An eye on the future: Agents in Ipswich are concerned that land values could rise sharply when the market recovers. By Stacey Meadwell
It may have come as a relief to Ipswich’s commercial agents when developer JG Land & Estates lost its appeal against a decision to refuse planning permission for its residential-led mixed-use scheme in the town.
The developer had proposed 1,100 homes, alongside 38,000 sq ft of retail, a health centre and school on the 120-acre, former British Sugar site. The high court rejected its appeal against the Department for Communities and Local Government at the end of January on the grounds that the site was allocated for employment uses in the local plan.
Although employment land is not in high demand, at least one agent is concerned about development sites not being brought forward for commercial use in time for an improvement in the market.
“Although we have a quiet market, we still have a limited supply of deliverable land,” says John Spice of Bidwells in Ipswich. “Ransomes Europark has only a small amount left, and there is not a sufficient volume of land going through planning to cater for the eventual upswing. We could see a sharp rise in land values in a short period of time. We need to be prudent to ensure Ipswich has sufficient land so that this doesn’t happen.”
Broadmeadow, as the British Sugar site is also known, could provide that land. The only other option is BT’s Adastral Park at Martlesham, which is earmarked for an Innovation Park to capitalise on the expertise on offer at BT’s 100-acre research facility, which is reportedly the second-biggest centre of its kind outside China.
David Locke Associates has drawn up a masterplan with BT for a 350-acre site. It envisages BT redeveloping and upgrading its own facilities and adding an additional 650,000 sq ft of space for hi-tech industries and R&D, plus a leisure complex, education facilities and 2,000 homes.
The plan will help diversify the local economy, which is dominated by port-related businesses from neighbouring Felixstowe. But it is a long-term project with few immediate gains.
George Bennett, development and investment manager at East of England Development Agency, says: “The masterplan has been drawn up and submitted, but it will be 12 months to two years before it goes through planning. SnOasis took four years.”
SnOasis is the £350m winter sports complex at a former cement works in Great Blakenham, which received planning permission last November.
In the short term, if an office occupier wanted to brave the recession and seek space in the town, there would be little choice, other than design-and-build opportunities at Ransomes Europark, Targetfollow’s 7,500 sq ft at 40 Princes Street, which was launched last month, or the remodelled Tolly Cobbold Brewery buildings.
Bury St Edmunds-based Pigeon Holdings, which is proposing 30,000 sq ft of offices in the Grade II-listed former brewery, has yet to submit a planning application.
“The office market was probably the slowest sector last year,” says Chris Moody, head of commercial for Savills in Ipswich. “But there are a number of indigenous professional companies looking to upgrade their office space.”
In the meantime, the shortage of office space offers some comfort to commercial agents at this difficult stage in the cycle.
Ipswich office and retail statistics
Westgate extension
It is not quite carnage on the high street, but with retailers suffering from consumers’ unwillingness to spend, and some brands succumbing to the administrators, is it the right time, even with funding, to bring forward 164,000 sq ft of retail space?
Turnstone Estates believes so. It gained planning permission at the end of last year for an extension to the Westgate centre in Ipswich. It is now seeking an anchor tenant to occupy a store of up to 128,000 sq ft in its scheme, which also includes 3,000 sq ft of A3, 11 flats and an extension of the town’s theatre. Turnstone says it would divide up the space should an anchor not materialise.
“We are having discussions with half-a-dozen retailers,” says Turnstone director Nick Scott.
Signing away a chunk of space is one thing, but securing funding is another, particularly when traditional sources of funding for development are virtually non-existent.
The developer will seek funding only once terms with a retailer have been agreed, and Scott insists that Turnstone has its own sources of private funding.
Construction is expected to take 18 months to two years, with completion pencilled in for 2011. If the building process is not rushed, the developer will have until the end of the year to sign a major tenant and source funding in order to meet its deadline.
No one disputes that Ipswich suffers from a lack of shops, and that there are a number of retailers in poor-quality space. However, it will be the economy’s performance this year that will be the deciding factor for the project.
