The first time Snow Hill was marketed as a regeneration opportunity, Dexy’s Midnight Runners topped the charts, the Bullring was still a concrete jungle, and what would become Brindleyplace was better known for being a semi-derelict industrial wilderness.
While much of Birmingham is now unrecognisable from those days in the early 1980s, one 4-acre patch of land next to Snow Hill station offers a troubling piece of nostalgia.
The site has had a chequered past. Turned into a car park in the early 1980s – envisaged as a short-term measure prior to imminent redevelopment – the spot has survived half-a-dozen attempts by the council to market it, fallen in and out of the hands of five developers, and lived through the rise and fall of Railtrack.
Nearly 30 years on, activity on the site, now in the hands of Ballymore, is at last happening, and the Irish developer is offering the first tantalising glimpse of a planned £200m facelift.
Standing overlooking the sea of grey concrete that is currently Snow Hill, Ballymore project director Richard Probert is candid about the site’s present state. “Snow Hill is, frankly, a disgrace,” he concedes. Raising his voice against the incessant rush of traffic down Snow Hill Queensway, he states: “It is a horrible environment at the moment, but imitation is the sincerest form of flattery and we want this to be the Brindleyplace of the city centre.”
Ballymore acquired Snow Hill in early 2003 from Hammerson, as part of a portfolio of seven Railtrack Developments properties. Since then, it has been locked in negotiations with Centro (the West Midlands Passenger Transport Executive), Network Rail and Birmingham city council.
Now, with a legal agreement signed, including what Probert calls a “hugely onerous” section 106 agreement, Ballymore is keen to crack on with its plans. The site already has outline planning permission, and Ballymore is ready to seek approval of its new masterplan and expects to submit a reserved matters application imminently.
Enabling works applications have already been served for the first phase of the scheme.
Around 800,000 sq ft of office, retail and leisure space, as well as 200 residential apartments, will be housed on the land. The development will have an end value of £400m.
The site slopes down from street level at Colmore Row to St Chad’s Roundabout. Ballymore plans to overcome this topography by building a viaduct that will create a seamless link to Colmore Circus and bring the entire development up to the current street level.
Mirror development
A 250,000 sq ft office building will face onto Colmore Circus. Moving from front to back of the site, a second 250,000 sq ft office building will mirror the first and, behind this, a residential block and a 220-bed, three- or four-star hotel will sit at the northern edge of the site. As much as 50,000 sq ft of retail and leisure will sit at street level.
The Metro extension running through the city to Edgbaston will run along the site’s border with Snow Hill station. Development will progress regardless of the timescales for the Metro, says Probert. “The site is already served by a tram stop at Snow Hill station,” he adds. “If the Metro extension doesn’t happen, then we will just have an extra-wide boulevard at street level. It won’t affect the project.”
Political will is definitely pushing for the whole project to come together seamlessly. Ken Hardeman, cabinet member for regeneration at Birmingham city council, believes that Snow Hill is a key component of the city jigsaw. “When I took this project on 18 months ago,” he says, “there were two or three principal locations that I was determined to move on. Snow Hill was one of them. I can’t overemphasise the importance of the location. I just want it to happen.”
Its regeneration is also vital for Hardeman’s longer-term vision for the city. “I can now think about opening up the Jewellery Quarter and the link between Centenary Square into Summer Hill, and work on Great Charles Street,” Hardeman says.
Along Snow Hill Queensway, subways will be filled in, traffic lights installed and the six-lane road that tears along the eastern edge of the site will be calmed, replaced with two lanes into the city and one out. The roundabout at St Chad’s Circus will be bulldozed and remodelled, with steps from street level linking to St Chad’s Cathedral, and creating access to the Gun and Jewellery Quarters.
Hopes are that a prelet will kickstart phase one, a flagship Sidell Gibson-designed 12-storey office building with 20,000 sq ft floorplates. It has been widely rumoured that Ballymore will land KPMG’s 120,000 sq ft requirement in the city centre, a belief fuelled by the developer’s purchase of KPMG’s existing HQ at Cornwall Street at the start of the year. Probert remains tight-lipped about the prospect of the accountant signing up, saying: “While we are doing our level best to secure a prelet, we will build speculatively, and the first building will be there in 2008.”
The mix on the site is something Ballymore has spent time assessing. Probert admits it would have been far safer to put in 125,000 sq ft or even 175,000 sq ft of offices. “But,” he says, “quite frankly, the site doesn’t lend itself to it – and we need to be bold.”
Similarly for the residential component of the site, with current demand, placing offices along the length of the site would arguably have made more commercial sense. Office rents targeted at £30 per sq ft place capital values at around £600 per sq ft, explains Probert. Residential values are nearer to £400 per sq ft, although he admits it is far cheaper to build residential space.
“The planners would have been quite happy to put offices along the whole site,” he says, “but, without residential, we would have lost some of the vibrancy.”
Construction timetable
As a result, work on the Glenn Howells-designed residential units at St Chads will start in 2007.
A decision will be made in mid-2007 on office building two and, if letting is progressing well on office building one by the time construction of the podium reaches the site of building two, Ballymore may roll out the second. “It would be stupid not to have a conveyer belt of space,” Probert adds.
Ballymore’s construction timetable may place Snow Hill in direct competition with a number of other sites in the pipeline.
The Cube will provide 200,000 sq ft of offices in the second phase of the Mailbox (see p12). This should complete in 2008, along with 500,000 sq ft at Arena Central. Likewise, Masshouse Developments is set to place 66,000 sq ft of offices on the market ready for occupation by Christmas 2007, and Saxan Securities’ Peat House will deliver a 120,000 sq ft glass-clad office block.
Pipping them all to the post is Baskerville House, with 200,000 sq ft of offices planned for the end of this year.
Probert dismisses these competitors. The Mailbox and Arena Central is mainly leisure-driven, he says.
Not so easily dismissed is Abstract Land’s Colmore Plaza, which will deliver 300,000 sq ft – in identical floorplate sizes and for an identical rent – to the market next year. It is also reported to be Ballymore’s closest contender for the KPMG prelet.
Probert concedes that the schemes are like “two peas in a pod in terms of location” but he argues that the offer is very different. “For a start,” he says, “architecturally, they have a very slab-fronted building. I’m sure that will suit a lot of occupiers but, if you are a leading-edge professional services company, then you must be in a leading-edge building.”
Unwilling to draw parallels
Abstract Land director James Howarth dismises this advantage of mixed use. He says: “The reality is, we are right in the middle of the town centre, we are 30 seconds from the shops, minutes from the Bullring – mixed use in the core doesn’t hold up.”
He is, however, unwilling to draw parallels between the schemes, simply stating: “We will be delivering in autumn 2007. Everyone else can talk about the competition. The first tower cranes arrived over the site at the start of the year, which dispels any talk about whether we are moving ahead.”
What Howarth is too diplomatic to call into question is whether others can say the same, something that is not lost on Ballymore.
Given that it has taken a year from agreeing on a land deal with the council to getting a cabinet decision, it would be easy for Probert to be impolite about the council; he isn’t.
“Let’s just say that where we wanted to go and where the city wanted to go were not necessarily in the same direction,” he says. “It did its best, the planners have been pragmatic, but the council is under-resourced and the city spent a long time without a CEO.”
The council itself offers no excuses for the delay. Says Hardeman: “I can’t be held responsible for delays more than 18 months ago, but since then I’ve prioritised it. We needed to get the right mix of development that allowed Ballymore to get a return on investment, but it was important to keep the city’s interest.”
Hardeman adds that the site, by its nature, created problems, but the single biggest issue concerned transportation. “We couldn’t take a planning application in without dealing with those problems, and we deliberately exhausted all the alternatives at consultation,” says Hardeman. “We needed to get the balance right. We didn’t want to make a quick decision and be cursing it in the future.”
One thing now seems certain: Snow Hill at last seems to be on a roll.
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Ballymore will hold Snow Hill as an investment once the development is complete. The Irish developer says it is keen to preserve the quality of the estate and, as a result, will retain it. This will also serve its strategy to build up a portfolio of UK properties. The decision on Snow Hill is in line with its plans for the other Railtrack Developments sites acquired from Hammerson, says Ray Hardy, Ballymore’s investment director. “The intention at present is to hold the sites to add to our portfolio of investment properties in the UK,” he says. “We’re finding it more lucrative to develop our own properties rather than source them in the marketplace.” Given the current investment environment, the temptation to sell is huge, says Richard Probert, Ballymore’s project director in Birmingham. For example, there has been massive investor interest in the residential element of the scheme, and Ballymore says it may respond by intensifying development on these parts. “But we don’t want to have that discussion at the moment,” says Probert. |
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1983 Birmingham city council grants a 153-year lease to Railtrack for the Snow Hill site 1987 A rebuilt Snow Hill station reopens. The site next to the station is used as a car park in the short term 1988 British Rail property board and Birmingham city council invite tenders for the Snow Hill site, after an option held by Viking Property Group for its Snow Hill phase three lapses at the beginning of the year 1989 Speyhawk beats three other developers to lead the scheme 1990 Planning permission is granted for the 475,000 sq ft first phase of the Snow Hill scheme 1993 Speyhawk collapses, leaving the site’s future in doubt 1995 The council and British Rail once more shortlist four developers. Five months later, London & Regional is given the nod to develop the site. It plans a mini-Broadgate, with an end value of £150m 1997 EG reports local agents’ doubts about the sale to London & Regional 1999 The site is once more back on the market 2000 Railtrack begins a search for joint-venture partner for Snow Hill site 2001 RBS shortlists Snow Hill for its 350,000 sq ft requirement — it later signs at Brindleyplace July 2002 Snow Hill goes on the market as one of24 sites in a £32.9m Railtrack Group portfolio December 2002 Hammerson scoops Railtrack Developments and agrees to sell seven sites, including Snow Hill, to Ballymore August 2003 Plans for redevelopment of the site gain approval of Birmingham city council 2005 Ballymore and Birmingham city council agree to a land swap, with the council handing over one lane of Queensway ring road to the developer in exchange for a parcel of land |
