Although the bypass has grabbed all the headlines, there are plenty of other plans for the development of Newbury. But, asks Paul Strohm, when will they bear fruit?
Newbury’s long-awaited Parkway shopping development appears to be one step closer to a start following Hammerson’s emergence as partner for local developer Highcross. Although the scheme already has consent of sorts, it is not clear if, when, and in what form, the project will go ahead.
Highcross demurely confirms that it has “agreed to co-operate with Hammerson in pursuing a possible town-centre retail development”. Hammerson is equally coy and the agreement is shrouded in confidentiality clauses.
The prime retail area is Northbrook Street and the topography of the town – including the presence of the River Kennet and a number of listed buildings – has kept the pitch tight and the town, arguably, undershopped. Northbrook Street zone A rents peak at about £1,076 per m2 (£100 per sq ft) close to Marks & Spencer.
Three years ago Highcross won approval from the council for a 10,061m2 (108,000 sq ft) shopping development, subject to a legal agreement which still awaits completion. The scheme was then to include 1,500m2 (16,146 sq ft) of offices and a five-storey car park and included land owned by Chartwell to the rear of Woolworths.
Development of the site, which is sandwiched between the rear of Northbrook Street and Victoria Park and massed behind Marks & Spencer, was first mooted in 1986 when Fletcher King prepared a report. In 1988 Chesterton produced a further study and Newbury district council subsequently issued a development brief. But the recession frustrated development.
Although the outstanding legal agreement concerns phasing of the development, road improvements and pavement widening, a council spokesman says that a full review of the application would now be necessary in the light of changes to Berkshire’s structure plan – the county council was one of the original objectors to the scheme.
A fresh application seems likely anyway. It is understood that Hammerson is interested in a larger scheme and negotiations are under way to incorporate land belonging to local department store Camp & Hopson.
The retailer has land for development – just over 0.6ha (1.48 acres) behind the existing store – but itself has plans to expand. Planning consent was recently granted for 2,373m2 (25,538 sq ft) of retail space for a furniture department in a separate building, although designs include a link to the original Highcross scheme.
Out of town
One local agent believes that plans for Parkway may be threatened by imminent development out of town. Helical Retail has bought the rugby club site on Pinchington Lane from Trencherwood and has won consent on appeal for a 10,684m2 (115,000 sq ft) retail park. A recent mailshot by agents Moore Hunter & Partners indicates that a number of deals are in solicitors’ hands – J Sainsbury’s Homebase, Suite Shop, Kingsbury Interiors, Shoe City, Children’s World, Pet City, Tempo and Poundstretcher are taking space and Halfords was also in negotiation. Wimpy and Fatty Arbuckles have agreed terms on the scheme’s fast-food restaurants.
Richard Deal of Deal Varney says that while statistics show that the wealthy Newbury catchment could support more retail floorspace, it is also sufficiently wealthy to shop in Oxford, Reading and even London’s West End, unless there is sufficient attraction in the town centre.
An added complication is the redevelopment of Gowring’s Ford showroom on Greenham Road where Central & Provincial has won consent on appeal for 2,294m2 (24,693 sq ft) in two non-food retail warehouses and a drive-thru restaurant. Gowring is moving to the Newbury Motor Park being developed by Rivar on Pinchington Lane.
In nearby Theale, Central & Provincial has succeeded in its two-year fight to gain planning consent for a retail unit on land near Sainsbury’s Savacentre at junction 12 of the M4. A 2,230m2 (24,000 sq ft) building on 0.8ha (2 acres) is under construction and is due for completion this summer. The unit has been prelet to Maples Stores. C&P, advised by Grimley, has presold the development to Norwich Property Trust for £2.8m. C&P also won planning consent for the Gowrings Site in Newbury. Construction is due to start next month on two units totalling 2,090m2 (22,500 sq ft) and a 232m2 (2,500 sq ft) drive-thru restaurant.
The promise of the new, and now notorious, bypass and likely unitary status in 1998 is giving Newbury’s office market some of the attention it deserves, according to local agents. While searches often jump from Reading to Swindon, reduced supply along the M4 helps divert inquiries to the town.
A recent study commissioned by the district council highlights Newbury as one of the most successful local economies in the UK but also warns that the town is too dependent on just a few large employers. The report, The Newbury Connection – An Economic Survey of West Berkshire, by Reading University, is due to be published in its final form this month.
Vodafone, Bayer, Quantel and Microfocus are the largest employers at present. Vodafone, which has its headquarters in the town, will not confirm how many buildings it occupies, but 55 is the local estimate. “Take-up has largely been fuelled by Vodafone. One by one, buildings have been picked off and the supply of secondary space is now in decline,” says Ian Pearson of Dreweatt Neate. However, he says that the way Vodafone occupies space – lots of buildings on a mix of short- and long-term leases – actually gives the company more flexibility and the town greater security.
Richard Deal of Deal Varney says that demand has weakened since the beginning of the year. He believes that economic recovery may not bring a repeat of the historic increase in demand because companies such as Vodafone are learning to make more efficient use of space: “When it was setting up in the provinces 15 or 20 years ago it had a very different view of commerical space needs.”
But other companies are emerging. Knight Frank is joint agent with Dreweatt Neate on one of the largest units, the 3,683m2 (39,650 sq ft) Rivergate on Newbury Business Park. The building was vacated by Bass several years ago. Three new names are interested in the building. But Deal reports less interest for Cray Electronics’ nearby 5,481m2 (59,000 sq ft) Emerald House. However, as Pearson points out, buildings of this size are atypical and about 10 times as large as the average letting in the area.
Short supply
More typical is Rivar’s 534m2 (5,743 sq ft) Sherwood House which Regal Hotels snapped up so fast it was almost a prelet, according to Pearson. The rent is £151 per m2 (£14 per sq ft) on a 15-year lease with no breaks and only nine months rent-free. Dreweatt Neate was joint agent with Deal Varney.
Supply of good-quality office space in the town centre is low – Deal claims that 11,357m2 (122,248 sq ft) is available – consequently, rents increased 10% in the past year. Nothing significant is under construction and Deal says that the first project is likely to be the redevelopment of the cinema on Parkway where local entrepreneur Toby Hunter’s Bath Estates & Investments is planning 1,486m2 (16,000 sq ft). Joint agents are Deal Varney & Quintons.
Waterbridge Properties, another of Hunter’s companies, is planning the redevelopment of the 1960s-vintage Pearl House where 2,846m2 (30,630 sq ft) is planned. Before that redevelopment takes place, Bennett Properties is likely to build Bartholemew Court, a scheme acquired from Bryant Properties with consent for 1,811m2 (19,500 sq ft), although this is being revised.
Out of town, Arlington Securities has consent for a further 9,290m2 (100,000 sq ft). There are no immediate plans to develop, but Jeremy Charles of Strutt & Parker, joint agent with Deal Varney, hopes to persuade Arlington to build 1,858m2 (20,000 sq ft) speculatively. Charles says that, as rents of £215 per m2 (£20 per sq ft) are being achieved in Reading, Newbury is undervalued at £150 per m2 (£14 per sq ft).
Newbury’s industrial property market is starting to recover from the effect of the closure of the Greenham Common airbase. Almost overnight the structure of the market changed when the 405ha (1,000 acre) base closed and more than 92,900m2 (1m sq ft) of mainly industrial space hit the market in 1993. Deal comments: “Greenham Park stuffed the market. It was very hard to compete. Much of it was let till the year 2000 and the traditional market has taken a long time to recover from that.”
But John McCusker of Dreweatt Neate adds: “In 1993 and 1994 Greenham undercut units in the town, but now it is fully let, things have picked up and the town is doing well again.” He says that supply in town has halved during the past two years to 46,450m2 (500,000 sq ft). This is partly because nothing has been built for six years and partly because manufacturing companies have been out of recession for the past two or three, he believes.
Recent evidence of a decline in supply is the letting to National Refrigeration Services of 1,464m2 (15,750 sq ft) at Prudential’s East Point on Hambridge Road. The building stood empty for four years. McCusker says that the majority of demand is for units up to 279m2 (3,000 sq ft) or from 1,394m2 (15,000 sq ft). “The middle sector still struggles,” he comments.
But relief from the Greenham threat may, like most of the leases at the air base, be short term. In preparation for the sale of the base, the MOD has made a planning application for 153,000m2 (1,646,932 sq ft) of employment space on 50ha (124 acres). The council has resolved to grant permission subject to a planning agreement. David Nassif of Vail Williams confirms that the base will be offered for sale once the MOD has consent.
A more logical site for development, in view of its location at the Chieveley intersection of the M4 and A34, might be 50ha (124 acres) of agricultural land belonging to Municipal Mutual Insurance which is being marketed by Chesterton and Dreweatt Neate. The agents are quoting £12,355 per m2 (£5,000 per acre) as opposed to agricultural levels of £7,413 (£3,000). The attraction of the land is the adjacent motorway service station and Stakis Hotel which have already been built beside the junction.
