Southampton is following in the footsteps of the Northern Gateway Development Zone in the North West, exploring options to build a modular construction facility to tackle the city’s housing crisis.
The city council is in talks with the Homes & Communities Agency to explore how to unlock land and funding for a factory to help the area provide more homes for its 9,000-strong waiting list. It is an idea also being explored by the NGDZ – a group of seven councils and two local enterprise partnerships in Staffordshire and Cheshire.
Dawn Baxendale, chief executive of Southampton City Council, told an audience of 200 people at EG’s Southampton Question Time event: “We are seriously looking at creating our own housing factory company in terms of modular build. We are also in talks with local authority partners and the private sector. We own one in five homes in the city and there is a waiting list, so we are being extremely innovative.”
The private rental sector is also seen as a potential means of delivering housing in the city but some developers think it might take time to catch on.
Paul Brett, land director at Inland Homes, which is developing homes for sale at Chapel Riverside and Meridian Waterside in Southampton, said that while his firm would be keen to harness the opportunities of build-to-rent, it has struggled to gain traction on its projects because of cautious operators and those who thought sales were more profitable.
“The huge discount from PRS that relates back from market values is unattractive: it is about 20% to 30%. Also, the areas in which we are investing are regarded as immature markets by some,” he said.
There have been inroads with PRS development elsewhere in the city centre. The £60m Fruit and Vegetable Market development, in the city’s Queensway district, is being delivered by the Hampshire & Regional Property Group, and will create 84 one- and 195 two-bedroom apartments across three blocks, as well as nearly 9,600 sq ft of commercial space.
Nick Jones, director at Aecom, said: “The PRS market is a lot more interested in strong regional cities with good transport links and universities,” he said. “When Fruit and Veg comes to the market, it will be quite a different concept – and one ex-students will love. There will be a whole menu of services you can buy.”
Baxendale added: “The company that is investing in Fruit and Veg is a US firm and its first investment is in Southampton. The council is looking at PRS for our own estate regeneration work. We think this is potentially a burgeoning market. You have to think about the audience: 40,000 students, people employed at the hospital, people working at the universities, tech people and young professional people – there is a market there.”
SOUTHAMPTON QUESTION TIME PANEL
■ Dawn Baxendale (pictured), Southampton City Council
■ Gavin Hall, Savills
■ Nick Jones, Aecom
■ Paul Brett, Inland Homes
■ Chaired by Stacey Meadwell, EG
PRIVATE SECTOR URGED TO BUILD OFFICES
There is just one and a half year’s supply of grade-A stock left in Southampton, but it is lack of development rather than lack of permitted development rights that is primarily to blame, according to Savills.
The amount of office space currently available in the city centre is less than half 2006 levels, with only 50,000 sq ft of grade-A stock under refurbishment.
But Gavin Hall, director and joint head of planning for Southampton at Savills, said stock affected by PDR consisted of buildings that were already unfit for office purposes.
“What we don’t have is that liveability of the city centre,” he added. “A lot is now being determined by HR departments, looking for employees who are ex-students living in the city centre. We need to provide the accommodation and offices in the city centre.”
Dawn Baxendale, chief executive of Southampton City Council, said: “If the offices had been so good, people would have been in them. We needed to take the grade-B stuff out of the market.
“Since our masterplan in 2012, we have £2bn of value in the city either built or being built, and £0.9bn in the pipeline – close to our £3bn target – half of which the public sector has invested in.
“Private sector, it is time for you to find your money and get your offices built.”
Hall added that the shrinking supply was pushing up rents but empty rates charges would deter speculative building.
COUNCIL FUNDING DRIVE WINS SUPPORT FOR TRANSPORT PROJECTS
How to improve Southampton and the South Coast’s creaking infrastructure was one of the most popular questions put to Dawn Baxendale, chief executive of Southampton City Council, and fellow panellists at EG’s Southampton Question Time event. Speaking after the debate, she expanded on what the council was doing.
“The city council takes an incredibly active role in bidding for money. Bluntly, we are bloody good at it. We have secured £100m for the local enterprise partnership to do feasibility work on an ambitious idea around light rapid transit and have argued very strongly that the first phase of that should be in Southampton. We are thinking very long term: in the next 10 to 15 years, the whole transport system is going to change fundamentally.
“We have secured real money for Redbridge Roundabout from Highways England, which usually only invests in motorways. But we have won £5m and we are currently in discussions for £70m for the Eastern Access Road.
“The Port Masterplan is something we have a very keen interest in. And it can’t be all about cars. We will all have to change our behaviour – how do we plan for sustainable transport? We have brought £6m in to work on ways to get people out of their cars and we are currently looking at in the region of £135m of various bits in relation to that.”
Dawn Baxendale portrait by James Newell
Southampton Question time is in association with:
Savills ■ Southampton City Council ■ AECOM ■ Inland Homes ■ Wilmott Dixon
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