As 2018 gets under way, EG looks at what the year ahead has in store for all sectors of the industry.
Q1
South East: U+I and the University of Brighton’s £300m Preston Barracks (main image) scheme starts construction. It will create 369 homes, 1,338 student bedrooms, a new home for the university’s business school and a 50,000 sq ft hub for start-up businesses.
South West: Bristol City Council cabinet is expected to decide whether to progress with plans to build a Bristol arena near Temple Meads station.
Tim Davies of Colliers International’s Bristol office says: “This project is looking increasingly unlikely because of escalating costs.
“There have been suggestions that if this scheme is abandoned there could be moves to build a new arena at Filton airfield. This would have considerable implications for the hospitality industry in central Bristol.”
Bristol Broadmead: Outline plans for the mixed-use redevelopment of the Broadmead shopping area by Hammerson and AXA Real Estate Investors, which jointly own neighbouring Cabot Circus shopping centre, will go before the planning committee on January 10.
Yorkshire: Expected this year, the determination of major planning applications in Leeds for CEG’s Holbeck portfolio and Vastint’s former Carlsberg Tetley brewery site.
Scotland: TH Real Estate’s 1.7m sq ft Edinburgh St James residential, retail and leisure scheme to start construction. It will be home to the UK’s second W Hotel, up to 150 new homes, 30 restaurants, an aparthotel and an Everyman cinema.
The Scottish Planning Reform Bill will be making its way through the parliamentary process in 2018.
According to Chris Miller of the GVA, this has the potential to introduce a whole host of changes to the planning system such as removal of strategic development plans, greater power for National Planning Framework, third-party right of appeal, longer lifetimes for local development plans and rebranded simplified planning zones.
Q2
South East: Bidwells will announce a development partner for Oxford’s 1m sq ft mixed-use Oxpens scheme on behalf of Oxford City Council and Nuffield College.
Plans could incorporate uses such as residential, offices, hotels, retail, and leisure.
South West: Public consultation starts on detailed plans for Bristol University’s £300m campus near Temple Meads Station.
Wales: Devolution of stamp duty to Wales (to be renamed Land Transactions Tax) with new rates and bands to be introduced.
LTT for non-residential property in Wales will have a higher top rate in Wales compared to England.
Chris Sutton, lead director at JLL, in Cardiff, says: “The Welsh government will be responsible for setting stamp duty tax rates from April 2018.
“The announcement in the UK Budget of zero stamp duty for first-time buyers up to £300,000 took effect across England and Wales in November. The challenge for Welsh government is to make sure their new rates fit into the wider context of the UK.
North West: The updated Greater Manchester Spatial Framework incorporating Andy Burnham’s revised approach to green belt release and town centre development is expected.
Launch of an OJEU notice to find a development partner for Oldham’s town centre regeneration.
The masterplan for the project covers five co-located town centre sites totalling 21 acres and includes a mixture of uses, including new civic facilities.
Yorskshire: Bradford council to bring forward proposals for One City Park, a 90,000 sq ft office development in the city centre.
England: Local elections could see more changes in political colours after the Conservative’ surprise loss of its majority in the General Election last May.
Q3
South East: An outline planning decision is expected for the 415-acre Thames Enterprise Park on the site of the Coryton oil refinery in Essex. Greenergy and iSec plan to develop a 4m sq ft logistics scheme made up of four hubs for food, energy, sustainable industries and innovation.
Further details are expected on the development strategy for the 220-hectare site at RAF Henlow in Bedfordshire. Plans are for a hi-tech science and research park and a £120m deep-sea research facility has already been announced.
Midlands: The new £330m campus for the University of Northampton will welcome its first students.
The campus is part of the Northampton Waterside Enterprise Zone and will see two existing facilities consolidated into the new facilities.
A preferred bidder for the development of Birmingham Smithfield is set to be announced.
It is the largest city centre regeneration site in Europe and is expected to deliver a 3.2m sq ft mixed-use scheme and new homes. The scheme would have an investment value of more than £500m.
Wales: University of Wales Trinity St David’s new £300m campus opens in SA1 Swansea. It forms part of longer-term plans to regenerate the city centre.
Yorkshire: The 250,000 sq ft Scotch Corner Designer Outlet is due to open in autumn.
Q4
Midlands: Developer Harworth will commence work on a 450-acre former site of the Thoresby Colliery, next to Sherwood Forest, where there are plans for 800 homes and 250,000 sq ft of employment space.
South West: Severn Bridge tolls will be scrapped for vehicles travelling into Wales. A rise in demand for logistics space on the Welsh side of the bridge is predicted and Acorn Property Group says it will also give local landowners “a windfall” as demand for new homes rises.
East of England: AstraZeneca’s new 850,000 sq ft global research, development centre and corporate headquarters opens at Cambridge Biomedical Campus and will accommodate around 2,000 staff.
Will Heigham, head of office agency at Bidwells, says: “AstraZeneca choosing Cambridge clearly demonstrates the importance of the Golden Triangle to the life sciences sector and R&D in Europe.
“It is acting as a magnet, and following recent industrial strategy announcements, this magnetic pull will only become stronger.”
National themes for 2018
Industrial
“Industrial warehouses in ports will be the market to watch as Brexit negotiations continue.
“Bonded (or customs) warehouses are used to store dutiable goods from outside the EU with import VAT payments suspended.
“Depending on what customs agreement is negotiated with the EU, demand for bonded warehouses in ports could represent a major opportunity for savvy investors.”
Stephen Inglis, group property director at Regional REIT
Investment
“One main trend will be the move to income. The removal of capital gains tax exemptions for offshore companies in 2019 and the heavy burden of transaction costs means that UK property will increasingly become a longer-term hold rather than a quicker turnaround story.
“There will be an emphasis on income-driven strategies and a fall in the volumes of higher-risk opportunities such as regeneration and development.
“Investment managers will continue to promote property income strategies at the IPO market for lower cost capital from the retail investor.
“This is likely to mean that activity in the regions will be focused on smaller deals with income and the perception of lower risk in 2018.”
Martin Roberts, principal at Addington Capital
Offices
“With only 657,000 sq ft of speculative space under construction across the regional cities set to be delivered in 2018, we expect this to add upward pressure on top rents.
“Competition will further intensify among occupiers in search of grade A space.
“Currently, there remains only 1.6 years of grade A supply across the regional city centres at average levels of grade A take-up.
“Anything below two years, Savills classifies as a shortfall. Savills forecasts a 2.8% average increase in top rents across the regional cities during 2018.”
Mike Barnes, research analyst, Savills
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