It’s two years since the South West’s two enterprise zones were established by the government in Bristol and Newquay. David Thame hears that while EZs have failed to provide financial incentives, they have brought focus and commitment to the two areas
These days the seagulls are having to compete for space in the blue skies over Newquay. The characteristic whine of a De Havilland or the shameless roar of the Hawker Hunter are now part of the seaside mix.
That is because Classic Air Force – a 30-strong “living museum” of aircraft – has moved from Coventry to Newquay, and now occupies what is reputedly the largest building in Cornwall – a 68,500 sq ft hangar at Newquay airport’s Aerohub enterprise zone.
It is one of the most conspicuous signs of success claimed by the Newquay enterprise zone as it approaches its second anniversary (see panel, p84).
The verdict on the South West’s other enterprise zone – Bristol Temple Quarter – is that after much debate and controversy over its location, it too is airborne, just about.
Two substantial developments have got under way since the Bristol enterprise zone was launched in July 2011, atand phase 3 of the .
Cranes are now on site at Two Glass Wharf. Salmon Harvester – a joint venture between Salmon Developments and NFU Mutual – are at work on a 100,000 sq ft scheme, the enterprise zone’s first big trophy, and the first speculative scheme in Bristol since 2009.
Rorie Henderson, director at Salmon Harvester Properties, says: “While the occupier benefits of being in an enterprise zone are not entirely clear, we are speaking to potential tenants for Two Glass Wharf who, given a choice, would rather be in Bristol’s Temple Quarter EZ than outside as they perceive the benefit of any future government policy is likely to be focused within the EZ.”
Salmon Harvester’s faint but real praise matches the mood at Verve. Last month, Verve Properties and Crest Nicholson launched the development of phase three of the Paintworks, at Totterdown on Bristol’s riverside. The partnership plans to develop 221 residential units, 61,700 sq ft of commercial space with separate BBC studios, 5,000 sq ft of retail/leisure space and 11 live/work units. Work on site will begin later this year.
Listening to Verve director Ashley Nicholson describing his feelings about the enterprise zone it sounds like a frustration and a let down – but Nicholson insists he’s still hopeful.
“It helped stimulate us to bring forward development, but we thought it would be a bigger benefit than it turned out to be,” he confesses.
“The EZ had an influence on our development appraisal. Although we wanted to do the development anyway, it gave us more confidence because we thought we’d have benefits we could pass on to occupiers, which would shorten the void periods.
“As it turned out the benefits of EZ status weren’t giving the competitive advantage we’d hoped for, and the appeal of the development has more pulling power than EZ incentives. That said, it can be useful in discussion with occupiers who have already decided they want to come to the Paintworks, when we discuss terms.”
For Verve the problem is the extent of business rates incentive offered to EZ occupiers.
Nicholson explains: “The rates relief incentive doesn’t help those it ought to. It only benefits start-up businesses new to Bristol – and most occupiers are already in Bristol, while start-ups rarely sign traditional leases straight off. I’m pleased the council are now looking at ways to get round this.”
Simon Price, partner at Alder King and an adviser on both the Verve and Salmon Harvester schemes, says the EZ is less important than market dynamics.
“There‘s a buzz about Bristol – more investment interest, more occupier interest, it’s all happening, and I’m not sure the EZ has affected that one way or the other. It has given some key sites – just some – an extra focus and marketing edge, and although the EZ adds something it’s hard to say what. Two Glass Wharf would have happened anyway – and Skanska are about to start speculative development outside the EZ boundaries, which suggests EZ status isn’t decisive in developers’ decisions.”
Price thinks the revised change-of-use rules – which could see 500,000 ?sq ft of city centre office space taken out of the office market and converted into apartments – will be judged a more significant policy intervention than the enterprise zone.
David Mace, regional senior director at GVA, takes a more sympathetic view. “Developers think the EZ signals a focus for the council and from the local enterprise partnership, it shows a level of commitment to the Temple Quay area, and that is probably more important than the immediate financial benefits which have had very little, if any, impact.
“It’s about marketing, branding. It helps developers feel more comfortable in that way.”
Jeremy Richards agrees. Richards is head of Jones Lang LaSalle’s Bristol office and sits on the LEP’s inward investment board, which is overseeing work in the enterprise zone.
“The EZ has been a good marketing hook,” he says. “It’s galvanised the marketing effort – but of course we want to promote all of Greater Bristol.”
Although a whole-hearted supporter of its virtues, Richards is a realist about the zone’s appeal.
“The EZ is never going to be wow,” he says, describing the benefits on offer to new occupiers. “To be wow the government would have needed to make the incentives massively distorting, and that could have been damaging. The benefit of the EZ is that it puts the spotlight on Temple Quarter.”
Bristol’s EZ may not be wow – it may not be a jet aircraft roaring across the Bristol property market. Yet – with some niggles and regrets – the city’s property folk think it’s worth having, even so.
Air force… Won
Looking out over the apron at Newquay airport Trevor Bailey, chief executive at Classic Air Force, thinks he made the right move from Coventry.
“We knew about Newquay before the enterprise zone announcement – we thought about it – we knew it had lots of apron, a long runway, was ideal for jet aircraft, although more challenging for some of the older propeller-driven craft,” says Bailey.
“In the end we were enticed to Newquay. The broadband provided by the enterprise zone is important, as is the large building – because Cornwall’s leisure market needs more facilities under a roof,” Bailey explains.
Unkind observers east of the Tamar describe the task of the Newquay EZ as “pushing water up hill”. However, Aerohub EZ manager Miles Carden says that in Cornwall – where high levels of European Union funding are already available for new development – the EZ is the cherry on top of a well-iced cake.
“Our challenge in Cornwall is to get noticed by a national audience, and being part of the exclusive club of enterprise zones is important to us.
“Being in that good company helps challenge perceptions – and the profile the EZ offers Newquay is very important,” he says.
Cornish agents agree. Alan Trelor, head of agency at Vickery Holman in Truro, says: “The EZ adds to what we have already, and anything that brings anything to Cornwall is not a bad idea. I can see the Aerohub gaining momentum.”
Tom Duncan, associate in the Truro office of Alder King, agrees: “The EZ is a real help in marketing Cornwall, but the truth is that the real incentives aren’t on offer from the EZ, they are on offer from European funding.”
