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Read about the latest news, views and developments in the commercial property world from our industry expert.

A resilient CITY
GROWING gains
HK FUNDS MASSIVE SCHEME
Birchwood Park SHINES
Hilton IN STOKE
PROPERTY profile
InBrief #1
PRINCES DOCK focus
MORE shops
Corridor OF POWER
dunedin Soap Works

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North West Commercial Property News - Friday, June 23, 2017

Issue #80

A resilient CITY

North West News

Resilience and adaptability have to be the key characteristics of any city with ambitions for wealth and economic growth - which surely applies to Greater Manchester as demonstrated by the Cities defiant reaction to the recent terrorist attack.

Here is a city that built a ship canal to be independent of Liverpool merchants and became the largest cotton goods producer in the world and now is a legal and financial centre.

Now it is encompassing high tech and the creative industries. In a report from CBRE, Manchester was considered the best-positioned regional creative location. The Creative Region report used criteria such as the population of creative businesses and professionals, numbers of graduates and millennials, transport links, quality of life, salaries and office space.

Tim Newns of MIDAS, the inward investment agency, commented: “One of our unique selling points is the way our businesses co-operate across sectors and universities to drive the next wave of innovation across industry.” Perhaps this should not be surprising in a city that pioneered the computer as well as so many technical changes in the cotton industry.

It is worth noting that Manchester University has more Nobel prize winners on its staff than any other UK university and their achievements range from Graphene to medical advances.

Putting the Northern Powerhouse in perspective, where the government is investing substantial cash, Manchester Council Chief Executive, Howard Bernstein, said: “We’ve pursued our own industrial strategy in Manchester for the past 20 years."

That has underpinned the success of the commercial property market which, according to Cushman & Wakefield (C & W), is set to outperform London and the rest of the UK this year.

“Manchester’s university educated workforce, its technology sector and its transport connections all combine to mean that the city and region are well placed economically, despite a potential slowing of growth due to current uncertainties,” said Mark Unsworth of C&W.

Lambert Smith Hampton (LSH) endorses that optimistic view even though investment in the first three months of the year was down 60 % in the North West at £438 million. Ben Roberts of LSH said: “Those opportunities that have been on the market have received strong interest which has started to encourage vendors to push on with sales. As a result, we expect a strong investor appetite over the next quarter with an increase in ‘off market’ deals as investors seek to invest.”

GROWING gains

North West News

Chris Mulcahy of JLL commented that general office activity levels were favourable with a good pipeline of enquiries – Q1 takeup was over 200,000 sq ft higher than last years figures.

Manchester is still attracting inward investors; the latest example being the Swiss Distribution firm Distrelec taking Grade A space in St Peter’s Square. There are also some very interesting consolidation requirements and major inward investor enquiries coming forward.

On the supply side there are numerous refurbishments completing this year and next and some Grade A schemes completing and starting this year to provide occupiers with a good level of choice, which is all important to enable the demand to be satisfied against a background where the other big 6 regional cities are not seeing any new development.

HK FUNDS MASSIVE SCHEME

North West News

The scope of Manchester’s performance is underlined by the plan for £2 billion regeneration scheme for the Northern Quarter which is expected to be undertaken by the Hong Kong Far East Consortium (FEC).

It envisages a 10,000 homes project on a 300 acre site extending around Victoria station together with commercial space. It is adjacent to the massive NOMA office scheme and is FEC’s second major project in Manchester.

The point here is that Manchester is getting an increasing flow of foreign investment, notably the Chinese at the airport. That only comes with international status.

Birchwood Park SHINES

North West News

Led by Birchwood Park, Warrington is also performing well with progress in growth and investor confidence.

Martin O’Rourke of Birchwood Park pointed to the high profile lettings to Muller, Canon, FOSS and Ricoh in 2017. He said that the Enterprise Zone status has proven a draw for new occupiers.

He suggests that the zone status is a major reason why the Bathgate Group has taken a 1,298 sq metres (13,971 sq ft) warehouse in Cavendish Avenue.

O’Rourke said: “The Cheshire Science Corridor Enterprise Zone is expected to attract up to 20,000 jobs, 500 businesses and about £100 million in additional investment”.

It is a broadly based performance because there has also been an expansion of start-ups and SMEs at Birchwood Park.

An example of small companies arriving is WRK Training, a start-up business founded last year which is leasing space in Newton House through Patrizia, manager of Birchwood Park.

O’Rourke said: “It is always encouraging when current occupiers choose to relocate within the park rather than move elsewhere. With the highest number of start-ups in the North West in Warrington, we’ve worked hard to ensure we’re offering a nurturing environment for young businesses."

Ricoh has relocated from Manor Park, Runcorn and its CEO, Phil Keoghan, said: “Birchwood Park underlines Ricoh UK’s success in embracing digital transformation and helping our customers to do the same. The new office showcases how we have used technology to pioneer the workforce of the future.”

Hilton IN STOKE

North West News

The regeneration of Stoke-on-Trent, which has already brought a vibrant cultural quarter, is taking a further step forward with the plan for a Hilton Garden inn in the Smithfield area of Hanley through a deal with the developer Genr8.

It will have 140 bedrooms, meeting rooms and conference facilities and comes ahead of Stoke bidding to be the City of Culture in 2021.

City Council Leader Dave Conway said: “It will only improve the hotel offer in the city which is vital if we are to be successful with our UK City of Culture bid but will also help grow our tourism industry and further revamp the area with increased footfall."

The hotel will be owned and developed by Genr8, working alongside the city council with a planned start this year. Richard Ingham of Genr8 said: “This is a huge step forward for the city and the Smithfield development and will provide a significant boost to the local businesses and leisure industry.”

PROPERTY profile

North West News

713 Cavendish Avenue Name of Property/Address: 713 Cavendish Avenue, Birchwood Park, Warrington Location: Set within the Enterprise Zone at Birchwood Park; Warrington’s most successful location for business.

Access: Less than 2 miles from both the M6 and M62, right between Manchester and Liverpool. Both Liverpool and Manchester Airports are in easy reach, less than 20 miles from the Park.

Description: 21, 619 sq ft, high quality, new build, self-contained warehouse unit with a high level of flexible office content (2,400 sq ft), 24-hour on-site security and CCTV.

Benefits from Enterprise Zone status – save up to £275,000 over 5 years.

Specification: Self-contained with a secure yard, eaves height: 7.5m, floor loading: 30 kN/m2, leg loads: 45kN. 40 marked car spaces.

Agents details for more info: Birchwood Park 01925 851 536 B8 Real Estate 01925 320 520 JLL 0161 238 7416

InBrief #1

North West News

Simon Roddam at BE Group said; Office take up in Warrington was up by 20 per cent at the end of last year, and has shown no signs of slowing down in the first half of 2017.

Birchwood in particular is performing well with approximately 65 per cent of transactions contributed from local occupiers expanding or relocating within Birchwood.

That said, we have recently concluded a transaction of 47,000 sq ft with an inward investor which shows that Warrington is very much still the place for occupiers seeking established and well managed business park environments with optimum road connectivity

PRINCES DOCK focus

North West News

Steadily, but surely, the various elements in Peel’s vast Liverpool Waters scheme are coming together.

Peel has now signed with the Regenda Group for a £21 million tower in the heart of the £5.5 billion project to be named Plaza 1821 (the year the Princes Dock was opened) Apart from 105 apartments, there will also be retail units. Neil Baumber of Peel said: “Plaza 1821 is the latest and significant piece of the jigsaw for our vision of Liverpool Waters, as it will bring much needed quality residential units to a vibrant waterfront location."

Also at Princes Dock, insurance broker Griffiths & Armour is taking a 10 year lease on 1,673 sq metres (18,000 sq ft) at No 12. They join KPMG, PwC and Savills at the waterfront location.

Liza Marco of Liverpool Waters said: “There is a real sense of excitement and momentum about Liverpool Waters at the moment, with recent announcements about the Central Docks neighbourhood and the agreement with Everton on the development of a football stadium."

For the wider Liverpool City region, take-up last year was over 46,468 sq metres (500,000 sq ft) for the fifth consecutive year, said the Professional Liverpool Property Group, supported by the Liverpool BID company, with the city centre leading the way with a rise of 13 per cent.

One of the latest lettings is 1,673 sq metres (18,000 sq ft) in Orega’s 20 Chapel Street serviced office scheme to the British Airways Pension Trustees. Zach Douglas of Orega said: “The new centre will be our first in Liverpool, offering fully serviced offices, modern meeting rooms and break-up areas in one the city’s most striking buildings."

Bill Addy of Liverpool BID said: “We do need to address the issues around the shortage of office stock but it is encouraging to see schemes such as Pall Mall coming to fruition as it will provide the Grade A office space that is needed to attract investors to the city."

Meanwhile, the iconic 30,670 sq metres (330,000 sq ft) Royal Liver Building has been sold to the Luxembourg investment manager, Corestate Capital for £48 million, a net initial yield of 6.2 per cent. This is the first time the building has been sold since it was opened in 1911.

MORE shops

North West News

TA useful guide to the buoyancy of Manchester is the success of the Arndale Shopping Centre where its owner M&G Real Estate is heralding a series of lettings to international brands.

It lists new arrivals as Kiko Milano, Lovisa, Nespresso, Five Guys, Baytree Interiors and Predator Nutrition.

Kannika Mall of M&G said: “Arndale continues to attract significant attention from national and international retailers, driving its reputation as a leading global retail hub and we have an annual footfall of 40 million”.

According to Savills, unlike many UK cities, demand for retail space in Manchester is booming with 54 new brands opening in the city since 2012 - a net increase of 9%. A quality retail offer is part of the mix that creates the environment for office development and business expansion.

Student accommodation is another hot market with a recent deal illustrating another point – Its attraction to private investors. One private investor sold a number of buildings with 177 bedrooms close to university campus to another private buyer for £10.8 million. The deal was through LSH and JLL.

Ian Scott of LSH said: “The Manchester market continues to suffer from an under-supply of high quality new accommodation, especially within key university locations outside the city centre.”

Corridor OF POWER

North West News

Given the enthusiasm for technology and science based developments in the UK, the concept of the Cheshire Science Corridor has come at an appropriate moment.

While it can be seen as part of the Northern Powerhouse, it is aimed at the idea of a Golden Triangle, so to speak, from Chester through Manchester to Liverpool.

What gives it teeth is that the corridor has Enterprise Zone status which could secure £200 million in business rates. Perhaps the biggest gainer here is Chester which has a strong science and technology base which can only gain from a close relationship to Manchester and Liverpool with their world-class universities.

Michael O’Connor of law firm Addleshaw Goddard commented: “Without a doubt, the building blocks are in place for the Cheshire Science Corridor to both rival and complement the south’s London-Cambridge-Oxford Golden Triangle.” He noted the importance of Birchwood Park in the corridor.

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