Exeter has a new town, science park, business park and a cathedral. Plymouth has a new town, energy park, waterfront regeneration and Tom Daley.
Despite their roots being very different, there are some similarities between the two Devon cities, at least in their aspirations. But geography and political nous have a lot to do with how quickly their dreams will be realised.
Both cities have seen regeneration projects slowed and reworked during the past five years. If this was a race to see which one is best positioned for an upturn, then the smart money would surely be on Exeter.
Take the new towns. Cranbrook, part of the East Exeter expansion that includes a business park and science park, has infrastructure in place and the first homes are being built. Sherford, outside Plymouth, is a project already 15 years in its gestation and remains green fields, although when planning was granted in March, developer Red Tree said construction could start by the end of the year.
On the commercial side, Langage Energy Park, outside Plymouth, has not only fallen victim to the recession, but the demise of the South West Regional Development Agency. Langage could accommodate 1.4m sq ft of space and has planning permission for 110,000 sq ft.
Mike Oldrieve of Vickery Holman says: “It’s the future of employment in Plymouth but it isn’t going to happen without public sector assistance for five years.”
When you look at where grade A rents are, this glum outlook is understandable. Oldrieve says headline figures for prime office space were £15 per sq ft, but in the current climate, the same space would probably fetch £10 per sq ft. It makes speculative development far from viable.
But that does not mean Plymouth’s property market has ground to a halt completely. At Millbay, the city centre’s 19.5-acre waterfront regeneration site, cranes are working on a second phase of housing, contracts have been signed with Sutton Harbour to build a marina and with Akkeron Group to redevelop the Pavilions leisure venue.
English Cities Fund, which is handling the 10 to 12-year project, is reworking the masterplan with Plymouth council to allow for easier phasing of development.
Project director Duncan Cumberland says: “Viability generally is a problem. There is a huge infrastructure bill for Millbay almost before you get into basic construction, but we think a more phased approached and introduction of water-based uses will help to create value.”
The importance of the seafront location was highlighted last year when Plymouth hosted the America’s Cup, drawing large crowds. Is this a taste of what could be?
For the council’s part, whether spurred by Exeter or not, it is looking at how best to use its own £700m assets to stimulate development and has £117m of capital projects in its spending programme.
Plymouth council also has a strategic development plan and local area plans in place and is offering “favourable” section 106 agreements for viable projects with the proviso that they start development within two years.
Chris Grace, head of economic development at Plymouth council, says: “We are not trying to be Exeter. We have our own offer and it is a good one.”
Meanwhile, an hour’s train ride east, in Exeter, a similar set of economic conditions and viability issues prevail.
The council’s director of economy and development, Karime Hassan, says not all the original plans for the East Exeter extension have survived the recession, with notable victims including big infrastructure projects such as the guided bus system. But the vision for Cranbrook, SkyPark and the science park “remains the same”, he says.
“Our mindset is that we own the problem, so we need to find solutions to unlock development. So that means heavy lifting in terms of funding.”
That heavy lifting includes regional infrastructure financing (RIF). Hassan says a TIF is desirable, but not under current criteria, whereby the government has the option to reset rateable values.
The council has also put its own money into funding infrastructure, as have its public-sector partners Devon county council and East Devon council. The trio have collectively applied for funding from the LEP to kick-start development on incubator units at the science park.
SkyPark developer St Modwen is waiting for prelets before wheeling out the cranes for its 107-acre, 1.4m sq ft office and industrial scheme. Market conditions are such that tenant interest is mainly from small- and medium-sized industrial occupiers. St Modwen’s Ian Guy expects to be building next year.
The developer’s reluctance to build speculatively is understandable. Headline rents still stand at £16.50 per sq ft – £1 shy of what would make development viable, says Ralph Collison of Alder King. Net effective rents are more like £12-£13 per sq ft, says Clare Cochrane of Vickery Holman.
Where take-up in the city will be by the end of the year compared with last year is anyone’s guess. Ask three different agents and you get three different answers. Jonathan Ling of Stratton Creber is the most optimistic, predicting that it will be up on last year, despite describing the market as “fickle”.
“Normally, what makes a headline doesn’t impact on demand, but now a headline can dry up demand,” Ling says of the recession and eurozone crisis.
In town, almost all woes can be forgotten, with John Lewis just a month away from opening its doors. But there are wider regeneration plans, too. Land Securities and the Crown Estate have signed a deal with the council to redevelop the site of the bus station and depot with 400,000 sq ft of leisure and retail and some residential.
Land Sec development director Nick Davies says: “The council is being very proactive and paying for the leisure centre on the site. The scheme wouldn’t be viable without that.”
Hassan says Exeter council is also “knocking on the door for a TIF” to help get the project off the ground.
Plymouth’s poster boy Tom Daley secured a bronze medal in the Olympics. In the regional hierarchy based on market performance, Bristol would arguably take the gold, Exeter the silver, and Plymouth, like Daley, the bronze, but plans are being made for round two, when the economy finally does pick up.
