Express Park
Bridgwater. Not a name that conjures up images of office parks. But, in 1998, the Anglo-Dutch property group Express Park took a risk. It ploughed £42m into developing offices and industrial space on a 105-acre site in the Somerset town labelled an “industrial backwater” by agents.
The company, set up to enable Dutch investment funds to be used for the purchase and development of sites in the UK, deliberately chose Bridgwater for its first major UK development for a number of reasons, explains Suzanne Pugh, acquisitions and development director for Express Park. “On a strategic level, we wanted the scheme to be highly accessible and it’s just off the motorway between Bristol and Exeter,” she says.
As a result of the group’s investment, 1,800 industrial jobs and 800 office jobs have been created at what is called Express Park Bridgwater, says Geoff Revell, director of developments for Express Park South West.
Express Park has succeeded in creating a new office market in Bridgwater, says Jeremy Brookes, partner at GVA Grimley in Bristol. “What they have done at Bridgwater is unbelievable,” he says. “Everyone asked ‘why do you want build offices there?’ Bridgwater has never been an office location and Geoff transformed it into one that far down the M5.”
Express Park built 54,000 sq ft of speculative office space to attract occupiers to Bridgwater, says Revell. “Obviously, to attract office users, you have to build speculatively.”
The risk paid off and this space is now fully let to tenants such as O2, Somerset primary care trust and NHS University. Office rents achieved have been in the region of £12 per sq ft, which compares with £14 per sq ft in Taunton and £19 per sq ft in South Bristol.
Express Park addressed the lack of facilities at Bridgwater by putting in the Exchange building, which provides serviced offices, plus a health club, day nursery, brasserie and conference facilities.
It is not all office space. In total, 1.5m sq ft of industrial space has been let at the site. Significant transactions include a 750,000 sq ft distribution and food production unit for Gerber Foods, and a 100,000 sq ft distribution unit for Interpet.
Revell has been spurred on by Express Park’s success so far and is looking at further opportunities in the South West and on the south coast.
“One particular type of opportunity that we’re looking at is an area that has been overlooked or considered by some to be secondary,” he explains. “We’re keen to hold the freehold on investments and tend to work within our own resources. But we would consider a joint venture with a local authority if that came up.”
The group’s modus operandi is very much about developing regional offices based on a large investment in each region, explains Pugh. “We are looking at 20- to 100-acre mixed-use developments. Some of them may be business park developments and others purely mixed-use schemes where you may have leisure and retail. We are also looking at larger edge-of-town locations and town-centre operations.”
Express Park’s directors are determined that the firm will be around for a long time. “We are in for the long haul,” says Pugh. “We are not developer-traders and a lot of developers don’t take that view.”
Summerfield Developments
It has been a busy 12 months for Summerfield Developments, which has its roots in a family construction firm active in the Taunton area since 1823. The developer has sold about 175,000 sq ft of offices in its three major office parks in the South West: Blackbrook in Taunton; Woodwater Park, Exeter; and Turnpike business park in Chippenham. It has also completed Chelston business park, which is primarily industrial, with 86,000 sq ft of phase 2 sold or in solicitors’ hands since its launch in 2003.
More recently, the office park specialist has won the contract to develop the site for the South West fire control and rescue centre on three acres at Blackbrook.
Work on the site will begin in 2006, says Richard Lloyd, chief executive of Summerfield Developments and a former King Sturge man. “This is one of our most prestigious deals and a major coup for us,” he says. The planning application for the fire control and rescue centre is being considered by the local authority.
This is a significant addition to Blackbrook, which has secured tenants such as Barclays Bank, National Westminster Bank and Holiday Inn Express since its inception in 1990.
Lloyd admits that the office market dipped considerably in the mid-1990s when demand slackened for offices. But the developer was keen to keep Blackbrook as a pure office park during those tough times.
“Even when the market was slow, we’ve had a steady take-up. We never sat twiddling our thumbs and kept rents up to a reasonable level from a development point of view. Also, we didn’t suffer from the downward spiral that Exeter had in the mid-1990s. Since 1997, the market has started to improve.”
Core business office parks
Currently, Summerfield has development land for up to 100,000 sq ft at Weston-super-Mare, adjacent to junction 21 of the M5. There are plans for offices from 6,000 sq ft to 50,000 sq ft. The smaller spaces will be built speculatively, with larger units being design and build.
But Summerfield is not confined to office and industrial business parks along the M4/M5 corridor. It recently let a 26,000 sq ft property in central Bristol to a government department, but the terms of the lease are confidential. It has also undertaken high-street retail refurbishments in Worcester and Lowescroft (CHECK).
The core part of its business is as office park specialists, says Lloyd. “We focus on direct development in the South West, so we like office and industrial business parks to be one-and-a-half hour’s drive from Taunton.”
Jeremy Hughes, director at Atisreal in Bristol, says Summerfield is an established player in the South West market. “They have a good reputation for performing and are a very strong company,” he says.
Although Summerfield’s focus remains on providing office and industrial space, Lloyd does not rule out town- and city- centre schemes in Bristol and Exeter in the future. “There may be less emphasis on out-of-town business parks,” he hinted. Aside from its industrial and office businesses, Summerfield also manages £20m of investment property in the South West.
Cubex Land
September this year marked the first anniversary of Cubex Land, which was formed by three former AWG directors from the region. For Peter Walford, one of the directors of Cubex Land, the first year of business has exceeded his expectations.
“When you launch, you never know how you are going to be received,” he reflects. “But we have been made very welcome by the market and we are perceived as a potential new client for a lot of agents out there.”
Earlier this year, Cubex Land made its first major acquisition, the 23-acre site known as Bath business park, on the A367.
Cubex, which sees itself as a trader-developer, purchased the greenfield site in July this year from Mercedes Benz, which retains a 2.25-acre dealership showroom on the site.
Cubex has 15 acres of net development land, says Peter Walford, director for Cubex land. “We are about to submit planning applications on two sizeable plots, for two-and-a-half and three acres, to provide 80,000 sq ft of mixed employment land,” he says. “There will be a mix of speculative development and prelets for offices.”
A hotel, pub and light industrial space is also planned for the business park. Construction is expected to start by the end of the year, subject to planning permission.
David Skinner, chairman of CBRE South West, thinks that Cubex has made a smart move in acquiring the Bath business park. “Bath is not renowned for office parks. People who would have wanted to set up in Bath often can’t, as space isn’t available and the council is never easy. The opportunities have not always been there,” he says.
“If you look at the commercial property cycle, now is a good time to be looking at Bath where there is an inherent demand from people who want to develop that side of Bath.”
£90m joint venture with Somerfield
Another significant milestone in Cubex’s development has been the recent acquisition of 24 petrol filling stations from Texaco across the South West and south Wales.
The acquisition, in collaboration with Palmer Capital Partners and Cubex’s six sister companies, forms part of a £90m deal to acquire and develop 109 petrol filling stations in partnership with Somerfield stores.
Cubex and PCP have jointly invested equity with Deutsche Property Asset Management to purchase the portfolio, subject to pre-agreed 20-year leasebacks to Somerfield at geared rents with fixed uplifts, says Walford.
“This will help give us a foothold in 24 different towns across the region from St Austell to Bridgend,” he continues.
Walford is keen to point out that the company does not want to be pigeonholed as a specialist in one particular sector. “We’re happy to have mixed-use or a residential elements,” he says.
|
July 2005 Development of the 23-acre Bath business park September 2004 Launch of Cubex Land with the backing of Palmer Capital Partners. Peter Walford, Josh Roberts and Gavin Bridge are the directors, who all held senior posts at AWG developments in Bristol. |
|
2004 Express Park acquires a 285-acre mixed-used site in Dearne Valley, just to the north of Rotherham, in South Yorkshire 1998 Express Park acquires Bridgwater, the group’s first UK development 1997 Express Park Group established, with Eric Van Loo as chairman, Paul Knell as managing director and Suzanne Pugh as acquisitions and development director |
|
August 2005 Wins contract from the Office of the Deputy Prime Minister to develop the fire control and rescue centre at Blackbrook Park 1990 Blackbrook business park in Taunton developed 1987 Summerfield Developments established, with Mike Fodden as chairman, Richard Lloyd as chief executive and Mark Blackwell as company secretary |
