by Gary Richardson
When the business use class was introduced more than four years ago, there were various predictions for the future, but none envisaged the quantity and quality of the business parks now evident throughout the country. Although it is often said that the business park idea originated from America, arriving in the UK in the 1970s, the modern UK business parks have their roots firmly established in the original trading estates of the UK.
Although the Trafford Park Estate in Manchester was probably the first trading estate in the UK, it took a further quarter of a century before anything was conceived that could perhaps be classed as the business park of the era.
In the early 1920s the Slough Trading Co produced a brochure describing the new proposals for Slough as being “of the most approved modern type” where “every effort in science and industry had been brought to bear upon the estate to provide the tenants with every convenience the city can offer and all the advantages, healthy atmosphere etc, that are obtained in the heart of the country”.
Prospective tenants were seduced by many things: the availability of good communications; the Bath Road; a railway running directly through the estate offering two connections; its own power, water and steam services; a restaurant; new homes for the workers; and, later, a community centre. Many of these factors, plus single-storey buildings described as having “been excellently designed for works of various descriptions”, will be seen in brochures produced some 70 years later. There are, of course, many different forms and quality of developments that are promoted under the business park umbrella.
Today’s business park is far different from the early schemes, which consisted of relatively high-density light industrial buildings, with token landscaping and inadequate parking. We can offer little comfort to the developer who has relabelled his standard industrial estate — the single building sitting in an isolated field or, indeed, the superb office headquarters building in what will always remain a light industrial location.
A real business park consists of high-quality, low-density buildings situated in a user-friendly environment with attractive surroundings, and incorporates a variety of office users from many sectors. As Slough Estates claim in their 1920s brochure, tenants must be provided with every convenience and advantage that a town centre has to offer, for it is from there that potential tenants will have to be enticed. The principal target must be the creation of efficient workplaces situated in extensively landscaped areas, which not only reflect the company’s corporate image but also help to attract and retain the skilled staff who are vital to the company’s survival.
The provision of those amenities is of paramount importance and must not, as has perhaps been the situation in the past, be dictated by perceived demand.
It is also perhaps important to distinguish between the facilities sought by the employer as distinct from those sought by the employee. Wilson Connolly recently carried out a survey of employees working in and around their Waterside Park in Northampton. They had already earmarked a 2.79-acre site within the development for leisure purposes, and their 2,000-employee survey produced some interesting results. A newsagent came top of the pile, with a 70% requirement among employees, while just behind the newsagent came a fast-food outlet (63%), closely followed by a health club/gymnasium (57%). The newsagent and fast-food outlet came as no surprise — of those questioned only about one quarter had the use of either a canteen or shop at their premises.
With regard to employers’ requirements, the most important facility has repeatedly been found to be 24-hour security, which is still provided only on the higher quality parks. A bank, hotel, restaurant and shopping facility are also sought by employers. It is interesting that the provision of sports facilities and business services (the latter no doubt provided by the company) are not highly sought after, although they are felt to be important in creating the appropriate environment.
In order to achieve the above, business parks need to be of sufficient size to support these facilities; development coverage needs to be kept below 30%, with the building footprint being even less.
While all the above factors can be brought in to produce a pleasant and extensively landscaped setting, the immediately adjoining infrastructure, as well as the local economy, are vital elements to a successful business park.
Two-thirds of companies moving into business parks do so from the nearest large town and need to retain existing staff and recruit easily. Quick and direct access to the main road network is clearly essential, along with ample parking. Ideally, this should be on a one-to-one basis and in a decked form in order to reduce the visual impact of parking upon the overall scheme. Wilson Connolly’s survey also showed that 50% of the women questioned expressed the need for a creche.
Turning to the actual occupiers of current and future schemes, business parks are still dominated by their early supporters from the telecommunication, computer, hi-tech and research fields.
However, although 80% of business park occupiers are in the computer and hi-tech sectors, the actual function carried out on the premises is predominantly administration, followed by marketing. Research and development functions are carried out by a third of occupiers, and almost half of current occupiers have relocated their head office to a business park.
This increase in relocations, including those from the financial services and professional sectors, reinforces the general view that business parks are now growing away from their earlier heavy dependence on computer and electronics firms, and appealing to a wider market.
Surveys have shown that, while corporate image is regarded as the most important reason for relocating to a business park, cost savings come much lower on the list. Indeed, in Northampton, for example, rents being asked and achieved out of town are slightly higher than those in the town centre; a similar situation is echoed in Milton Keynes.
The Thames Valley Business Park, Speyhawk’s scheme outside Reading, is another good example of the difference in town-centre and business park rents. British Gas Exploration will be moving into their new 181,000-sq ft headquarters there in October. Although they purchased the freehold of the three buildings which will provide their new headquarters, the deal represents a premium to the rent which would have been payable in Reading town centre.
Turning to the future, according to Applied Property Research, the take-up of business park space is catching up with current supply. However, they also show that there is more than 390m sq ft in the pipeline:
It may, therefore, be concluded that only a relatively small proportion of those schemes will actually come to fruition, with the quality fourth-generation parks dominating the scene. While there is a risk in the short term that an oversupply will leave buildings vacant for some time, taking a more long-term view, past performance would suggest that the right product will always find a purchaser — all it requires is good timing.
When considering timing it is also important that a flexible phasing policy is incorporated within any scheme to ensure that, on completion of each phase, the development has a finished air. Clearly, the last thing needed by a tenant having moved to his prestigious new headquarters is to be seen to be in the middle of a building site.
With 1992 just around the corner, a greater awareness is needed of the potential competition from Europe. Although both the Japanese and Americans have, to date, favoured the UK as a base from which to serve Europe, we cannot be complacent, and it must be recognised that the centre of Europe is clearly moving eastwards.
The Europeans have not developed the business parks to the sophisticated levels that we have, and perhaps there is thus an attractive opportunity for UK developers to take advantage of this untapped market, particularly in a joint venture.
Finally, the decision on whether tenants remain in the town centre or move to out-of-town business parks is very much a case of horses for courses. Although it must be recognised that they have now become an important and integral element of the UK property market, they are only one element and there will clearly be many tenants who will relocate only to town centres.
Our surveys do, however, show that there is a high level of occupier satisfaction in the top-quality business parks and, so long as parks are able to offer quality in both product and environment, their success must be assured.
