HS2, the future of the Northern Powerhouse, Hinkley Point – the next 12 months promise plenty of activity. Lisa Pilkington, Louisa Clarence-Smith and Shekha Vyas take a look ahead to an exciting 2017
Midlands
Birmingham will continue to see tangible evidence of a new wave of development activity as major schemes including Paradise and Arena Central emerge from the ground. Two key office schemes complete this year – IM Properties’ £30m redevelopment/refurbishment of the 160,000 sq ft 55 Colmore Row and Bruntwood’s 110,000 sq ft Cornerblock at 2 Cornwall Street.
The market awaits an announcement regarding the preferred location for the Government Property Unit’s Midlands hub – one of 13 proposed national hubs. Arena Central is tipped as favourite.
Elsewhere, the city council is due to make announcements about the delivery adviser for its Smithfield regeneration project at MIPIM in March. An announcement regarding a development partner is also likely by Q2. Smithfield is the largest city centre opportunity of its kind outside London.
The Midlands-wide game changer that is HS2 is due to win Royal Assent early this year, while the doors will open for the first time at the National College for High Speed Rail dual sites in Birmingham and Doncaster. As housing supply tightens, further green belt “grab” is likely in the West Midlands, especially in places such as Solihull. The redevelopment of Birmingham airport’s terminus looks increasingly likely.
Scotland & Northern Ireland
Uncertainty over a second independence referendum coupled with Brexit has given some investors pause for thought north of the border, but the City Deals slated for Edinburgh, Glasgow and Aberdeen will be crucial in unlocking areas for growth.
GPU requirements in Edinburgh and Glasgow will boost office take-up in those cities in 2017, but a shortage in office space in both locations will create more upward pressure on rents. Work now going ahead on the major redevelopment of Edinburgh’s St James Centre could spur retail activity in predominantly prime locations, while secondary areas may face challenges.
In Northern Ireland, development is needed to inject much-needed office stock to attract occupiers. The completion and letting of Belfast Harbour’s City Quay development and decisions regarding the GPU requirement, while a vote of confidence in the market, do little to alleviate supply shortages. However, the start of McAleer and Rushe’s Bedford Square scheme and Kilmona’s East Bridge site are also expected, which will add to the development pipeline.
Ongoing work by Belfast Harbour and in Titanic Quarter should open doors for new retail and leisure occupiers and further university expansion is expected to drive the student housing sector.
Wales & South
Regeneration and infrastructure improvements in Wales will be key for the property industry next year. With electrification of the South Wales Metro set for 2018 and the redevelopment of Cardiff rail and bus stations, savvy investors will seek opportunities close to key transport hubs.
In Cardiff, Rightacres and JR Smart are on site at Central Square and Capital Quarter and Rightacres is drawing up plans for the 3m sq ft mixed-use Central Quay waterfront project.
Work starting on Hinkley Point Power Station will pave the way for further commercial and industrial development in the South West, but is also likely to take up much of the region’s labour force. The Greater Exeter Strategic Plan will be crucial to shaping growth in the area.
The rating revaluation coming through in 2017 will encourage occupiers to move out of London into key schemes in the South East, while government pledges to invest £2bn annually into R&D will particularly propel the life science sector.
North
Will prime minister Theresa May deliver on her pledge to continue the Northern Powerhouse agenda promoted by former chancellor George Osborne? For the industry, the details of devolution, transport infrastructure investment and the government’s new industrial strategy will be a crucial steer in investment decision-making.
One positive step should be the shift in political power next May when metro mayors are elected. Decisions from the Government Property Unit on where it will sign for its circa 3m sq ft total North of England civil service hub requirements (Liverpool is guaranteed to get a hub) should get the office market off to a strong start.
Public-private partnerships could also lead to some of the biggest investment deals of early 2017. Key opportunities include the procurement of a development partner for the £200m Pall Mall Exchange in Liverpool and an investment partner for the delivery of up to 8,000 homes in the Northern Gateway, Manchester. 2017 is expected to be a bumper year for occupational take-up and returning overseas investment.
Metro mayors
Prepare for plenty of grandstanding across major UK cities in the spring, ahead of the elections of metro mayors in May. From Andy Street in the West Midlands, to Andy Burnham in Greater Manchester, mayoral candidates for the Liverpool City Region, Sheffield City Region, Tees Valley and the West of England will battle it out to take local control of wide-ranging devolved powers. The winners will have control of strategic planning frameworks and housing and investment funds which will shape the future five years of development. Spare a thought for the areas without devolved combined authorities though – will they be left behind?
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