After losing a major car plant, Luton has been surprised to win a host of new occupiers, attracted by the extra floorspace and workforce freed by the factory closure. By Noella Pio Kivlehan
When Vauxhall announced the closure of its Luton plant last year, with the loss of more than 2,000 jobs, commentators were quick to predict devastating consequences for the town’s economy – the car factory is one of the town’s biggest employers and occupies a 55-acre (22ha) site.
It was feared that the closure – which was prompted by the general decline in the car industry – would have a knock-on effect on Luton’s retail, leisure and office markets, leaving people with less money and driving away firms.
But the pessimists have been proven wrong. Far from doom and gloom, the town has an air of optimism about its future post-Vauxhall. While nobody is playing down the job losses, many see the freeing up of such a vast quantity of land as a chance to attract new developments and businesses to the area.
As Bill Brisbane of Roger Tym & Partners, who is lead consultant on the Milton Keynes and South Midlands Study – a regional assembly study – points out: “The town is heavily constrained by the green belt, and the direction in which it could grow is limited.”
Developing the Vauxhall site would allow Luton to move away from its image of heavy industry and help to bolster the retail, leisure and office markets, rather than sending them into decline.
In the short term, according to research by Lambert Smith Hampton, the closure could indeed affect the car manufacturer’s suppliers. However, says LSH’s head of research, Arezou Said: “Only 7% of suppliers to Vauxhall intend to relocate as a result of the closure. Moreover, a large proportion of occupiers lease their properties and they expect little change to their occupational status because of it.”
Richard Evans of King Sturge believes there is already evidence that more businesses are moving to the town: “Initially it was thought that the closure would have a devastating effect. But, ironically, just after it was announced we saw an increase in enquiries in Luton.”
Evans cites recent lettings at Nimbus Park and Sovereign Park as examples of the take-up. At Sovereign Park, Orange took the 30,550 sq ft Unit 4 at £6.65 per sq ft.
Extra land will act as magnet
Some agents believe that the extra land will help the town to accommodate businesses that previously had problems finding suitable space there and which might otherwise look to Watford or Milton Keynes to fulfil their needs.
“Companies looking for high-quality locations couldn’t find it in Luton, so the tendency was to move to other locations,” says Geoff Alexander of locally based agents, Alexander & Co.
“We have located companies out of the region because of this. Freeing up the land will allow major industry developers to come in, which can only enhance Luton’s location.”
As well as unlocking space, the Vauxhall closure also means that there will be the surplus workforce to meet employers’ demands. “If you look at it from an occupier’s point of view, there will be people to employ,” says Evans, adding that the area around the M1 was notorious for its lack of a good skilled workforce.
The type of company wanting to be in the area is the more hi-tech kind of business. “There’s a great deal of emphasis on attracting industries that can generate employment, like hi-tech and engineering rather than the heavy industries,” says Said.
Moving away from the heavy industries will also bring an element of regeneration to Luton.
Given the town’s location – roughly 30 miles from London, 15 miles from the M25 and 60 miles from Birmingham – it might seem surprising that regeneration could be needed. However, says Brisbane, Luton’s excessive reliance on industries such as car manufacturing has kept it from progressing. That has changed.
“Looking into the future, Luton is well placed because of its connections. It’s got a lot of positive features,” says Brisbane. These include the airport as well as the plans to improve the transport systems both to and from Luton and within the town.
London Luton International Airport, the country’s fourth-largest, is a big employer for the town – and it is set to grow. The announcement earlier this month that EasyJet – which recorded a 36.5% rise in passenger numbers in December – is planing to expand its operation can only lead to more money going into the town, especially as the company remains confident of further growth.
The proposed east-west rail link reconnecting Oxford and Cambridge will increase the Luton area’s transport potential, and tentative plans to divert traffic away from Luton town centre would help the retail market, which is already experiencing good times.
Steve Holloway of King Sturge says that demand for retail space in Luton is good. The 30-year-old, 750,000 sq ft (70,000m2) Arndale Centre is, he says, “close to being fully let, while George Street, a secondary location, is buoyant”.
Alexander sums up the general feeling in the town. “Whether you are looking at industrial or offices, or looking at attractive price advantages with a big labour supply, Luton can offer it. Overall, I feel very positive about the next five years.”
Bedford
Revival of fortunes
Bedford is undergoing something of a renaissance, according to Richard Last of Lambert Smith Hampton. “People are discovering the benefits of the area,” he says.
In Last’s view, among Bedford’s biggest assets are its proximity to London, its low rents – big buildings are usually under £5 per sq ft – and a wage base that is lower than that of surrounding areas.
The town also has good transport links. The A421 – the primary trunk road in the Eastern region – connects the A1 to the M1. The Clapham bypass to the north of Bedford is under construction and the Great Barford bypass to the east of the town is scheduled in the government’s road programme.
The sector to watch in Bedford is industrial, according to Last. There have been several recent developments in this sector. “The biggest site is the 138-acre Marsh Leys development at Kempston, where Asda has taken 360,000 sq ft,” he says.
Other recent industrial developments include Wrenbridge’s Progress Park scheme, at the intersection of the A6 and A421 Bedford Southern bypass.
St Modwen announced plans earlier this month for a £4m expansion at Cranfield Technology Park, in west Bedfordshire, adjacent to the M1. The company also plans to upgrade the existing 15,200 sq ft (1,410m2) Innovation Centre, which it is buying from Mid-Bedfordshire district council.
Simon Estates has proposed a mixed-use development at Cardington Cross, to include a racquet club, hotel and other mixed-use schemes. The scheme had been given planning consent by the local authority but has been called in by the Secretary of State as it appears to be contrary to the local plan.
