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● 37-acre, mixed-use development with outline planning permission ● English Partnerships and AMEC were joint venture partners until August last year ● Outline planning includes 300,000 sq ft of B1, B2 and B8 space ● Phase 1 has detailed consent for 40,000 sq ftof offices ● Quoting rent of £13.50 per sq ft for offices as at July last year, according to King Sturge ● Holiday Inn Express, Vintage Inn pub/restaurant, Burger King and B&Q warehouse have all been completed on the site |
It is described as the best commercial site in the Preston area by one agent and an “unrivalled business park for central Lancashire” on its official website. Just four miles south of the Lancashire capital and close to three motorways, South Rings is understandably seen as a key place to build desperately needed offices.
And yet, over the past six years, English Partnerships and AMEC’s joint venture has built only retail and leisure units on the37-acre site, which both companies partly own.
“AMEC has missed a trick and should have brought forward some speculative offices,” says one agent, who wishes to remain anonymous. Others are equally frustrated by the situation at South Rings, but prefer not speak out for fear of souring relations with one of the region’s biggest developers and landowners.
The site could provide up to 300,000 sq ft of offices and, while retail and leisure are important, there are still no office workers at South Rings to make use of them.
There are rumours of a disagreement between the two partners. EP’s spokesperson points out that the joint venture with AMEC officially ended in August last year, and it is in discussions with the developer to “agree a strategy for disengagement from the residual elements of the joint venture”.
But a source close to AMEC says it was keen to keep the joint venture alive. AMEC’s senior surveyor Darren Lawless adds: “We are progressing with a reserve matters planning application for the development of the whole site. We’re in continued dialogue with EP on how best to bring forward development at South Rings to continue all the progress we have made to date with retail and leisure.”
Graham Deakin, director at Bailey Deakin & Hamilton, which is joint agent on the scheme with King Sturge, says that office development has never been far from AMEC’s plans. “AMEC has always waited for a prelet, but has had difficult site conditions to deal with which have taken several years to remedy. One of the prelets we had in place was unable to wait for us to deliver the site,” he says.
So what happens next at South Rings? There is evidence to suggest that, if large offices were built, they would let. Agents say that developers which have dared to build have been successful, particularly with freehold deals. And they stress that there is still demand for larger space.
Larger occupiers
“What Preston is short of is developers having the courage to bring forward bigger space. There is demand out there, even if it is from the public sector,” says Rupert Barron, a partner at Donaldsons.
For example, Matrix Park, part of Redrow and Barratt Commercial’s Buckshaw Village development at junction 8 of the M6, has seen successful small-scale speculative development. Richard Wharton of King Sturge, joint agent with DTZ, says: “We have been in discussion with larger occupiers at Matrix Park and, if we had built bigger units, they would have let.”
And Four Ward Properties developed a 35,000 sq ft unit at junction 31a of the M6 which Lancashire council has subsequently leased at a rent of around £13.50 per sq ft.
Planning application
Deakin says that AMEC is now considering doing some speculative development at South Rings with the aim of capitalising on the success of Matrix Park and elsewhere. “Matrix has proved that is there is demand,” he says.
A spokesman for AMEC says its plans for South Rings are for office development on the land that it owns as well as on land it hopes to acquire from English Partnerships.
English Partnerships, too, seems to offer some hope. “The site is subject to a detailed planning application to confirm the development of the residue of the site for B1 development, which, it is hoped, will include some speculative units,” says a spokesperson.
Whether this development will be undertaken by AMEC or a new development partner is not yet known. But, if it has taken a parting of ways to spur on development activity at South Rings, then it can only come as a relief to those in the Preston market who have been waiting for speculative office development.
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● Redrow and Barratt Commercial’s Matrix Park office and industrial scheme has seen freehold deals on four speculative sheds and three offices ● A price of £170 per sq ft has been achieved on a 6,500 sq ft office suite at Matrix Park ● Retailer Zara is rumoured to have a requirement for up to 20,000 sq ft in Preston ● Preston office rents: £8-£10 per sq ft for secondhand space; £14 per sq ft for new space out of town ● Industrial rents: £5-£5.25 per sq ft for 5,000-20,000 sq ft units (l/hold), or £60-£65 per sq ft (f/hold) ● Retail: zone A rents are around £100-£115 per sq ft on Fishergate, the prime pitch |
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Sources: King Sturge, Robert Pinkus & Co |
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Not content to sit back and let the other regional cities take the all the tower development glory, Preston could be getting its very own high-rise development. Manchester-based Brookhouse Group has submitted an outline planning application for a 24-storey mixed-use tower on a site between Stanley Street, Church Street, Grimshaw Street and Queen Street (pictured below). The tower will house a 106-bedroom hotel, 20,000 sq ft of offices and 65 flats. It will form the centrepiece of a 14-acre site where Brookhouse plans a 110,000 sq ft food store and further retail and leisure units. Local agent Graham Deakin, director at Bailey Deakin & Hamilton, says the site is in an area of Preston that is ripe for redevelopment. He points out that the Holiday Inn is the only major hotel in Preston city centre, so another hotel would be welcome. Peter Harris, the scheme’s architect, says the design would complement Grosvenor’s planned £240m retail-led Tithebarn scheme. But this is about as exciting as the news gets for Preston’s biggest proposed development. Grosvenor says it is still beavering away in the background with its masterplan. Preston’s agents are, however, getting impatient. “Tithebarn is a victim of its own public relations. On the ground, very little has happened,” says Danny Pinkus, partner at local agent Robert Pinkus & Co. Retail relief, it seems, will come from existing shopping centre owners. Warner Estates has received planning permission for a 187,000 sq ft extension to its Fishergate centre. And the new owner of the St George’s Centre, The Mall, also has plans to invest. Pinkus says St George’s needs another big anchor, which could be on the cards. John Wood, retail development director at The Mall, says its plans include some refurbishment and reconfiguration of existing shops. “By next Christmas, people will see a real difference. We’ve made a commitment to spend quite a bit of money in the city,” he adds. Additional reporting: David Quinn |
