Extensive cosmetic surgery does not come cheap. In Luton’s case, it will cost £7.5bn, albeit over the next 25 years. But this will be no nip-and-tuck job. The council plans a comprehensive facelift for the town centre, transportation links and public spaces – adding offices, hotels, retail and residential (see box) to give the area back its identity.
History has not been kind to Luton. The town, best known for the Vauxhall car factory and its subsequent demise, is now better known for cheap flights, those white vans and terror raids. To add insult to injury, it topped the “crap town” charts in 2004.
“It is often a joke that Luton looks like a northern town in the middle of the Chilterns,” says Colin Chick, Luton council’s head of regeneration and the environment. “We had a very heavy manufacturing base right up to the 1980s. But, like a northern industrial town, it collapsed.”
Chick adds that the final straw was the closure of Vauxhall. When it shut its 97-year old plant in 2003, the town had been enjoying its lowest-ever levels of inflation and unemployment – with the latter just 2.8%.
The government immediately revised its predictions, expecting unemployment to rocket to 5.2%. However, Chick says, a combination of hard work and the growth of London Luton Airport kept levels at 3.5%.
The council is now keen to expand the employment base. Two projects could help realise this wish -Napier Park, a £400m redevelopment of the former Vauxhall site, and the 85-acre Butterfield Business and Technology Park, on the outskirts of the town.
The need for such schemes is unquestionable. Luton’s prime office accommodation, Pillar Property’s and Haslemere Estates’ 86.5-acre Capability Green, is almost fully let.
That has led to a shortage of good-quality stock, says Lloyd Spencer, head of Lambert Smith Hampton’s Luton office. “There are one or two smaller units but nothing that caters for the larger corporate occupiers. If there was, then it is entirely possible that another BAe deal – where the company took a 220,000 sq ft prelet on Capability Green in 2004 – would come along.”
That would help push rents up from £20 per sq ft for good-quality space.
Simon Glenn at Savills says: “There is definitely a lack of product on the market, so both Napier Park and Butterfield could cash in.”
Plans for Napier Park are now in the hands of Southside & City Developments, a joint venture between Explore Investments – the commercial development arm of Laing O’Rourke – and URUK.
The jv submitted an application in July and is waiting to hear if the ODPM will call in the plans. The scheme includes 580,000 sq ft of offices and industrial space and 80,000 sq ft of retail, as well as a five-star hotel and 1,000 homes.
Uncertainty about the government’s Gambling Bill pushed the jv to submit two alternatives in its application – one with a casino and 80,000 sq ft of bulky goods retail and the other with a conference centre and 100,000 sq ft of bulky goods. Physically, the town will not see any signs of improvement for another five years, but the psychological effects will be huge. Tony Polgrave, development director at Southside & City Developments, admits the Napier site is politically sensitive. “We are keen to keep employment use on the site. We are offering an urban environment. Butterfield is much more hi-tech.” He says a model of the plans unveiled late last year was “very well received.”
The topography of the site will pose problems. The site undulates by 140 feet – equivalent to a 15-storey building. The south side will house employment uses, says Polgrave, and residential will sit on the more heavily sloped north side. Construction, however, will begin with a residential plot on the only flat section of the land.
Despite this, Polgrave sees the office element as the biggest challenge. “It is the biggest risk and we’ve got to look at it with a sense of realism,” he says. Polgrave believes demand is out there, as demonstrated by Capability Green. But he adds: “We are cautious, and we haven’t decided if we will prelet or speculatively build it yet.”
Easter Group, the force behind Butterfield, has none of that reserve. The £250m park will provide up to 1m sq ft of low-density development. The speculative phase one, the business village, will be ready for occupation in December – just one month after completion of the council’s adjoining Innovation & Business Base (IBB).
The East of England Development Agency handed over ownership of the land, and £14m of funding, to the IBB in November last year. With units starting at 150 sq ft, the IBB will complement Easter Group’s plans, Chick says.
He adds: “Initially, there was a bit of a problem with Easter Group going in strongly for the start-up and innovation market, which would have put us in direct competition. But it has altered its philosophy now.”
Michael Forster, director at Easter Group, says the Butterfield park will provide a next-step facility for occupants of the IBB.
Four buildings totalling 45,000 sq ft will be built in the first phase at Butterfield, as well as a facilities and management centre. The group plans a 10-year build programme of about 100,000 sq ft pa, although Forster adds: “All we need is a couple of prelets and that could come along quicker.”
Within six months, Forster hopes to have the first letting in place at £20 per sq ft. “We are not going to go mad in the first phase, we need to be flexible,” he says. But his outlook remains bullish. “There are no new buildings in Luton, and the town centre is not particularly nice. Those companies in old buildings will now have the opportunity to move into a bespoke building.
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Offices ● Rents; out-of-town, new space, £19 per sq ft ● Out-of-town, second-hand, £17.75 per sq ft ● Town centre, new space, £12 per sq ft ● Availability: six buildings totalling more than 120,000 sq ft ● Take-up: by November last year, occupiers took 97,500 sq ft compared with 154,00 sq ft in 2004, although the latter was boosted by the BAe deal ● Investment: a total of three transactions last year worth £50.7m. The largest was the sale of 400/450/475 Capability Green for £19.5m. The 15-year-old building had a 12 years unexpired lease to Ernst & Young, Seaton Scholl and Siemens Corporation ● Freehold capital values out-of-town, £250 per sq ft Source: Lambert Smith Hampton |
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Butterfield ● £250m 85-acre business and technology park ● Easter Group plans 1m sq ft of low-density development in three zones ● Separately, Luton council in November received ownership of the site for an Innovation & Business Base (IBB) and £14m of funding site from EEDA. Council plans a £18.5m development with 100 units, with completion scheduled for July 2006 The East Luton Corridor ● A £22m improvement scheme looking at upgrades to Airport Way between Capability Green and Vauxhall Way, including a link to Percival Way roundabout. Start on site April 2006. Completion scheduled for March 2008 London Luton Airport ● Government white paper last year approved growth to 31m passengers pa. Masterplan for growth will be submitted at the end of this month (see p98) Luton Dunstable Translink ● A 7.5-mile guided bus way linking Dunstable, Luton town centre and Luton airport ● Inspector’s report due back March 2006 with completion set for spring 2009 Luton Spatial Strategy ● Part of the Milton Keynes & South Midlands Sub regional strategy ● Delivery of 25,000 homes by 2021 and 45,000 by 2031 ● Joint committee set up in October to create a planning framework Marsh Farm ● £48m New Deal for Communities Programme ● Masterplan started in September 2004, and final report due in October 2005 Town-centre development framework ● Improvements to eight town-centre zones ● Refurbishment of St George’s Square. Funding worth £2m already secured, with completion set for August 2006 ● Facelift for the existing bus and railway station ● Power Court — Ballymore has submitted plans for a £200m redevelopment of the Power Court industrial estate, creating 538,000 sq ft of retail and 250 apartments ● Reshaping of Bury Park with a £2.1m improvements covering traffic flow and urban environment Vauxhall site ● Southside & City Developments submitted a planning application in the second half of last year ● The £400m plans for Napier Park, as it willbe called, will feature 484,000 sq ft of offices,a 200-bedroom hotel and 1,000 homes ● The IBC vehicles plant and its 2,700 jobs will remain ● Remediation of the site will continue over the next 12 months |
