a future and, usefully, some planning thoughts. The East Riding rethink was going well, but got becalmed in 2023. A longer-range document, in the former of a non-statutory spatial framework for York, North Yorkshire, East Riding, and Hull is intended to run from 2035 to 2050. It is big-picture stuff and will certainly put you to sleep.

We are the masters now

Behind all this is, of course, politics. Hull is one of the Northern cities with a long history of Labour/Lib Dem competition. The Lib Dems replaced Labour as the controlling party in May 2022 and increased their majority in 2023. Not unnaturally, the new masters want a rethink. But they can’t afford to wait much longer.

ELEVATOR PITCH

Going up or going down? This week’s movers

An excellent week to get into rented shipping containers, definitely one for the penthouse. But down in the airport loading bay all is not so well. Doors closing, going down.

Airport City

Last week Manchester City Council launched a rethought (and much praised) new economic strategy. Literally top of the strategy’s list of schemes that will change the fortunes of 600,000 citizens, and millions more in the hinterland, was the £1bn development at Airport City. Was this wise?

Subplot has taken a keen interest in this well-located transformational 5m sq ft project of major regional significance. Advanced manufacturing has been a slow burn – you’ve all got Google, you can do the legwork yourself. The office scene has also been a bit thin. Online beauty and wellness giant THG announced plans for a 1m sq ft HQ campus in 2018. As Subplot reported in late 2022, if that parrot isn’t dead it’s very, very sleepy.

A year further on, Subplot asked both potential tenant and Columbia Threadneedle, the potential landlord, for an update. No response had appeared by the time this newsletter went to pixel. Columbia Threadneedle paid about £400m for its controlling interest in 2020 and, as for its future plans, it’s been stony silence ever since, except for some fairly modest warehousing (another got the go-ahead earlier this week). One day soon the city council will have to get a grip of this fantastic opportunity, or confess it wasn’t fantastic after all.

Open storage

OakNorth, which describes itself as a neobank for entrepreneurs, has agreed a £29m debt finance package to grow an open storage portfolio in the North and Midlands. ALMCOR and an affiliate of Cerberus Capital Management have bought a 50-acre site at Leyland, Lancashire as part of a big push into the Euro open storage sector.

We’re going to be hearing a lot more about the open storage sector which ranges from shipping containers for private hire, to places to leave bulky stuff, particularly cars. The sector has been growing in significance since 2021. Now a rash of research reports – a big shout out to Carter Jonas, Cushman & Wakefield, and Savills – demonstrate as clearly as a fist full of fivers that investors new to the niche are on manoeuvres.

Why? Savills points to 47% rental growth in 2023, that’s why. Admittedly it looked at one slice of a diverse sector, but you get the idea. Cushwake, looking mostly at the shipping containers end of the scene, reckons it attracted just under £1bn investment in 2022 and is growing at the rate of about 2m sq ft a year (to about 55m sq ft). Carter Jonas points out that the supply of sites is strictly limited. A sector to watch for sure.