The Subplot | Oldham’s moment, Liverpool land prices, angry locals

Welcome to The Subplot, your regular slice of commentary on the North West business and property market from Place North West’s analysis editor, David Thame.

THIS WEEK

• Oldham turns athletic: why the town is suddenly showing large-scale regeneration doesn’t just happen in cities
• Elevator pitch: your weekly run-down of who and what is going up, and who is heading the other way

IS THIS OLDHAM’S MOMENT?

Why it’s suddenly all happening

The first speculative office scheme since 2008 in North Manchester, plus the Spindles redevelopment back on. Is this the turning point for Oldham?

Speculative out-of-town office development has been as rare as hen’s teeth for the last decade and a half. Yet Oldham is about to see one of the region’s first since before the Great Financial Crash. Local business (and landowner in Hollinwood) Manchester Cabins is behind the potentially 80,000 sq ft The Mills scheme. Triton Construction is now at work on the £3.5m contract for the 20,000 sq ft first phase.

Local hero

This has been a long play for landlord and developer The Mills Hollinwood Ltd , as director Su Schofield explains. The 10-acre former Ferranti site has been in its ownership for 20 years. Planning consent for office development on 4.5 acres was agreed, ominously, in the week before the 2020 lockdown. It would have been easy (and money spinning) to opt for urban logistics, but Schofield says that was never the plan. “This site has transport links that couldn’t be better, with the tram, the M60, the main road to Manchester. We felt industrial wouldn’t be using the site to its best. So urban logistics didn’t appeal at all, and anyway Langtree are doing that kind of thing over the road.”

The neighbours

Langtree is indeed doing that kind of thing. The £2m infrastructure package at Hollinwood Junction completed before Christmas, and the £35m scheme is now powering ahead after a slow start given that Langtree was chosen as developer in 2007. The scheme is a partnership with Oldham Council, of whom more in a moment.

Bravery or…

Office development is brave says The Mill’s agent Paul Nolan, director at Nolan Redshaw. “There’s been office development at Broadway, but The Mills is brave, I accept that. The expectation is that local occupiers, within about five miles radius, in substandard offices will want to upgrade. This will answer the flight to quality.” Quoting rents will be around £20/sq ft – also a novelty for Oldham – and some chunky public sector occupiers have already been sniffing out the prospects.

…historic land values?

Historic land values are what make this project viable: if you bought 10 acres of Hollinwood today you couldn’t afford to take a risk on speculative offices priced at rents locals might pay. Current (inflationary) construction costs would have kyboshed the whole thing. As it happens Schofield is local with a history in businesses like Manchester Cabins, and she’s a long-term player, so it’s all fine. Hopes are high.

Carpe diem

Although a post-pandemic inflation crisis in the midst of a major European war may not seem like good timing, in the micro-climate of Oldham’s political economy it couldn’t be better. Glaciers have moved more quickly than the Spindles redevelopment, but suddenly the pace is growing. Having bought the shopping centre for a song (Subplot, 23 February 2021) the council is now seeking a partner for a £285m town centre redevelopment with the Spindles at its heart. Interested parties have two weeks left to raise their hands.

Spindles twinkles

The Spindles itself will see 75,000 sq ft of new office floor space among much else. Wilmott Dixon has already been appointed contractor, and work is expect to race towards a late 2023 completion.

People matter

The big town centre schemes (and many others, like the housing strategy and mills strategy) have been knocking around for ages. Actually making things happen appeared to be a low priority. But the mood changed. Officials like Roger Frith, head of strategic regeneration at the council since 2014, played a part getting proposals to a position where action was feasible. Frith is now leaving for Bury. But credit should go to council leaders: Sean Fielding, then Arooj Shah. They deserve praise for deciding the time had come to get serious.

If it pays off, Oldham could become the new regeneration beacon showing how towns can benefit in the way only cities have experienced so far.

ELEVATOR PITCH

Going up, or going down? This week’s movers

The doors slide shut, you press the button, suddenly your stomach sinks through the floor: this is a normal day in North West planning. Heading the other way are Liverpool land prices.

Pointless planning disputes

Here we go, again. Just a few months after the conclusion of a lengthy planning dispute about big sheds in the North West, another one begins. Glenbrook wanted to build 625,000 sq ft on a 40-acre site at Ashton-in-Makerfield. Locals didn’t like it, and loss of green belt was cited (as it was in the earlier multi-site appeals for around 4m sq ft of development). Planning officials recommended approval, because the site is predominantly on land allocated for employed use, but councillors said no.

The inevitable next step is that Glenbrook wins on appeal, but having lost time and momentum and up to 1,200 jobs that might have been created will have to wait.
The difficulty here is that local people do not engage in the byzantine process of area strategic planning, the process that first allocated this site to employment use.

The lack of engagement is not civic failure by locals, but a huge own goal by the councils, because to work the system you need to hire a planning consultant, and local people can’t afford such luxuries (nor should they have to). Until you get real citizen buy-in to local planning policy-making, particularly some sensible people to run the public consultations who are not geek-fest insiders, this kind of expensive, upsetting conflict will keep on happening.

Liverpool land prices

There is no sign of slackening in Liverpool’s city residential scene. Latest data from City Residential suggests 13% price growth in the L1 district over the last year, and a city centre average of 9%. A slender development pipeline (350ish) will keep the heat up on prices for sometime to come. So, perhaps, will the new Liverpool Local Plan which governs development up to 2033. Co-living has been given a big thumbs down (see Subplot, 13 January 2022) but the more significant blow might be a (justified) insistence on higher quality development and new minimum space standards. The council also want to see a more balanced mix of one-bed and two-bed apartments.

City Residential speculate that this will make some sites unviable, and that land values will have to adjust (downwards) accordingly. It is rare to see the property industry celebrate a drop in land values, but the consensus is that some buyers have undoubtedly paid too much on some doubtful assumptions about values and viability. Their day of reckoning is coming, and that’s not a bad thing.

Get in touch with David Thame: david.thame@placenorthwest.co.uk | 01544 262127

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