Close to the Pennines, seven miles east of Manchester, the market town of Ashton-under-Lyne is an unassuming place. So the local property industry has welcomed moves to create a commercial centre there.
Ask Property Developments saw the possibility of a business quarter in Ashton six years ago. An area of land between Park Parade and Brook Street East, near the town centre, was recognised as having potential for an office scheme, especially with junction 23 of the M60 only half a mile away.
The result is the £42m St Petersfield development. When it is completed in five years, the 400,000 sq ft scheme will provide up to 280,000 sq ft of offices, plus homes, shops and leisure facilities. There will also be a public square. Andrew Parker, senior project executive at Ask, says: “This is what regeneration is all about – rundown areas in towns that need an employment boost.”
Increased employment
Whether the scheme will indeed provide that necessary employment boost will be testament to how the scheme is brought forward, and how the market responds, say some commentators.
The scheme, a joint venture between Ask and Tameside council, came about when Ask approached Tameside in 2001. Councillor Kieran Quinn, executive member for economic services for Tameside council, explains: “This is a key gateway site into Ashton. Work on the business quarter will bring jobs, and benefit the whole of Tameside. It will attract the quality jobs we want to our borough.”
A significant landmark in the development of the scheme was taken when a CPO for the site was confirmed almost two months ahead of schedule, in early 2003. The following year, funding totalling £14.5m was secured from the Northwest Regional Development Agency, English Partnerships and the European regional development fund.
The first phase of construction, a £4.6m building designed by Aedas Architects, is due for completion in July. The 49,000 sq ft building, on Stamford Street West, is on the market to investors at a minimum price of £9.6m expected, reflecting a net initial yield of 6.8%.
Ask secured the scheme’s first letting when Pennine Care NHS Trust took 25,000 sq ft of the building at £13.75 per sq ft. The trust, which had been looking to relocate its headquarters for some time, signed a 15-year lease with a 10-year break clause. The remaining 24,000 sq ft has a quoting rent of £15 per sq ft for units from 3,700 sq ft upwards.
In August last year, another healthcare user, Tameside and Glossop Primary Care Trust, agreed the presale of a 40,000 sq ft primary care centre at the scheme. Although less than a quarter of the office development has been taken, Ask is confident demand from local professional services and other health care organisations will fill the scheme.
Philip Meakin, head of offices at Dunlop Haywards, joint agent on the scheme with Cushman & Wakefield, says: “Eight months before completion, we have prelet more than half the first phase of the scheme, and we are receiving a good level of interest in the balance of the building. There is clearly latent demand from Ashton, Denton and Hyde – towns within a five-mile radius.”
Meakin also believes the development’s location will encourage further, potentially footloose, occupiers.
One thing that is not disputed, even by detractors of the scheme, is that St Petersfield is offering regionally competitive rents (see graph). But Rupert Barron, partner and head of office agency at Donaldsons, believes potential occupiers may need to be attracted from further afield.
He suggests the tenants and occupiers already secured are “pioneer tenants”, attracted by a relatively new market, but questions whether the town’s social infrastructure is sufficient to attract and retain staff. He believes that there could be a need for some “major inward relocation to underwrite the success of the scheme”, and that extra incentives could be required.
Further incentives
Parker dismisses these concerns, citing evidence of interest to date. He argues that the scheme is competitive enough on price and quality, so no further incentives over those normally offered, such as rent-free periods, will be required.
Treading the middle line is Chris Mulcahy, partner and head of office agency with King Sturge, and agent on the 100,000 sq ft Ashton Moss office development, close to junction 23 of the M6, that was recently given planning permission. As a result, Mulcahy, on his own admission, has to be careful what he says about St Petersfield.
Mulcahy believes, however, that most demand for Ask’s scheme will come from within a five-mile radius of the town. He cautions against immediate large-scale speculative office development. “I think they should drip-feed development to the marketplace because ultimately, apart from government agencies or agencies specific to Ashton, demand is likely to be from smaller occupiers,” he says.
With Ask planning to speculatively develop a further seven office buildings at St Petersfield over the next five years, this advice may yet be heeded.
Meanwhile Andrew Gardiner, director of DTZ, thinks success will come because St Petersfield is a large town-centre scheme, unusual in Greater Manchester’s satellite towns. “It is realistically part of the town, not on a map close to the town,” he observes.
After their initial leap of faith, the development partners can take comfort from a largely positive local response to St Petersfield. But they will have to wait another five years until the scheme is complete and let before they can finally be sure of its success.
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Proposals are afoot for a residential development that will include 80 homes and a multistorey car-park with 500 places, to serve both residential and commercial elements of St Petersfield. Submission of planning applications is expected in the middle of this year with work on site beginning late 2006 or early 2007. Tameside council has already given detailed planning consent for the whole of the public realm work. Led by Planit Environmental Development Consultants, the landscaping scheme is due to start on site inApril or May. Developer Ask wants to have a substantial amount of the public realm completed by the time Pennine Care NHS Trust occupies its space in August. |
