Infrastructure improvements and Network Rail hold the key to Exeter’s future supply of office space.
In the short to medium term, there is enough supply to satisfy out-of-town demand at sites, such as Rok’s Exeter Business Park and Summerfield’s Pynes Hill.
But once these are built out, there is nothing.
Shortages in the city centre are even more critical, with only one building – Rok’s the Senate – under construction, and this is already partially let.
Nor are there sites earmarked for development.
Out of town, there are major plans to extend the city eastwards with a new settlement, a science park, a business park and a multi-model freight distribution centre.
In all, the expansion could see 3.62m sq ft of commercial space created alongside a minimum of 5,000 homes (see box).
But it is early days.
Infrastructure that is key to opening up the sites is in the early stages of being brought forward, and there are no developers lined up for the commercial elements.
How these projects are going to be brought forward, and how the private sector will be involved, should become clearer over the next 12-18 months.
For example, whether the business park to the east is packaged off and sold to developers or developed by just one company has yet to be decided.
Karim Hassan, corporate director of environment at the South West of England Regional Development Agency, says: “The expansion is crucial because land supply is running out and it is getting desperate.
“This is going to be one of the main ways we address the land shortage.”
Uncertainty about the city centre is even deeper.
No one can point to where the next office development will be.
Instead, there is speculation about opportunities, but not so much as a planning application has been made.
Ralph Collison, partner at Alder King, believes it is essential for the city centre to have a new office location, if only to snag public-sector requirements, which tend to prefer to be in the centre.
There has been a steady drift of occupiers over recent years to the out-of-town business parks, where there is only around two to three years of developable land left. Cubex Land’s, 55,000 sq ft out-of-town scheme is in the supply stream.
“The location of offices is very much at the forefront of our mind, and there are various developments going through considerations,” says Richard Ball, head of economy and tourism at Exeter council.
“It would be wrong to ignore the fact that there may be further options around St David’s railway station and Sidwell Street, but there is no obvious solution.”
The area around St David’s station is owned by Network Rail.
Property people talk of emulating Bristol’s Temple Quay development, albeit on a much smaller scale, but it could be wishful thinking.
A Network Rail spokesman says it is concentrating on its “operational needs”, and only interested in improving the station.
Knight Frank partner Padrig Fleming says: “There is speculation that St David’s could be the new office quarter for Exeter.
“There is a logic to it, but it would be pioneering. However, if the supply situation gets much worse, it could be the only option.”
Exeter’s eastern expansion plans
Infrastructure
First phase Clyst-Honiton bypass, which will connect Exeter airport junction on A303 with Skypark, a freight terminal and a new settlement
Has planning permission and funding in place. Work will start before April
Second phase Improvements to junction 29 of M5. Has some public sector funding
Plans being made to get remainder of funding from the private sector
Business park
Adjacent to the airport and called Skypark. Phased development of 1.5m sq ft over 13 years
Resolution to grant outline consent in May
Devon county council is landowner. Marketing will commence once a legal agreement has been drawn up
Exeter science park
A partnership between a number of public sector bodies, including SWRDA and the Met Office
Low density development at junction 29 of M5 of 620,000 sq ft on 62 acres
Masterplan expected to be completed by end of the year with planning application following
Multi-model freight distribution centre
First phase of 65,750 sq ft, but development will total 1.5m sq ft on 65 acres of Church Commissioners land
Resolved to grant outline permission subject to legal agreements
New settlement
2,900 homes in first phase
Will eventually have a minimum of 5,000 and up to 6,500 homes when completed
Working on final stage of legal agreements
Market at a glance
Office demand 300,000 sq ft
Office supply 100,000 sq ft
Headline rents city-centre, £16.50 per sq ft out-of-town, £16 per sq ft
Industrial land is scarce but the market is otherwise healthy
Industrial demand 275,000 sq ft
Industrial supply 150,000 sq ft
Industrial headline rent £7 per sq ft
Top zone A retail rents are £250 per sq ft in Princesshay
Exeter aims to become live-sleep-work-play city
It is a mild, midweek evening in May, but Exeter city centre is not as deserted as you would expect for a provincial city.
Instead, there are people taking an evening stroll and newly opened restaurants are doing a reasonable trade with al fresco dining.
And this is nearly four months before Land Securities’ 390,000 sq ft retail-led mixed-use scheme is officially opened.
Princesshay, as Land Securities’ scheme is known, will seal Exeter’s bid to become a vibrant,live-sleep-work-play city – although maybe not 24 hours a day.
The streetscape-style scheme is 85% let, with Debenhams as its anchor, and is achieving rents of up to £250 per sq ft zone A – £75 per sq ft higher than the level achieved pre-Princesshay.
But amid all the activity and rejuvenation, there is an air of discontent. And that stems from Exeter not having a John Lewis store.
No plans
Indeed, a spokesperson for the grand dame of Britain’s high streets says the head office frequently gets calls from people in the city asking when the store is going to arrive.
The truth is, it isn’t – yet.
John Lewis has expansion plans but will not say anything specific about Exeter.
Market players point to the bus station site as a suitable home.
Once the buses are relocated, it could form a link between Princesshay and the new Vue cinema complex on Cheeke Street, which LandSec has also developed.
Agents say the bus station could be moved to Exmouth Junction – a 14-acre site owned by Network Rail.
But the rail company remains tight-lipped about any of its plans in Exeter.
What stage negotiations are at, if any, is unclear, but it seems that, if John Lewis could be brought to Exeter on will alone, it would happen tomorrow.
Richard Ball, head of economy and tourism at Exeter council, says the bus station, together with Debenhams’ former store, will form the next phase of regeneration.
“Once Princesshay is up and running, we will take an assessment of the retail potential at the bus station site, but we need Princesshay open first,” he says.
It is inevitable that the site will end up as mixed-use, with a retail element. Knight Frank partner Padrig Fleming says: “No one knows who is going to get the bus station site, but Land Securities has to be in the frame.”
Peter Cleary, head of retail development at LandSec, confirms its interest in the site.
“It is a strategic location, and we would be interested in dialogue with the council at the appropriate time,” he says.
The bus station project is five to 10 years away, but something that could come through sooner is the redevelopment of the soon-to-be-vacated Debenhams store at the other side of Princesshay.
Owned by LandSec, a residential-led, mixed-use refurbishment is planned, with up to 200 flats and supporting retail.
LandSec will no doubt be hoping to emulate the success of Princesshay’s residential element, which had buyers camping outside the marketing suite a full week before the sales launch.
The developer is undertaking a feasibility study and talking to a number of residential experts about the scheme, one of which is thought to be Urban Splash.
