Just when it looked like the fog was clearing over Warrington’s mighty Omega site, new mists of confusion have descended. Earlier this spring, Manchester and Liverpool city councils withdrew their objections to the first and second phases of the 558-acre development, planned by Miller Developments and Royal Bank of Scotland and backed by English Partnerships, which owns the land.
The apparent crumbling of the final obstacles to planning permission is good news for the controversial scheme. But since then things have begun to look less clear, with three distinct clouds casting shadows over the good news.
First, the agreement between Manchester city council and English Partnerships has left both sides claiming an uncertain victory. Second, May’s local elections saw the ruling Labour Party lose control of Warrington council to a Liberal-Conservative coalition – a development that could result in changes to council policies. And third, attention is now turning away from planning issues at Omega, to the question of demand. Many observers find the case for so much development unconvincing.
As far as English Partnerships is concerned, the councils’ withdrawal of their objections to phases one and two clears the way for the development of 1.8m sq ft of warehousing and 1.3m sq ft of offices .
But Manchester council’s deputy chief executive, Eamonn Boylan, insists the go ahead for phases one and two must go with a “fundamental review” of subsequent office-led phases at Omega, totalling 4.2m sq ft.
English Partnerships sees the matter rather differently, saying that phases three to five are not so much the subject of a “fundamental review” as of an unspectacular and timely reappraisal. Eliot Lewis-Ward, area director at English Partnerships, explains: “Given that the first two phases will take perhaps 15 years to develop, and the world and markets will all have changed in 15 years, by then we’ll wantto sit down and take stock. It would be sensible to do so.”
The effect of last month’s local elections is equally difficult to interpret. The Liberal Democrats are now the largest party on Warrington council, and, in coalition with the small Conservative contingent, will replace Labour as ruling party. All three parties have backed Omega so far, but councillor Ian Marks, the LibDem leader, will not guarantee unconditional support.
Tremendous benefits
“We’re keen to see Omega developed because it could bring tremendous benefits for local people,” he says. “But there are transport issues that we will be looking at very closely. Often, when you take control of a council, you discover things you didn’t know when you were in opposition. We’ll be talking to people, including Miller, and we’re open to changes at Omega if need be.”
While the politicians ponder the regeneration benefits and transport issues, property people are beginning to think about the commercial case for development at Omega.
Vince Sandwell, a director at Warrington property consultant BE Group, has worked closely with the council, and confesses to finding the commercial case for Omega unconvincing. “Total take-up of office space is about 300,000-350,000 sq ft a year, and that’s been fairly steady over many years,” he observes. “It’s difficult to see where a 100,000 sq ft letting for Omega would come from, because it’s not happening in Warrington now and hasn’t for a long time.”
Sandwell adds: “Warrington could have accommodated a really big letting, if there had been such a requirement, at Birchwood Park. But it hasn’t had to – and I can’t see that changing. Although Miller Developments says Omega will change the Warrington market, everyone else remains to be convinced about the business case.”
In other words, only if Miller can produce a development so astonishing that no occupier in the North West could afford to ignore it would the scheme begin to persuade occupiers, says Sandwell.
Speculative offices
For Jonathan Walsh, managing director at Birchwood Park, where 80,000 sq ft of speculative offices in the Bridgewater Place scheme was recently announced, Omega will always be on the wrong side of Warrington.
“Since 1999, twice as much office space has been let in the Birchwood area to the east as was let in the rest of Warrington,” he says. “That’s because Warrington looks towards Manchester in the east. Omega is almost twice as far from the M60 as Birchwood.”
Walsh thinks Omega will find a niche in the warehousing sector, but does not rate its chances as an office location. “We can all think of schemes that get planning and then nothing happens. Just because a scheme gets planning permission doesn’t mean occupiers are going to flock there,” he adds, chillingly.
Plans for Omega are nonetheless proceeding fast and the scheme’s promoters admit to no doubts. They expect the Highways Agency – which was worried that Omega would lead to sclerosis on the M62 – to withdraw its objection to the development this month. Salford council is also said to be preparing to withdraw its objections.
This is perhaps why English Partnership’s Lewis-Ward is enthusiastic that the scheme will finally come before Warrington council planners in July. “The signs are positive,” he says. “We are working hard to develop a scheme that positively contributes to the whole region.”
