Planning Review - All Change?

In March this year we posted on the new National Planning Policy Framework and the likely impact it would have on the process for new development in the UK.

The Department for Communities and Local Government issued their Impact Assessment yesterday, which at 79 pages is longer by a margin than the Framework document itself.  Amongst much else, the Impact Assessment contains some fascinating insight into the projected costs of the consolidation of the planning processes proposed in the NPPF and by whom these are to be borne!  Read the full document here:

http://www.communities.gov.uk/documents/planningandbuilding/pdf/2172846.pdf

Three months on and the jury is still out.  Lining up in one corner of the green field is the “pro development” lobby and, currently, they would appear to be reassured by the legislation, in that there is a presumption in favour of sustainable development.  In essence, if a proposed development is well located, with good public transport links and connection to the town center, is of a high quality design and the construction materials can be proven to be sustainable then all should bode well.

In the opposite corner are those who, let’s not say they are “anti development” but are most concerned for the future of our green and pleasant land and they too are feeling encouraged.  Leading the charge are Friends of the Earth and the National Trust who, with many others have heard the Government state that the green belt is sacrosanct and that the natural heritage of the nation needs to be defended for future generations.

So, peace and love abounds with both sides feeling satisfied that their concerns have been listened to and addressed, at least in part.  However, as the expression goes, “something’s got to give”.

I think we can look forward to the detail of applications that come under opposition fire being thrashed out in the courts of the land, over many hours and at much cost.  The much heralded, new and slimmed down, planning framework may be about to get a lot fatter as each challenge is mounted. 

Anyone for a Judicial Review?

Cambridge BioPharm all over again

Earlier in the year we reported on the acquisition of Granta Park in Cambridge by BioMed Realty Trust.  The specialist REIT (www.biomedrealty.com) own or have interests in assets in excess of 12.5 million ft² ($4bn +) almost entirely in the USA, specifically in bio hubs in Boston, San Diego, San Francisco, Seattle, Maryland, Pennsylvania, and New York/New Jersey.  BioMed has an exacting specification for portfolio acquisitions and it is interesting to note that Granta Park represents one of what is believed to be a very small number of offshore assets.

More news from Cambridge’s BioPharm community this week, breaking from the good people at Estates Gazette (www.egi.co.uk), regarding the continuing progress of Cambridge's BioMed Campus, the healthcare village that now has outline planning consent for 70 acres.  Project Director, Jeanette Walker, is seeking an opportunity to put the first spade in the ground by securing a prelet for 35-40,000 ft² of commercial space.  This would allow for construction of up to 100,000 ft² which, Interestingly, is not being seen as solely for BioMed / Pharma type businesses.  Great store is placed on the opportunity that this development could offer for skills transfer and working across different sectors.  There are currently commitments for occupation from Papworth Hospital, University of Cambridge, the School  of Clinical Medicine, the Medical Research Council, Addenbrookes Hospital and Rosie Hospital.

London Development in Focus

We know that the London commercial development market is struggling in the current economic climate.  The perception of scarcity in significant development opportunity, particularly for office & mixed use, has skewed the marketplace.  Difficult for most, but for those funds that are holding big cash reserves opportunity knocks.

Sovereign wealth funds, private equity firms and UK REITs are lining up to pick off those opportunities that come along, in readiness for a hoped for upturn in demand once completed.  The opportunities to acquire significant development sites are, however, scarce. Battersea Power Station was hanging around derelict and in abeyance for years, before becoming the subject of a tussle between half a dozen companies, all after the rights to spend billions redeveloping the landmark site.  The Malaysian consortium led by SP Setia & Sime Darby will commence the £8 billion scheme next year.

The Qatari state has invested over £20 billion in London in recent years, confirming the confidence they have professed in the London market.  Of note is Qatar’s 95% ownership of the Shard, London’s newest, tallest and brightest tower.  Amongst future schemes Qatar will participate in the redevelopment of  most of the Royal Dutch Shell Plc complex near Waterloo station in a venture with Canary Wharf Group.  The Qatari Prime Minister Sheikh Hamad Bin Jasim Bin Jabr al-Thani has said that “There are a lot of things in the pipeline”

Further developments will come on stream over time, including Brookfield’s purchase of Hammerson’s London buildings and 100 Bishopsgate, an office tower planned near Liverpool Street station which it owns half of and the develop an office building on London Wall Place.

The development game in London is limited to those with large equity reserves, sovereign wealth positions or very strong balance sheets who can take on corporate debt.

Watch this space…..

Gulf expansion into overdrive

Not a usual topic for a posting today, but the numbers involved are quite impressive and reflect another side to the current world economic concerns.  With news today of a very slight improvement in the UK construction industry, after two quarters of decline interesting news and figures emerge from the Gulf with MoveHut (www.movehut.co.uk) reporting on the prospects for the construction industry in the UAE.

Led by the hotel and commercial sectors, the value of projects completing this year is expected to increase over 70% to £51.3 billion.  The Gulf Cooperation Council, the political and economic union of states surrounding the Persian Gulf and Arabian peninsular, awarded construction contacts worth over £37 billion in 2011 across the commercial, retail, hospitality, and residential sectors which, with the 2012 contracts, will see building activity progress into 2013.

A significant aspect of these figures is down to the increased demand for hotel space in the GCC.  Room revenues are predicted to reach $22 billion (£14 billion) this year and are predicted to reach $27 billion (£17 billion) by 2015, according to Global Retail Development Index.  This increase in demand is due to the positive growth estimates for the GCC, based on the region’s strong economic growth and political stability. Forecasts for GCC’s economic growth have projected to 4.3%, up from 3.4%.

In comparison, the value of the Uk’s construction, across all sectors, including housebuilding (apparently there are some) is £90 billion, but the important difference is the our industry is at best flatlining, at worst continuing to decline.

Olympic Real Estate Legacy

As the Olympic games's get underway and Team GB celebrates girl power with our first two medals, (well done to Lizzy and Rebecca) take 5 minutes out from your watching schedule(has anyone got any useful tips on avoiding the wall to wall coverage and actually getting some work done?!?!) and take a look at this reflective piece from http://realestate.msn.com/article.aspx?cp-documentid=23530429 looking back at the real estate legacy projects of past winter and summer Olympic’s.

The commentary on the successful and not so successful project makes for interesting reading.  The challenge for the London commercial and domestic market place post the greatest games ever held comes into the spotlight.

www.jaltd.co.uk

Planning to Fail - Failing to Plan?:

In March this year we posted on the new National Planning Policy Framework and the likely impact it would have on the process for new development in the UK.

The Department for Communities and Local Government issued their Impact Assessment yesterday, which at 79 pages is longer by a margin than the Framework document itself.  Amongst much else, the Impact Assessment contains some fascinating insight into the projected costs of the consolidation of the planning processes proposed in the NPPF and by whom these are to be borne!  Read the full document here:

http://www.communities.gov.uk/documents/planningandbuilding/pdf/2172846.pdf

Three months on and the jury is still out.  Lining up in one corner of the green field is the “pro development” lobby and, currently, they would appear to be reassured by the legislation, in that there is a presumption in favour of sustainable development.  In essence, if a proposed development is well located, with good public transport links and connection to the town center, is of a high quality design and the construction materials can be proven to be sustainable then all should bode well.

In the opposite corner are those who, let’s not say they are “anti development” but are most concerned for the future of our green and pleasant land and they too are feeling encouraged.  Leading the charge are Friends of the Earth and the National Trust who, with many others have heard the Government state that the green belt is sacrosanct and that the natural heritage of the nation needs to be defended for future generations.

So, peace and love abounds with both sides feeling satisfied that their concerns have been listened to and addressed, at least in part.  However, as the expression goes, “something’s got to give”.

I think we can look forward to the detail of applications that come under opposition fire being thrashed out in the courts of the land, over many hours and at much cost.  The much heralded, new and slimmed down, planning framework may be about to get a lot fatter as each challenge is mounted. 

Anyone for a Judicial Review?

Thames Valley Acquisition completes

Further to the January blog “Reading Acquisition Update” it was confirmed last week that PRUPIM has completed the £22.6 million deal for Energis House, which totals 108,000 ft², together with a neighbouring development plot.  Energis House is the controversial, loved and hated in equal measure, ex Metal Box building, an octagonal throwback to the heady days of the 1960’s with fine views over Reading Gaol.  For over 10 years there has been speculation as to the future of this site, with interest being shown from a number of parties over time.

With Cable & Wireless in occupation until July 2015 and planning permission in place for development of 370,000 ft² of office space, attention (and speculation) will now turn to the timing on future development usage for the site.  Next door, One Reading Central is complete, and Two & Three Reading Central are now in the pipeline, so the potential for the site is significant.  The opportunity for the creation of a centrally located business hub is significant and further developments will be keenly watched.

New Development agreed in City

A 500,000ft2 office development in the City has taken a significant step closer to reality with the granting of consent to the scheme by the City of London Planning and Transport Committee.  Hammerson’s 121 & 123 London Wall Place development will require the demolition of St Alphage House and will be built out in two towers, rising to 16 stories and will incorporate landscaped roof gardens, as well as extensive open spaces around London Wall and St Alphage's Church Tower , which remains.

Further bridges will be added to the Barbican’s famous highwalk system, which is retained, allowing easy access to all parts of the City

The scheme will prove a tricky project to undertake as the site is relatively constricted and is situated in the heart of the Barbican, which is well populated with local residents, many of whom are high profile.

It is expected the site will be built for completion in 2014 with full occupation to be achieved in 2015.

http://www.hammerson.com/