Clouds over LandMarc While questions remain about the former Marconi site, the town’s Beaulieu Park scheme looks set to go ahead. By Karen Day
When Ashwell Property Group collapsed at the end of last year, it took with it one of Chelmsford’s largest and most ambitious regeneration plans.
Sven Topel, former director of Ashwell, announced almost immediately that he would take on all of the group’s staff and employ them to form Brookgate. A number of the failed developer’s projects would also be brought in.
Conspicuous by its absence, however, was LandMarc, Ashwell’s ambitious scheme on the 14.6-acre former Marconi factory site in Chelmsford.
Local agents are sceptical about its future. Planning permission for a 320,000 sq ft commercial quarter and 715 homes was granted in November 2008. Ashwell had borrowed an initial £30m from Icelandic bank Kaupthing Singer & Friedlander but had failed to secure further funding to take the project forward.
They maintain that the scheme, as it stands, is a poor fit for Chelmsford, with too much space for offices, not enough for flats, and too few parking spaces for its town centre location.
Assets converted
Ashwell collapsed in December with pretax losses of £116m. Parts of its assets were converted from debt to equity in a deal with Lloyds Banking Group, but LandMarc remains under the auspices of administrator Ernst & Young.
Clearly, LandMarc’s future had been uncertain for some time; E&Y had been in negotiations with Ashwell since Kaupthing’s crash in 2008.
In November, the administrator appointed Zolfo Cooper LPA receiver after the failure of talks with Ashwell about “consensual restructuring”. The receiver now has control over the site, and E&Y is searching for a property adviser to work with it to “maximise the bank’s recovery”.
E&Y confirms that it does have the authority to sell the site and, with the property market starting to recover, and Kaupthing’s moratorium on its debt repayments up in August, the site could be on the market again soon.
Stuart Mowle, head of Lambert Smith Hampton’s Chelmsford office, says that the former Marconi site remains viable but feels that it needs more residential property and less commercial space. “There is still high demand for housing in Chelmsford, and the site is in a good location,” he says. “It should get there eventually.”
Meanwhile, Countryside Zest, a jv between Countryside Properties and London & Quadrant, has submitted outline planning permission for a £1bn extension to a 615-home development at Beaulieu Park in the north-east corner of Chelmsford – one of the most extensive proposals for the town and the one most favoured by local agents.
The proposal, on a 604-acre site, includes 4,000 homes and 750,000 sq ft of commercial space comprising a 500,000 sq ft business park and a railway station on the East Anglian mainline. A bypass, relief road, secondary school, shops and health facilities are also included.
The developer describes Beaulieu Park as the creation of a community that has been on its drawing board for nearly a decade. John Oldham, director and chief town planner at Countryside Properties, says that the jv plans to start the 12-year programme of work in 2012.
During that time, he says: “You go through a couple of economic cycles, and you have to take the rough with the smooth.”
As a jv, both Countryside and L&Q have access to separate lending, and the latter will be responsible for financing the development of 1,400 affordable homes.
The next two years are expected to be taken up with the planning process, including a public examination of Chelmsford council’s area action plan, of which Beaulieu Park is a key part.
Oldham says that, after several years of dovetailing the development with the council’s ambitions, Beaulieu Park has been included in Chelmsford’s statutory plan. “That was a major hurdle to overcome,” he says. “Now it’s in the statutory plan, it’s not going away. Whoever comes into power at the general election, it will stay.”
Subject to planning permission, the first 1,000 homes will be constructed to the north-west of the site, at White Hart Lane and Essex Regiment Way. However, because of the timescales involved, the scheme’s backers are unwilling to speculate on where prices might be or what returns these might offer when the homes come to the market.
Countryside Zest also expects to start at the west of the site with a relief road, which will include bridge works. In addition, the jv has submitted a proposal for the railway station, on which it plans to begin work in 2013.
Key component
The commercial side of the development, including the business park, depends on the railway station’s completion, since rail access will be a key component of the offer. The jv plans to exploit the scheme’s location and the availability of skilled workers to lure back-office relocations from the City and Canary Wharf.
“There is some integration with Canary Wharf since employees there already commute from Chelmsford into Fenchurch Street,” says Oldham.
Separate planning permission is being sought for this element of the scheme, and a submission is expected shortly. Work should start in 2013, with completion scheduled for two years later, although Oldham says that, once the jv has planning permission, it will review the market so as to decide whether to build speculatively. Marketing of the properties will start only once construction of the station has begun.
Local agents can see the merits of Countryside’s plans, and many in the town consider Beaulieu Park a well-planned scheme. LSH’s Mowle says that, despite traditionally low demand for commercial property in the town, he can see the scheme being successful over time.
“Chelmsford does need more industrial and commercial space, and has always lagged behind towns such as Basildon,” he says. “But Countryside Zest will need to attract a big, high-profile operator to bring in the smaller occupiers, as Southend did with RBS.”
