A new generation of business parks is to make its d,but in west London, asGuinness prepares to redevelop its Park Royal brewery site. By Paul Strohm
Big schemes are afoot in the western fringes of central London – giving the boroughs ofEaling and Brent more prominence than they are accustomed to.
While plans take shape for the complete redevelopment of Wembley Stadium and theneighbouring changes which this entails, what could be among the first of a new generationof urban business parks is about to get under way in Park Royal.
Firstcentral is being billed as “the international business park for London”.Labelled a “mid-urban” scheme, it is being developed by London & RegionalProperties and Guinness, owner of the 24.3ha (60 acre) site next to Hanger Lane and theNorth Circular.
Outline consent has been granted for 116,100m2 (1.25m sq ft) of commercial officespace, including the 17,372m2 (187,000 sq ft) first phase that Guinness will occupy as itsnew world headquarters.
Work is expected to start later this year and Guinness should be in occupation in 2001.The whole scheme should be finished in 2007.
Firstcentral grew out of the need to rehouse Guinness workers based in older officespace within the Park Royal brewery. However, as London & Regional Properties directorSteven Rogers explains, because the site is not in an established office environment,merely providing the space Guinness needed would not have created enough critical mass togenerate a high enough investment value.
The base rent is likely to be set at around £270 per m2 (mid-£20s per sq ft) andthere are no plans for speculative development.
Plans also include improvements to the public transport infrastructure – likely to costaround £30m, with £12m provided through a single regeneration budget grant. A key to thescheme is the creation of a new road connecting Park Royal and the A40. This plan hasattracted SRB funding because it will also help with the regeneration of the Park Royalindustrial estate.
According to George Glennie of Gerald Eve, demand for space has been encouraged bymajor investment. But, comments Glennie: “Park Royal would certainly benefit frombetter access to the A40 and the Guinness proposals may address this.”
Rationalisation by major corporates such as Guinness has also helped maintain a supplyof new stock.
“The release of brownfield sites has been critical in providing large developmentsites in the north-west London market, and has formed the backbone of the area’sresurgence,” says Giles Thomas of Strutt & Parker.
Apart from the Guinness land, brownfield sites include the former Heinz factory atStonebridge Park, which became Premier Park. A former 5.5ha (13.5 acre) NFC goods yard inCoronation Road was redeveloped by Helios Properties and Schroder Exempt Property UnitTrust as Matrix. This 23,225m2 (250,000 sq ft) development began with 9,290m2 (100,000 sqft), which is now 50% let to two occupiers, with a further 35% in solicitors’ hands.
There are plans for a further speculative building of 2,787m2 (30,000 sq ft) that willbe available in the first quarter of 2000. A further phase was allocated for largerdesign-and-build projects. The French Croissant Co took a prelet on a 6,410m2 (69,000 sqft) factory and the remainder was prelet to Exodus, a US internet company.
Two-phase redevelopment
The redevelopment of Powergen’s site in Chase Road is the next significant scheme.Called Powergate and being developed by Chancerygate and Standard Life Investments, thesite will be developed in two phases, providing 29,264m2 (315,000 sq ft).
Smaller units are in demand too, and Chancerygate has completed Central Business Park,a scheme of 25 two-storey units close to Middlesex Hospital. Mike Walker of Mills &Wood, joint agent with Alexander Johnson, says that freehold deals are being done and heanticipates “strong demand, given where interest rates are at the moment”.
Chancerygate has developed 55,740m2 (600,000 sq ft) in four years, the same amountagain is under construction and additional units are planned.
Brixton Estate is also active in Park Royal and Acton and has developed a range ofunits on its Westway and Acton Park Estates. Andrew Harding of King Sturge says thatdemand for space emanates from a range of sectors. “It is a mish-mash, as you wouldexpect in Park Royal.”
Demand is also strong for secondhand units, according to Walker, who says that 1970sproperty of 465-929m2 (5,000-10,000 sq ft) is fetching £75-£86 per m2 (£7-£8 per sqft) whereas, a year ago, it would make only £70 per m2 (£6.50 per sq ft).
Consequently, investment prices are keen. “Yields have tumbled,” says Mills&Wood’s Walker. “They are about 8% these days, if not lower for brand-new stuff.If a decent unit came along it would certainly be under 7%.”
Walker says that the last site sold was the 1ha (2.5 acres) in Cumberland Avenue withplanning consent for 5,110m2 (55,000 sq ft), which was bought this summer by Chancery Gateand Guardian for £2.2m per ha (£900,000 per acre).
George Glennie of Gerald Eve says: “It is difficult to identify any site above 1acre that will be brought forward for development within a year. But long-termredevelopment of 1930s to 1950s stock will continue as buildings become economicallyobsolete.”
However, other developments are in the pipeline. These include Boultbee Land andSchroder’s 7,618m2 (82,000 sq ft) Falcon Park, opposite Neasden tube station, which willbe ready in September. Walker is quoting £94 per m2 (£8.75 per sq ft), with smallerunits at £102 per m2 (£9.50 per sq ft).
One fillip for the area came with the mid-July announcement by Trade & IndustrySecretary Stephen Byers that the Park Royal Regional Selective Assistance Area would beenlarged. Grants will be available from January 2000, subject to EU ratification.
Meanwhile, Ealing continues to draw businesses of all kinds. “The office marketattracts large companies that want easy access to central London without paying highrents,” says Longford Estates director Dominic David.
In particular, demand for serviced office space is strong and David says that theLongford Business Centre on Uxbridge Road is running at 90% capacity. “My concern forthe area is a lack of suitable hotel accommodation for business people,” he says.
WembleyHeading down a new road
The development of the new £475m Wembley Stadium, the designs for which wererevealed in July, is vital to the regeneration of the Wembley area, according to Brentcouncil.
Wembley town centre is part of an SRB programme that includes £15.22m to unlock thepotential of the run-down Wembley Park Industrial Estate. About two-thirds of the budgetis to be spent on improving access to and from the industrial estate, improving the estateitself and marketing vacant sites.
The new stadium proposals will be the catalyst for a series of transport improvements.These include the separation of stadium traffic from that generated by the industrialestate and new, direct access to the stadium from the North Circular.
A full planning application for the new stadium is expected to be submitted in Octoberand Brent council has timetabled a decision for March 2000. Demolition should commencenext summer and the new stadium should be complete by May 2003.
