“There’s an awful lot of discussion about eye-catching infrastructure investment and not enough effort or money put into basic levels of connectivity between cities around the UK. That would get you a lot more bang for your buck much more quickly than the grand projects that we hear about.”
Surprisingly, this frank opinion comes not from a disgruntled commuter, but the chief investment officer of one of the country’s major landowners.
Speaking during a panel discussion at this year’s MIPIM, Paul Clark of the Crown Estate shared his personal transport experiences (and frustrations) while attempting to ferry global investors between Liverpool and Newcastle. The journeys were blighted by poor quality rolling stock (described by Clark as “a two-carriage boneshaker”) and extended journey times – factors hardly likely to impress potential foreign investors, much less long-suffering commuters.
Clark’s core point, that small transport improvements can make a significant difference, is a serious matter for occupiers, developers, investors and local authorities up and down the country. Transport for the North, the umbrella organisation now responsible for the area covered by Clark’s unhappy travels, says it is working up a list of smaller projects, but it is too early to specify them.
What constitutes small is partly subjective, but EG has considered a number of schemes (see boxes) where the development cost is £50m or less. That is small change compared with the billions spent on big ticket items such as HS2 (£56bn), Heathrow’s third runway (£19bn) or Crossrail (£15bn).
“Infrastructure can be valued in several ways. The capital cost, the economic benefits it will generate directly and indirectly such as jobs and land/property value, or what it offers to its future users’ quality of life,” explains Gareth Wilson, partner at planning consultancy Barton Willmore. “Increasingly important is the ability of the infrastructure to capture the increased land and property values to pay for all or part of the capital cost. So the residual cost is also important.”
Laura Shoaf, managing director of West Midlands Transport, agrees that stakeholders who benefit from smaller-scale transport infrastructure improvements (known informally as ‘major minors’) should be invited to share the costs. She says: “We absolutely ask for contributions – sometimes significant amounts. Landowners have been more receptive than expected, perhaps because they understand the benefits.”
This is certainly true in Yorkshire, where BMO REP, which two years ago purchased the 565,000 sq ft Parkgate Shopping scheme in Rotherham for £175m, is supportive of a £14m new platform at the town’s station, due to be served by tram-trains from Sheffield from next year. Carolyn Sparshott, BMO’s asset manager – out of town retail, says: “We will look at providing a tram-train park-and-ride area, a new entrance into Parkgate Shopping and upgrading the whole entrance area with a customer transport hub.”
The risk of many smaller scale schemes providing a disjointed patchwork of benefits can be mitigated by overarching planning. Conor Moloney, head of masterplanning at Carter Jonas, says: “There are several issues when it comes to ensuring that the potential of these smaller projects is harnessed as effectively as possible, and it is here that masterplanning is key. The process is so much more than just dictating where green space should be allocated, and how many homes should be built, but how each individual project links up to the wider regional, and national, system.”
Worcester –rail at the crossroads
Earlier this year the government gave the green light for a new railway station at Worcester Parkway, the crossing point for the London-Worcester main line and the cross-country route linking the North with the West Country. Construction of the £25m project is due to start in earnest this autumn, with the opening expected by the end of 2018.
Plans for a station on the site were first suggested 40 years ago, but with limited parking in Worcester city centre and a local desire to improve journey times to London, Worcestershire County Council recently forged ahead with the scheme. Although property development may take place around the station, this wasn’t the original intention. “In local plan terms this is very much a transport hub. The private sector is keen to develop, but that wasn’t included in the local plan, so the case will need to be made,” explains Nigel Hudson, the council’s head of strategic infrastructure and economy.
Most of the cost of the station, which includes £8.3m of local growth funding accessed via the LEP, is expected to be recouped by letting the structure to a train operating company (initially Great Western Railway). Hudson’s tips to others considering a similar project are: “Be very clear on the strategic intent and stick to it. Don’t underestimate the complexity of the evidence base required when working with the rail industry.”
Bristol – due South
“Small ticket regional infrastructure improvements are political winners – we have some great examples in the West including the South Bristol link road A4174 extension,” says Chris Selway, head of compulsory purchase & infrastructure at BNP Paribas Real Estate. This £45m scheme opened early in 2017 and benefits include improved access to South Liberty Lane and Ashton Vale Trading Estate and Cater Road Business Park, large traditional B1/B2/B8 employment areas in south Bristol; the attraction of jobs to south Bristol from outside the area; as well as the release of development land for residential and commercial use.
“These were previously small pockets of land that were just bits of grass with no way of accessing them,” says Philip Cranstone, associate director at Cushman & Wakefield’s Bristol office. “As an industrial agent I’d say these [small scale] types of schemes are better, though my office agent colleagues will probably disagree.”
Yorkshire – better by bus
Bus improvements are often overlooked as they don’t provide the obvious development benefits associated with a rail, tram or road scheme. Nevertheless they can be equally important in stimulating economic growth of local areas. In South Yorkshire, Sheffield City Region contributed £4m towards the £30m Bus Rapid Transit North scheme which opened in late 2016, running 12km along the Sheffield Rotherham Don Valley corridor.
Martin McKervey, partner at Nabarro and member of the Sheffield City Region infrastructure executive board says: “BRTN provides an entirely new public transport line for an estimated 7,500 passenger journeys per day, serving more than 70 potential employment sites and 80 potential housing areas.”
Elsewhere in Yorkshire, the West Yorkshire Combined Authority has recently completed a string of new rail stations – most recently the £10.8m Low Moor stop, near Bradford, which opened this month (April 2017).
East Anglia – northern exposure
May sees the opening of the £24m Cambridge North railway station, bringing significant improvements to the local area. Local agent Cheffins estimates nearby house prices will be boosted by up to 15% and the firm’s joint managing director Philip Woolner believes that the £6 per sq ft jump in office rents in the past four years is partly attributable to the new station. He says: “It is going to have an important regeneration role for Cambridge as it will open up about 50 acres of undeveloped land around what was previously the Chesterton Sidings, all of which is going to be brought forward for office, R&D and residential development.”
In the north of the county, work has just started on the construction of the £36m Ely Southern Bypass, due to open next year. “This ought to help open up the area north of Ely and we would hope that these improvements may encourage more business to be located north of the city,” says Cheffins associate Steven Harvey.
