Business Parks
What are they - and who's using them?
Jane Ambrose finds out by asking James Thomson, a director with DTZ Debenham Tie Leung, but discovers it's a complex definition.
A BUSINESS park is a development of commercial property in a low density environment, usually in a non-city centre location. That much is clear. But what’s the difference between a business park and a science park for example – or a trade park.
‘Well, when you speak of business parks,’ says James Thomson, ‘generally office space (or a mixture of offices and industrial), is meant. If you stray too far from this definition you’re really into an industrial park or even a retail park – or something else entirely different.’
Although some parks do have other elements in them…
Traditionally, low density has tended to mean that the buildings are of a low height – two, three or four storeys, with surface level car parking, and extensive landscaping. Parks located away from amenities may also have facilities such as an hotel, a health and fitness club, and some retail. And they all have a good level of road connection and landscaping.
‘The reason they came about,’ says Thomson, ‘was the desire to have offices which were low cost, large floorplate, and accessible by road . Traditionally most office space had been in the city centre or at least a suburban site, often with constraints which affect building style and shape.’
‘Taking a concept which had already been explored by a number of company HQ’s which had bought sites in nice, leafy areas out of town, this was expanded to address the general market. If it produced advantages for the bigger companies then it would work for lots of small to medium sized ones in a similar environment.’
It really ‘kicked off’ in the UK in the late eighties when the planning system was deregulated and it has evolved over time. The first business parks tended to be aimed more at high technology users – so they were chasing a particular type of company which wanted flexibility, low cost, low density, plenty of car parking, accessibility for staff etc.
What’s the difference between a business park and a science park then?
‘Science Parks are really just a subsection of business parks,’ says Thomson, ‘and any business park can have a focus either because the developer chooses to or because the planning regulations demand it.’
He continues: ‘If you look at the Use Classes Order which defines use criteria within the office sub section, there are three categories – offices, light industrial, and research and development. So science parks are often specifically restricted either by the park owner because they are a research institution and are looking for spin-off, or by the planning authority because they wish to promote the use and so make it a condition of getting planning consent.’
The City of Dundee, for example, is promoting a digital media park at the moment – and this is a specific section of a specific section because they have perceived that there is a market for the use, and they want to create special conditions for it.
‘Initially,’ says Thomson, ‘the out of town schemes focused on high tech companies, computer companies and the like, basically because of the space requirements arising from the IT boom in the late eighties early nineties.’
These evolved from industrial parks to becoming office parks, and have been very successful, continuing to be so but constantly evolving. So the first generation of business parks were pretty basic flexible office/production space, the next generation were more sophisticated and office orientated, and after that the concept has gone in various different directions. There are many different types and examples.
‘A major part of this evolution,’ says Thomson, ‘was that during the late eighties there was a definite desire for a lot of car parking– one for every employee, if possible, which is land hungry and environmentally unfriendly. There’s now a big push by Government to reduce traffic, and also an environmental agenda by companies to stop all of their staff using cars.’
So alternatives have, of necessity, been introduced – because of a green agenda which has taken over in most companies, partly because they have seen the writing on the wall from the Government’s standpoint. Planning authorities have taken a tougher stance so, for example in the Edinburgh planning area, car parking for new development is restricted. Certainly fewer than one space per employee.
‘What we are starting to see,’ says Thomson, ‘is the desire from both the occupiers and the planners viewpoint to find multi-modal transport locations, close to stations, on the bus routes – offering transport options in addition to cars. The other thing to notice is that the quality of these parks has improved considerably. Buildings are of a far superior quality than before, values have gone up, landscaping is expertly done, management is an integral service.’
This has always been an issue in Scotland because rents are relatively low away from the key cities, and what a developer can afford to spend on a business park depends on what can be earned from it.
‘In Scotland there is a wide range of schemes. Probably the flagship is Edinburgh Park which, whilst a business park, has a terrific environment, and buildings which are up to city centre standards. It has two stations next to it is close to an international airport, and also has good road connections.’ Ironically the one thing that is causing Edinburgh Park problems now is the volume of traffic around it – generated not only by the park itself but by the activity in the surrounding area.
A more average situation would perhaps be Almondvale Business Park in Livingston, which is a standard business park, relatively low density, two or three storey and all the car parking at surface level. ‘There is a measurable value difference between the two’ says Thomson, ‘so you have to cut your cloth as to what the developer can provide.’
And why is there not the volume of successful business parks in Scotland compared with urban England?
‘In my opinion,’ says Thomson, ‘this is simply because values don’t drive the same level of activity up here. There is neither the same level of demand nor enough locations driving sufficient value to make them fly.’
TRADE PARKS – THE WAY FORWARD?
Planning consent has recently been granted for Edinburgh’s first trade park at South Gyle Crescent on the west side of the city. South Gyle Trade Park is the second of its type in Scotland but there is a feeling that this won’t remain the case for long.
Ian Davidson, a Senior Surveyor with DTZ Debenham Tie Leung says: ‘The park comprises 18 properties in two clusters totalling 120,000 sq ft. There are a broad range of unit sizes, some with dedicated yard areas and we therefore have the ability to provide property solutions for the majority of trade occupiers. The new consent permits retail sales from up to 20% of the floor area of each unit for operators in sectors including DIY, building, kitchens and bathrooms, tools and planning, drainage, plumbing, painting and wallpapering, windows and conservatories and motor vehicle parts.’
He continues: ‘We are responding to market demand and have created something unique in Edinburgh that will occupy a niche position in the commercial property market.’
Stuart Buchanan asset manages the park in his role as Director of Cardross Asset Management and was formerly involved in the creation of Scotland’s original trade park at Kingston Bridge, Glasgow. He says: ‘The valuable planning consent attached to this park will attract many diverse occupiers and the flexibility of floorspace allows them to expand without leaving the park.’
There’s nothing else like it in Edinburgh and Buchanan continues: ‘A few parks call themselves trade parks but none actually have a trade park consent allowing part retail on all their units.’
Ian Davidson agrees and comments: ‘We already have strong interest from market leading players in the trade sector and are in advanced negotiations on some units.’
EDINBURGH PARK DEALS INSPIRE MARKET CONFIDENCE IN WEST EDINBURGH
Consistent lettings throughout the last quarter of 2004 and the start of 2005 have resulted in more than 125,000 sq ft of take up at Edinburgh Park during that period, and are fuelling a shift in market sentiment towards a more buoyant 2005 for west Edinburgh.
With total take-up for the 12 months to January 2005 approximately 330,000 sq ft and supply at the end of last year totalling 275,000 sq ft, there is, theoretically, less than a year’s supply currently available across the west of the city.
Cameron Stott, National Director with joint letting agent Jones Lang LaSalle, says: ‘Although only midway through the first quarter, the lack of new development combined with the surge of deals over recent months is already creating a dip in availability and stabilising rents. Optimism is evident across the market and there are even signs of some possible speculative development.
‘With planning permission already gained for 6 Lochside View and outline permission for a hotel that will further extend the Park’s amenities, Edinburgh Park developer New Edinburgh Limited (NEL), is one of those currently reviewing options for the year ahead.’
One of the key factors in attracting and retaining occupiers is The Park’s long term transport policy which, over the past 18 months, has strengthened its accessibility to create a premier transport hub. In its first year of operation Edinburgh Park rail station is already experiencing passenger numbers almost double expectations, and the Park is also on the Edinburgh Fastlink route - Scotland’s first guided busway that accelerates travel to and from the city. This, coupled with an established car sharing scheme, priority access road to the M8 motorway, the Park’s proximity to Edinburgh Airport and its position on the proposed Edinburgh tram line route, has helped distinguish the site as one of the most accessible locations in Scotland with its integrated transport infrastructure and facilities as a strong USP.
ST JAMES BUSINESS PARK
One of the largest new-build office developments in Renfrewshire is SCOT Sheridan’s St James Business Park development just a mile from Glasgow airport and 15 minutes from the city centre.
The £6 million, 31,300 sq ft development was completed at the end of last year and comprises three high quality pavilions ranging from 5,500 sq ft to 17,000 sq ft in size. Office space will be let in suites of 2,500 sq ft and upwards or alternatively, entire pavilions are available to purchase on a feuhold basis. Electronics giant Samsung has already moved in to a 2,680 sq ft space in the Park.
SCOT Sheridan Director, David MacLachlan says: ‘The development of this area has really taken off in the past few years – indeed SCOT Sheridan has itself invested over £13 million in St James Business Park and the adjacent Imperial Park. The location is superb – right next to the airport and the motorway, however, we identified a gap in the market with a lack of good quality office accommodation for businesses wishing to relocate to or remain in the area. St James Business Park is addressing that shortage and provides a top quality, bright, modern solution which is close to Glasgow city centre and right next to a wide range of amenities. Interest is high in the three pavilions and we firmly believe that this new development will help to attract more companies wishing to set up business in the area.’
Financial assistance packages for many businesses are available from Scottish Enterprise Renfrewshire and more information on St James Business Park is available from Ken McInnes at Ryden on 0141 204 3838, or Greg Limb at James Barr on 0141 300 8000.
KNIGHT FRANK SECURES LETTING AT NEW ALLOA BUSINESS PARK
Knight Frank acting on behalf of the joint landlord, Clackmannanshire Investments Ltd and Scarborough Development Group, has completed the letting of 10,000 sq ft (929 sq m) to Scottish Furniture Distribution Ltd at New Alloa Business Park.The tenants have entered into a FRI lease for a period of 10 years at a rental price of £4 per sq ft and received a two month rent free period from the commencement of the lease. The tenants have also taken an option over additional buildings reflecting the strength of the location. New Alloa Business Park, previously known as the ‘Alloa West Smart Village’, offers high quality business accommodation. The site benefits from a strong road network lying within a one hour drive time of Glasgow, Edinburgh and the central belt.
Nick White, Partner at Knight Frank, says: ‘Clackmannanshire is proving a real hotspot in terms of the number of enquires we are receiving for both office and industrial space in the area. Companies are attracted by the reasonable sq ft rates and the excellent motorway links.’
Margaret Paterson, Leader of Clackmannanshire Council was also pleased and comments: ‘The future development of the park has been a long term ambition of the Council and we are obviously pleased that everyone’s hard work is now achieving successful results. We wish Furniture Distribution Scotland Ltd every success in their new venture.’
SKIING FOR BUSINESS ON THE CLYDE – BRAEHEAD FOR BUSINESS IS REDEFINING A DAY AT THE OFFICE
In just over a year, Scotland’s first real snow indoor ski slope, Xscape, will be opening at Braehead. Extending to 460,000 sq ft and including extreme sports, a cinema, specialist retail, bars and restaurants, it will attract around three million visitors in the first year alone and will quickly become one of Scotland’s leading leisure and tourism assets.
Xscape is a major part of the next phase of development at Braehead, which in just ten years has been transformed from redundant land into a thriving mixed use destination employing many thousands of people and generating millions of pounds for the Scottish economy.
The next phase includes up to 750,000 sq ft of flexible business space under the Braehead for Business brand offering a variety of usage, including HQ buildings, and ranging in size from 10,000 to 300,000 sq ft. A brand new public park and around 1350 new flats and houses are being built, together with a new riverside walk, paths and cycleways, so there will be plenty of opportunity for all employees to enjoy fresh air before, during or after work.
The opportunities for businesses are all part of a vision to create an innovative ‘work life balance’ business location that offers companies a key strategic advantage in an increasingly competitive, global economy.
Driving Braehead’s strategy is the growing recognition that employees are the most valuable asset in the majority of businesses. Research consistently shows that a happy, healthy and motivated workforce is more productive, which in turn benefits business performance. Equally, research also shows that one of the biggest issues and costs for business is finding, and then retaining, the best people. Demographic trends indicate that this will become increasingly important.
Companies locating to Braehead for Business could negotiate salary and benefits packages that include snow boarding lessons. Now that is competitive advantage!
At Braehead for Business, a day at the office will never be the same again. For further details on the development at Braehead please contact joint agents Colliers CRE or CBRE.
NORTH AYRSHIRE BUSINESS PARKS GO UP FOR SALE
Two linked business parks in North Ayrshire have been put on the market with a price tag of £2 million.
Stevenston Industrial Estate, which stands at 173,163 sq ft and the 114,369 sq ft Nobel Business Park are both located on the south east edge of Stevenston, and offer a range of office and industrial accommodation, with additional development land.
Although both properties are being offered for sale jointly, Stevenston Industrial Estate is currently owned by Ardrossan, Saltcoats and Stevenston Enterprise Limited, while Nobel Business Park is owned by Scottish Enterprise.
Rental income for Stevenston Industrial Estate currently stands at £213,669 per annum, while Nobel Business Park generates £77,383 per annum. Tenants on the parks include North Ayrshire Council, electrical engineer and contractor Booth Welsh and logistics company Barlow Handling.
Offers over £2 million for the entire 106 acre site are being sought from potential developers and investors. Scottish Enterprise Ayrshire manager of Global Connections Michael Wright says: ‘Based on the very positive interest expressed in these sites in the past, we anticipate some firm offers from potential owners. Both estates offer significant opportunities for development and we look forward to the new owners bringing fresh investment into the area and helping create an even more attractive environment for business in North Ayrshire. Given that there has already been such significant interest, we anticipate setting a closing date for best and final offers.’
Charlie Lawrence, surveyor at Ryden says: ‘Both estates offer an opportunity to add value and improve returns. ‘We have already received a good number of enquiries and are confident a closing date will be set soon.’
