Author Archives: Helen Crane

as term starts, are Universities back on course?

Published in Property Week, 18 September 2020

Main image by Element5 Digital on Unsplash

Imagine turning up to university as a fresher this month. You check in to your room online before you leave home and set off in your packed car alone – you have been asked to arrive solo if you can, to aid social distancing. When you arrive, there is no host of enthusiastic student reps to greet you – just a few masked people behind a Perspex screen. There are not even many other students milling around because arrival times have been staggered to aid social distancing.

You find your room, which you can open using your phone to avoid handling keys, and break the hygiene seal on the door to go inside. You know there is a Zoom social happening later that evening, but that is it as far as organised events go.

It is nothing like the communal, social week of non-stop partying that students were promised in the past – and yet they are being encouraged to go regardless. In a recent televised statement on Covid-19, prime minister Boris Johnson described the reopening of universities as “critical”.

Everything was brilliant. Then Covid came along

Tim Pankhurst, CBRE

But how many students will choose to start university during a global pandemic? And what does that mean for the £50bn purpose-built student accommodation (PBSA) sector?

Pre-Covid, student accommodation was going great guns, as evidenced by Blackstone’s pre-lockdown purchase in February of PBSA operator iQ for £4.7bn – the UK’s largest-ever private property deal.

“Student accommodation was set for a record year,” says Tim Pankhurst, senior director at CBRE. “The system had never been so oversubscribed. The population of 18-year-olds was rising again after 10 years of decline. There was really strong rental growth. Everything was brilliant. Then Covid came along.”

When that happened, most operators offered students refunds if they wanted to leave. Pankhurst says that while some schemes remained almost full – mostly due to international students unable to leave the country – others saw occupancy drop as low as 20%. “Some took a really big hit in terms of income,” he says.

For those who stayed, it was a strange experience. “We never closed our reception or turned off crucial services, but we had to close cinemas and gyms,” explains Jess Gallop, director of people at operator Student Roost. She estimates that around 8,500 of its residents stayed in situ, out of a total of 19,500.

Wait and see

Now, attention is turning to the new academic year. With most courses starting in late September or October, operators face an anxious wait to see how full their buildings will be.

Final student numbers for this year are not yet available, as clearing continues until 20 October, but early indications are not as dire as one might expect in the middle of a global pandemic.

UCAS data shows that, as of June, total applications were 2% higher than in 2019 – and that was before some students saw their A-level results change when the government abandoned its controversial grading algorithm in favour of teachers’ predicted grades.

Online meeting
Source: Shutterstock/ TZIDO SUN

As a result, the cap on the number of students that universities can admit has been temporarily lifted, which means numbers could well exceed last year’s. And at 5%, the current rate of deferrals is in line with 2019.

It seems that after months stuck at home, school leavers are keen to get away to university, even if they cannot yet have the full student experience. “A lot of students have decided that, although their course is going to be online to start with, they would rather be getting integrated into their new area than at home with mum and dad,” says Kevin Williamson, investment director at PBSA operator Host.

“The whole sector has been working on the basis that students are going back, and lots of them are going back.”

According to CBRE’s latest sector report on PBSA, accommodation bookings are holding up. “Although occupancy levels suffered this year, bookings for the 2020/21 academic year are now broadly in line with 2019/20,” it says, adding that headline rents have increased by around 3% in portfolio assets.

The sector may also have benefitted from a last-minute rush due to the A-level results debacle. Accommodation booking website student.com says it saw an 86% year-on-year uptick in searches on its website the day the revised results were announced.

There is a catch, however. Deposits in the sector are low (usually around £250), which means there is little to lose for no-shows. In other words, having a lot of bookings does not guarantee much.

“Do we have bums in beds? We don’t really know until lectures start,” says Pankhurst.

A particular concern is whether international students, who are vital to the PBSA market, are able and willing to travel to the UK.

“The high-end providers have upwards of 90% international residents, while the mid-range have well over half,” says David Feeney, partner at Cushman & Wakefield.

That is not necessarily a problem if there are enough domestic students to fill the beds, but they often cannot afford the prices that come with higher-end PBSA stock. There have been some reports of discounts being offered on rent, though it is not yet widespread.

“The most expensive stock seems to be offering discounts and incentives, while there has been very little discounting on lower-priced stock,” says Feeney.

To allay student fears, many operators are offering ‘no visa, no pay’ agreements, along with other assurances that students will not be held to contracts if the Covid situation changes.

Our focus this year is going to shift to mental health and wellbeing

Jess Gallop, Student Roost

Traditionally, students must sign 44- or 51-week leases on accommodation, which can only be broken if they drop out of university. But as more courses are being held fully or partly online, and some postponed until January, there is talk of more flexible leases becoming the norm. Some operators, including sector giant Empiric Student Property, are already offering single-term lets.

“Being flexible and able to adapt is key,” says Williamson.

“If you’re not, it will be detrimental to the performance of your asset.”

Assurances like these might help PBSA draw in second-and third-year students who, given all the uncertainty, are reluctant to sign a lease with a buy-to-let landlord.

“There’s a growing trend for people to choose PBSA over HMOs [houses in multiple occupation],” says Brian Welsh, chief executive of Round Hill Capital-backed operator Nido Student. “They’re better-managed, there’s more cleaning and HMOs certainly didn’t give anyone back their rent.”

Social benefits

PBSA operators will still provide some of the social aspects of halls of residence too, despite the pandemic. “Our focus this year is really going to shift to mental health and wellbeing,” says Gallop. “We’re really maxing that out because goodness knows how all this will impact our residents.”

Events will also go ahead, either socially distanced or online. For example, Welsh says Nido has hosted online yoga, quizzes, cocktail classes, magic lessons and even Friday night DJs.

So how does this affect the investment outlook for PBSA?

Financially, the sector is getting back on its feet. Unite’s share price has recovered by more than 50% from a low of £6.35, and the share prices of Empiric and GCP have recovered by 20% and 25% respectively from their lockdown lows.

“I still take calls every day with investors wanting to access the sector,” says Welsh. “There isn’t much distress at play – most assets are owned by big, institutional investors that don’t need to access that capital in the short term.”

Most in the sector are viewing the 2019/20 and 2020/21 academic years as a blip that can be overcome relatively easily – as long as Covid-19 restrictions do not last more than two years.

“For September 2021, everyone is betting on quite a big return,” says Pankhurst.

For the freshers starting university in the next few weeks and for the owners and operators of student accommodation blocks the message is the same: hunker down, get through the next year and hope that the best is yet to come. 

jenrick’s proposed algorithm means higher housing targets

Published in Property Week, 17 September 2020

Main image by Breno Assis on Unsplash

‘Algorithm’ has become something of a dirty word in recent weeks, thanks to the furore over A-level results.

So it was unfortunate for housing secretary Robert Jenrick that his recently announced suite of planning reforms also included the use of an algorithm, in this case to determine housing need in local authority areas.

It might not be as nefarious as it sounds, however. In reality, an algorithm of sorts has already been used for this purpose for several years. So what is set to change?

The proposed algorithm is an adapted version of the ‘standard method’ for calculating housing need, first introduced in 2018.

The difference is that the new iteration would incorporate existing housing stock into the calculation and remove the cap that exists under the current approach. Both of these will result in higher housing need figures overall, although a minority of local authorities may see their targets fall.

“[The new method] takes household projections, or alternatively existing housing stock, and applies an uplift based on the affordability of the average house when compared to the average salary,” explains Jonathan Dixon, director, planning at Savills. “The less affordable the typical house, the greater the uplift.”

Government is proposing to set LAs a binding number they have to meet

Matthew Spry, Lichfields

Mitigating circumstances (such as ecological concerns, areas of natural beauty or green belt land) will be assessed at central government level and factored into the targets before they are handed down to local authorities, meaning they will not be able to negotiate a reduction in their numbers as they currently do.

“Currently, every local authority gets a standard number from the formula, then they say: ‘We’ve looked at our level of brownfield land, our ecology, and here’s what we think we can deliver’,” says Matthew Spry, senior director at planning consultancy Lichfields. “What the government is proposing is to do all that centrally for every local authority and set them a binding number they have to meet – no ifs, no buts.”

Analysis by Lichfields suggests that this will give the UK a new national target of 337,000 homes a year compared with 270,000 under the current approach. This overshoots even Jenrick’s stated aim to get to 300,000 a year.

Increase in housing

There is still more work to be done on the algorithm and government sources said in an article in The Times that it could still be “update[d] or refine[d]”. But Lichfields’ initial analysis suggests that all regions of the UK would see an increase in the housing required of their collective local authorities. London would be asked to up its provision to a gargantuan 93,532 homes a year, compared with a current target of 56,023 and average delivery over the past three years of 35,815.

“The growth in London is huge, and it’s undeliverable,” says Mike Derbyshire, head of planning at Bidwells.

Conservative areas in the South East – some of which have serving cabinet ministers as their MPs – could also see big increases, which could cause consternation for the government.

“It will certainly result in development on green belt and other rural sites, although the government is saying green belt status will be taken into account,” says Derbyshire.

Levelling up

The South East’s annual target would be increased to 61,276 from the current 49,773 under the new proposals. The region has delivered an average of 39,120 in the past three years.

This increase in the most expensive areas of the country is inevitable, because the methodology puts emphasis on affordability – but experts say the real aim of the new algorithm is to ‘level up’ the Midlands and North.

Under the standard method, these regions have delivered more homes than planned each year, and now they will be asked to stretch that further. For example, local authorities in the West Midlands currently deliver 22,003 homes a year, more than the current target of 19,667. Under the new plans it would be asked to deliver 27,503.

Planners agree that these top-down targets are a bold move, but believe they are a response to other policies not having produced the desired results.

Green belt
Source: Shutterstock/ smudge

“The government has asked local authorities to deliver on numbers and they have singularly failed,” says Derbyshire.

One area of concern is local plans, which set out how and where councils will grant planning permissions in order to meet housing need.

All councils must be operating under an up-to-date local plan by 2023, but recent research by the Campaign to Protect Rural England found that only 30% were currently doing so.

Developers say the new algorithm and government-enforced targets will help them, by making it easier for councils to formulate and stick to their local plans.

“I think it will streamline the local plan process and that will help everyone – councils, government, developers,” says Andrew Taylor, head of planning at Countryside. “We spend far too much time arguing with the housing figures. If you can remove that, that’s great.”

A Pandora’s box

However, others say that if the targets are too high, this could actually prompt councils to deviate from their local plans.

“It could open a Pandora’s box for developers to come forward with sites that aren’t allocated in the local plan, to help meet targets,” says Faraz Baber, director at Terence O’Rourke.

And that is if the local authorities even accept the targets in the first place.

Baber says this could be a particular issue in the South East, where emotions run high when it comes to things like the green belt.

It will result in development on green belt and other rural sites

Mike Derbyshire, Bidwells

“Some of these sleepy shires generally don’t care what the government has come forward with and will always repel homes in their constituencies,” he says.

But it is not just about Home Counties Nimbys; it is easy to see other councils baulking at their lack of involvement in the process, too.

“Top-down targets might be difficult to get local authorities to accept,” says Spry, noting the contrast with the localism agenda espoused by the Conservative government of the early 2010s.

“It’s quite a gamble, but with a majority of 80 perhaps the government feels confident in telling them what their numbers are going to be.”

A crucial question, and one that has not yet been answered, is what will happen if councils do not meet these new targets.

If they really wanted to push housing numbers, says Baber, central government could take over local planning departments. “It could be as radical as the government taking over via the planning inspectorate and doing their local plan – but that’s not a pretty thing to have to do,” he says.

With consultation and potential tweaking still to get through, this is not necessarily the housing need calculator we will end up with. But what its introduction tells us is that, when it comes to increasing housing numbers, the government is prepared to play hard ball.

should covid prompt a design rethink in build-to-rent blocks?

Published in Property Week, September 2020

Main photo by Ján Jakub Naništa on Unsplash

One of the build-to-rent (BTR) sector’s biggest selling points are the amenities.

As the market has grown, the likes of cinema rooms, gyms and co-working spaces – as well as a host of weirder and more wonderful options – have become standard features. After all, these shared spaces are one of the main differences between renting in a BTR scheme and from a buy-to-let landlord.

It’s fair to say that social distancing during the coronavirus pandemic has thrown a massive spanner in the works. Most amenities were closed during the early days of lockdown, and although they are reopening now, many have reduced capacity.

Conversely, outdoor spaces – whether a balcony, roof terrace or garden – have been in high demand. Co-working spaces have also proved popular in recent weeks, as more people have become comfortable enough to leave their apartments while still working at home.

So, do developers now need to rethink the design of their blocks and the amenities they provide?

“While investment in [BTR] has grown considerably over the last five years, there are lots of schemes still in planning and development,” says Rosie Ashton, an architect in CBRE’s multifamily consultancy.

“Our response to Covid and its impact on how we live now will influence the developments completing over the next few years.”

Encouragingly, those on the ground report that residents are still using amenity space – just in a more careful way. “The spaces are more bookable, it’s more organised and the density is lower,” says Russell Pedley, co-founder of architects Assael, who has worked on BTR schemes including Legal & General’s Blackhorse Mills in Walthamstow. There, even the swimming pool has reopened thanks to a new booking system.

‘Virtual community’

Vertus, Canary Wharf Group’s BTR arm, opened its first building at 10 George Street in mid-February just weeks before the lockdown. Alastair Mullens, head of Vertus, says it created a “virtual community” for residents during lockdown and has now made amenities bookable, moved around furniture to support social distancing and reduced the size of events such as fitness classes.

“It is really important for our residents to be able to continue using these areas in a safe manner,” Mullens says, describing them as “the heartbeat of life at 10 George Street”.

East Village Summer
East Village: Get Living says residents value amenities that are ‘an extension out of their apartments’

Different amenities pose different challenges, however. Christian Armstrong, director of brand, product and technology at Get Living, says residents are really valuing amenities that are “an extension out of their apartments”, such as the sky garden at its Elephant Central scheme. This is supported by anecdotal reports that some operators are looking to up their amenity provision due to demand from residents. However, Armstrong says “highly communal spaces” like cinemas are “more difficult to provide” at the moment.

Flexible spaces

Wisely, those drawing up new BTR developments are designing in flexible spaces that can be adapted to more than one use. Before coronavirus, some developers had started to build ‘shell’ amenity spaces that they could adapt over time based on residents’ needs – but in the Covid era spaces could change use in the space of a single day.

John Badman, director at global architecture, planning and design practice CallisonRTKL, envisions “adaptive spaces that can change by the hour – yoga in the morning, co-working space at lunch and a pop-up bar in the evening”.

Assael has been asked to carry out ‘audits’ on amenity space in BTR developments since the pandemic took hold, and has added features such as wider corridors and separate up and down staircases to enable social distancing.

“It’s important to think about design resilience,” says Pedley. “Right now, the issue might be social distancing because of Covid, but in future the space could be holding a large-capacity event and those features would still be beneficial.”

Covid’s impact will influence developments in the next few years

Rosie Ashton, CBRE

Others see less need to hedge their bets. “Will BTR residents still use cinemas and gyms? Sure they will,” says Graham Bates, senior director strategy – Europe at LIV Group. “This will pass. Design should be about what is right for the building and the target demographic.”

One amenity everyone agrees BTR needs to factor in, whether in apartments or in the communal space is a functional place to work.

“If you’re working from home, things like fast internet, co-working spaces, a gym and on-site food and beverage are a benefit,” says John Dunkerley, chief executive of BTR investor Apache Capital Partners.

He adds that Covid has “probably accelerated” the letting of its Angel Gardens scheme in Manchester, which is now more than 50% occupied.

Demand for workspace could see a shift in priorities in terms of BTR amenities, believe some.

“Where once you might have found a cinema room, in future it will be a printing room complete with stationery cupboard, while the bookable dining room will double as a virtual boardroom,” says Badman.

“The concierge will offer IT support, while phone booths might pop up along corridors to allow meetings and video calls to be taken privately.”

Schemes at the design stage certainly look to be including more co-working space. “We are advising clients to design spaces for co-working and in some cases, spaces previously allocated for commercial use are now being repurposed,” says Bates.

Repurposing space

Operators are also rushing to repurpose space in existing buildings. Get Living, for example, is converting its front offices into workspace.

“We’re starting to see the fabric of the community come together,” says Armstrong.

“You can’t artificially create a community, but people working from home more is contributing to that.”

Not everyone wants to work collectively, though, particularly in this time of social distancing – and this could prompt a rethink of how space is allocated inside individual flats.

Because of the economic imperative for critical mass in BTR schemes, it is unlikely we will ever see studies being provided en masse.

“It’s probably going to be more down to intelligent design rather than increasing floor areas,” says Mark Clegg, international partner at Cushman & Wakefield.

Angel Gardens
Angel Gardens: Apache Capital Partners says Covid-19 ‘probably accelerated’ the letting of its Manchester scheme

Pedley adds that “something like a cupboard opening or a space in front of a bay window” could become a functional desk space, while Lesley Roberts, executive development director at Allsop, says the whole layout of apartments could be radically changed to create a true hybrid space.

“I think we might see more ‘work-live’ units like we saw in east London in the 1980s and 90s,” she says. “It’s the sort of thing that BTR could embrace.”

Residents are also becoming more discerning about the specifications of their apartments, having spent so much time in them.

“They’ve been paying more attention to things like the quality of light, aspect, fresh air, biophilic design and layout,” Roberts says.

One element that comes up time and time again is the need for outdoor space. During lockdown, the divide between those with proper balconies and those without was thrown into sharp relief, and as such, private outdoor space has become a priority for those developing or investing in BTR.

“Conversations I’ve had with developers and investors over the past couple of months suggest the days of the Juliet balcony are over,” says Clegg.

Where balconies are not economically feasible, for example in lower-priced units, communal outdoor areas will be vital.

“We already see developers introducing sheltered outdoor spaces such as podium and rooftop gardens, as well as traditional ground-floor-level communal gardens, which can be zoned to support social distancing,” says Ashton.

Ultimately, though, there’s only so much green space an inner-city apartment block can provide. With so many of us reconnecting with nature during the pandemic, could the golden rule that BTR schemes must be within striking distance of a station start to shift?

“Renters might be happy to walk an extra five or 10 minutes to the station if their apartment is next to a park,” says Clegg, while others go even further, suggesting Covid might be the catalyst for BTR to finally make its move out of the city.

Suburban BTR

“We’ve noticed there’s more appetite to live in suburban build-to-rent,” says Pedley, who envisions the rise of the “garden-style development, where amenities are housed in a centralised clubhouse, and there are individual houses and small apartment blocks in a parkland setting”.

Really, the debate about the future of BTR relies on making guesses about how quickly life might return to some kind of normality – and what that ‘new normal’ might look like.

Knee-jerk responses don’t seem like a good idea to me

Graham Bates, LIV Group

While there are plenty of ideas and lots of short-term tweaking of amenity space, no one is rushing to make sweeping long-term changes.

“Knee-jerk responses don’t seem like a good idea to me, when over the longer term Covid-19 will hopefully not be present,” says Bates.

Covid has been a reminder of the unpredictable factors the industry deals with when designing buildings, and how quickly things can change in the few years it takes for a floor plan to become a functioning building. These are things that are very difficult to plan for.

“If we change everything to make it fit-for-purpose to avoid contagion, then what’s the next thing to come along?” says Roberts. “It reminds me of when the iPod came out and all the new cars were fitted with iPod jacks, and then three years later they were obsolete.”

The only way the sector can prepare for the future is to make sure buildings are adaptable and resilient. Those that don’t rise to the challenge could find that in the new normal, their buildings are a whole lot less popular than they were in the old.

Green retail shoots in the Emerald Isle

Published in Property Week, August 2020

Main image by Gregory Dalleau on Unsplash

Retail is one of the industries that has borne the brunt of Covid-19. As the pandemic took hold, shops across the world pulled their shutters down – some temporarily, some, unfortunately, for good – and Ireland was no exception.

Now, retailers are starting to count the cost of the pandemic. While few have dared estimate the value of lost sales, the figure will no doubt be eye-watering.

But despite these huge losses, green shoots have started to show themselves in the Irish market in the weeks since non-essential retail reopened in mid-June.

So what is the state of play on the Republic of Ireland’s high streets, in shopping centres and on retail parks? And who is looking to take vacant space?

As in the UK, Irish high street footfall has been badly hit – particularly in Dublin and Cork, where the likes of Grafton Street and St Patrick’s Street rely heavily on tourists.

“Footfall has dropped by as much as 50% in some areas and the cost base of many businesses is now way out of line with the trading reality,” said Arnold Dillon, director at trade body Retail Ireland, in a statement in mid-August.

Suburban high streets are performing slightly better than city centres because so many people are working from home, but Karl Stewart, head of retail at Cushman & Wakefield Ireland, worries that this is a “false economy” that could correct itself later on.

Footfall has dropped by as much as 50% in some areas 

Arnold Dillon, Retail Ireland

There have already been significant retail closures, the most high-profile of which was Debenhams’ liquidation of its Irish business on 9 April. The department store chain closed five stores in Dublin, Cork, Limerick, Galway and Waterford.

However, liquidator KPMG says an unnamed retailer is interested in taking over some stores and keeping on the staff.

Stewart, who is acting on some Debenhams sites, is positive about the enquiries received. “There are enough people to be discussing with,” he says.

Oasis and Warehouse Group entering administration in June resulted in 13 Irish stores and

29 concessions closing, while Laura Ashley’s collapse resulted in six closures and Cath Kidston’s two. Chains such as Monsoon, Urban Decay and Topman have also closed individual stores in the wake of Covid-19, as have many independents.

Less exposed than UK

But experts say Ireland is less exposed to failing retailers and excess floorspace than the UK. “We haven’t seen the same number of closures as the UK, but there is an awful lot of noise about restructuring and that is going to make it difficult considering where we’re at in the cycle,” says Stewart.

Despite the wider gloom, some interesting lettings offer a glimmer of hope.

Nasdaq-listed sportswear retailer Columbia signed for its first-ever Irish store two weeks before lockdown and opened the 1,300 sq ft shop on Trinity Street in Dublin city centre on 4 July.

“They’re not concerned about Covid, because outdoors products are doing really well,” says Jenny Donnelly, associate at QRE, who acted for the landlord on the deal.

Dublin King St Zara
Back to business: shoppers queuing outside Zara in Dublin’s King Street soon after non-essential retail reopened. Source: Shutterstock/ AJNizetto.

Another bold move is Vodafone’s decision to open its first Irish ‘experience store’, a deal signed in early June. It will exit two existing locations on Dublin’s Henry Street and move into a larger 6,800 sq ft unit. Inditex-owned Pull & Bear will leave that store and upsize to a 14,000 sq ft store on Mary Street, with both opening later in 2020.

Vodafone hopes the experience store will capitalise on the brand’s digital presence, allowing customers to try out products they have seen online.

Irish shoppers have traditionally been less keen on online shopping than their counterparts in the UK and Europe – but lockdown may have changed their minds. Parcel delivery company DPD Ireland made 730,000 deliveries per week in May and June, up more than 100% on the previous year.

The growing penetration of online shopping in the Irish market was also a motive for Columbia’s Irish debut.

“They had a huge online presence in Ireland and needed a store where people could see the products and get that brand experience,” says Donnelly.

Away from the high street, shopping centres in Ireland reopened on 15 June and footfall numbers look pretty solid.

Shopping centres recovering

“High streets aren’t doing so well, but centres are doing OK,” says Declan Stone, managing director of Colliers International in Ireland, adding that footfall is now back up to 85% of the normal level at some locations.

What has changed more dramatically is dwell time. “You don’t have the cinemas, bars, restaurants and all the things that make it a nice experience,” says Stone. “People are looking at a product online and then going into a centre, buying it and leaving. There’s no browsing.”

Nevertheless, even in the troubled world of department stores a handful of deals have successfully completed. Brown Thomas agreed a deal for a new 63,000 sq ft flagship at Dublin’s Dundrum – the largest shopping centre in Ireland – in February.

Landlord Hammerson confirmed to Property Week that this is still going ahead on the same terms, albeit with a slight delay in opening due to lockdown. It will replace two floors of the former House of Fraser in the centre.

Stewart says some retailers are still in the market for shopping centre space, mostly in the value and essential goods sectors.

“TK Maxx is a strong one, Boots did quite a lot during Covid and we also work for Dealz [Poundland’s Irish brand], which took four or five new stores during Covid and trades very, very well,” he says.

“Sports Direct is doing stuff, albeit the deals are very competitive from their perspective, and Penneys [Primark’s Irish brand] is looking at a few things.”

Irish retail might be helped by the fact its excess retail space, while significant, is not at the same level as the UK. “We don’t have quite the same amount of retail floorspace and the same oversupply as the UK,” says Stewart. “A lot of our shopping centre stock was developed from the early 1990s onwards, so it’s still fairly modern.”

Retail parks bounce back

Retail parks are also reported to be trading well. “They have out-of-town locations and are outdoors,” says Donnelly. “An investor looking to the future might think: ‘If this happens again, retail parks will be able to come back much quicker than other locations.’”

In July, perhaps buoyed by people’s zeal for home improvement during lockdown, Scandinavian homeware store Jysk signed a deal for its first Dublin store at Gulliver’s Retail Park. The store will open by the end of 2020. Jysk will also open in Sligo this year and plans to expand from seven stores to 20 in Ireland by the end of 2021.

Also in July, interiors store Harvey Norman opened a huge new flagship on the Gateway Shopping Park in Knocknacarra, County Galway.

Another business that boomed during lockdown is sportswear retailer Decathlon, which “has opened its first store in Ireland and [wants] eight more around the country”, according to Stone.

Bigger-box retailers remain acquisitive, both because the types of products they sell are more pandemic-proof, but also because they do not want to pass up on opportunities.

“For retailers that need 15,000 sq ft or more, there isn’t really the supply out there so we haven’t seen widespread abandonment of 18- to 24-month acquisition strategies,” says Stone.

There will be rent corrections, particularly in prime locations 

Jenny Donnelly, QRE

Supermarkets are also on the lookout for space. “Aldi and Lidl are still acquisitive and there is an awful lot of activity in the supermarket space among Tesco, Dunnes and SuperValu,” says Stewart.

New lettings are a welcome boost, but landlords will need to put equal thought into how they renegotiate leases with existing tenants.“There’s no evidence that rents have come down yet, but naturally they will,” says Donnelly. “There will definitely be rent corrections, particularly in prime locations such as shopping centres where there are a lot of legacy leases.”

The last wave of shopping centre development in Ireland happened before the last recession in the early noughties. Many retailers signed 20-year leases, so there are many 15-year break options coming up in the next few years.

“[These retailers] are on rents that are out of kilter with the market and turnover,” says Stone, adding that savvy landlords will look to “blend and extend” – offering a rent reduction or rent-free period in exchange for the retailer adding an extra few years to their lease.

Turnover rents are another option Stone believes some retailers will be pushing for – something that was on the agenda before the outbreak of Covid-19.

Landlords will need to make compromises, but arguably some can afford to. A number of Irish shopping centres changed hands in the past few years as prices came down, with many being snapped up by foreign private equity players.

“These owners bought them at discounted levels and they have the latitude to weather the storm,” says Stone.

In short, they can afford to make a few concessions to persuade tenants to stay put.

The full extent of the pandemic’s impact on Irish malls, high streets and retail parks will not be fully clear for some time. For now, landlords will be hoping that acquisitive supermarkets, sportswear and DIY brands will plug some of the gaps left by fashion retailers.

With more businesses going into administration or closing stores, it may not be enough to keep some locations afloat, but it should keep the green shoots of recovery growing in others.

Covid-19 storm shakes Channel Islands

Published in Property Week, July 2020. Pic: Shutterstock/Alagz

It is no secret that leisure and tourism have been among the sectors hit hardest by the coronavirus pandemic.

Choppy waters: Jersey and the Channel Islands have taken a big hit from the fall in visitor numbers due to Covid-19

With hotels, restaurants, bars and leisure facilities unable or unwilling to open during the height of lockdown, premises across the country were left empty and businesses put in jeopardy.

The effects of this have been particularly strong in areas such as the Channel Islands. While the offshore financial services sector dominates the islands’ economy, the region’s good weather makes the tourism industry one of its most important secondary assets. An Oxford Economics report in March 2019 found that tourism accounted for 8.7% of Jersey’s economy (as measured by GVA), equivalent to a total of £372m.

In addition, prior to the Covid-19 pandemic, restaurants and bars traded well on the Channel Islands, supporting the affluent lifestyle that many in the financial services sector enjoy, as well as serving visitors.

Now the world is starting to tentatively reopen, the Channel Islands will be counting the cost of this downtime. So, which businesses are back up and running, what casualties have there been – and what has been the overall impact of the pandemic on the property market?

As in the rest of the UK, hotels have been particularly badly hit. Although some kept trading through lockdown, bookings plummeted and for the most part they remain at much lower levels than in a normal summer season.

Hotel occupancy down

“One leading hotel we are aware of is 55% occupied, compared with 95% occupancy for the corresponding period last year,” says Julian Mallinson, director in CBRE’s Jersey office.

Before coronavirus hit, tourism on the islands was on the up. In 2019, Jersey alone welcomed its highest number of holidaymakers since 2001, according to figures from local tourism body Visit Jersey. This had reversed a downward trend that had lasted for decades, so the pandemic could not have come at a worse time.

“Tourism on the Channel Islands really had its heyday in the 1970s, before it became cheaper to jump on a plane to mainland Spain,” says Brian McCarthy, managing director of Le Masurier, one of Jersey’s largest property companies.

“In recent years, we’ve seen hotels being converted to apartments, particularly outside St Helier – but these trends have been reversing of late and Visit Jersey has done an excellent job of promoting it. Pre-Covid, there was actually an uplift in visitors to the island.”

The type of accommodation available has been modernised, including the development in 2018 of the first Premier Inn on Jersey. Le Masurier developed the 91-bed property in St Helier, and is also developing a second 120-bed scheme in the town as part of a larger mixed-use project. Premier Inn is also opening its first Guernsey site, which is being brought forward by developer Comprop.

The operator says it remains confident about the region’s prospects. “We’re investing strategically and we don’t see coronavirus diminishing the attractiveness of the Channel Islands as a place to do business or take a leisure break,” says Alex Flach, UK development director at Premier Inn parent company Whitbread.

Premier Inn

“I suspect Jersey and Guernsey will become even more popular as tourist destinations as people continue to seek out shorter ‘staycation’-type breaks.”

Figures from Visit Jersey support this idea; it reported a 40% spike in its month-on-month web traffic in July. It believes this increase has been boosted by visitors from the UK, who make up the vast majority of the island’s holidaymakers, looking for holidays closer to home.

However, an increase in staycations over the coming months and years may not make up for the huge amount of income lost.

“Hotels in particular are dependent on a good summer’s trade to manage the less profitable winter and ‘shoulder’ months,” says Mallinson.

“Although staycations will undoubtedly increase this summer, they will not replace the level of overseas tourists who have cancelled bookings.”

Tourists can visit Jersey if they produce a negative coronavirus test on arrival, among other conditions, but the Bailiwick of Guernsey still has a mandatory 14-day self-isolation period in place for visitors.

Once this is lifted, Guernsey might be particularly attractive for tourists looking for a safer place to holiday, as it was the first place in the British Isles to be declared coronavirus-free at the end of May.

Early return to offices

Companies on Guernsey have started returning to business-as-usual more quickly than those across the rest of the British Isles, with some firms returning to their offices as early as the end of May. It is too early to fully assess the impact of this, but anecdotal reports suggest that this boosted service businesses in the island’s main office hubs.

Meanwhile, Jersey has had 331 confirmed Covid-19 cases (as of 22 July). It also relaxed lockdown measures more quickly than the rest of the UK, entering the first phase of its lockdown exit strategy on 11 May.

“Jersey came out of lockdown relatively quickly and this has potentially lessened the impact of lockdown somewhat,” says Nick Trower, head of agency at D2RE in Jersey.

“Now the borders are open and there are testing procedures in place, the island is trying to get tourism and the leisure industry back on its feet.”

Businesses have had to adapt to a different post-lockdown reality, though. McCarthy notes that “pubs and restaurants can reopen now, but have had to reinvent themselves. Part of Broad Street in St Helier has been pedestrianised to allow pubs to open alfresco and trade is certainly picking up”.

Many food and beverage (F&B) businesses secured rent holidays or reductions during the pandemic, according to Mallinson, and this has limited the scale of business closures and vacant units.

“During the second and third quarters, many restaurant and pub tenants requested rental reductions, rent deferments or rental holidays from landlords and these were generally granted,” he says.

St Helier high st

Tourism uptick: prior to Covid-19, an increase in visitor numbers helped boost St Helier’s retail and leisure sectors

“There have been a few business closures, but demand for vacant restaurants is expected to remain low.”

Jersey lost the Shipyard restaurant at the St Helier ferry port and a handful of restaurants at Jersey Airport when Casual Dining Group called in administrators and closed 91 of its 250 outlets. However, the group had been experiencing difficulties before the coronavirus pandemic.

Trower echoes Mallinson’s point that there have not been many business closures yet. He says his firm has only dealt with one small retail unit, which was re-let within two weeks, and he believes operators and landlords are assessing the market before making any difficult decisions.

“Generally, the letting market is tough. People are taking stock of trends and we expect it will stay this way for a few months yet,” he says. “[However], the government of Jersey’s code of practice has allowed landlords and tenants to act properly and in most cases we have dealt with, they have come to amicable agreements.”

McCarthy describes the restaurant market in Jersey as “saturated” and predicts that units where businesses have closed could stay vacant for some time.

The outlook for pubs is more positive. Mallinson estimates that 90% of pubs on Jersey have already reopened. This is partly because trade in the Channel Islands is dominated by two medium-sized pub companies, Liberation Group and Randalls, eliminating some of the risks faced by small and independent operators.

Pubs back in business

Liberation, which operates 68 pubs on Jersey, Guernsey and Alderney, has opened a proportion of its managed pubs already, while Randalls has opened all 19 of its pubs.

The drop in income for pubs, restaurants and hotels is likely to result in falling capital values for properties, but it is too early to predict what the scale of this might be.

Mallinson adds that there has been no “transactional evidence” in the sector this year thanks to the halt in the market caused by the pandemic.

It is also hard to tell what impact the pandemic will have on property development in the leisure and F&B sectors, but early indications seem positive.

Most projects that stalled during lockdown have now resumed and Flach says Premier Inn sees “the potential for further growth on the islands”.

Local property experts think the islands could bounce back fairly quickly, but redundancies and salary cuts across the UK have had a knock-on effect on regions heavily reliant on tourism. Staycations and restaurants are not at the top of people’s priority lists this year and that could put a further dent in the region’s finances.

As a result, the Channel Islands may need to work up contingency plans to ensure local hospitality businesses stay afloat.

where will we be working after coronavirus?

Published in Property Week, June ’20. Pic: Santander’s proposed campus office in Milton Keynes, designed by LOM.

As we emerge from the coronavirus pandemic, it is becoming clear that while lockdowns may ease and scary lines on graphs fall, life will never be quite the same.

A shift in attitudes towards office space looks set to be one of the biggest changes. Having gone about their business via remote desktop, email and video link for the past three months, many office workers in the South East have realised they don’t need to commute into central London five days a week. For employers, this is an opportunity to make bold changes to the function, size and location of their office space.

With the property market having only clicked back into gear in the past few weeks, occupiers have yet to decide how much office space they
will need in the future. But
one option being discussed
in (virtual) boardrooms is the ‘hub and spoke’ model. Broadly speaking, this involves retaining a central London office that’s potentially smaller than the existing space a company occupies and supplementing

it with other premises dotted around the South East.

This gives staff a base closer to home that they can reach by car, bicycle or a short journey on public transport, easing fears about the contagion risk of crowded commuter trains. And it helps companies spread staff out across multiple locations to comply with social distancing.

“Many people aren’t comfortable travelling into London, but want to get out of the house,” says John Avery, director at architecture and workplace design firm LOM. “That is where the suburbs come in to play.”

So what kind of firms will look for suburban hubs and which towns are set to benefit from the anticipated trend?

Office-based businesses of all kinds are currently putting serious thought into the buildings they occupy. In Savills’ recent Office Fit survey, which polled 65,000 clients, 20% of respondents in the South East said they wanted to spend time working from home, compared to 8% before Covid-19.

“This means more people are likely to pop to a satellite office,” says Jonathan Gardiner, Savills’ head of UK office agency. “That will be as relevant to a firm of lawyers as it will be to a start-up.”

However, it is large companies such as law firms, consultancies and financial sector businesses who have the staff numbers and resources to support a fully fledged hub-and-spoke office location strategy.

Many people aren’t comfortable travelling into London

John Avery, LOM

Many property experts think banks are particularly likely to adopt this approach, as many were already rethinking their space requirements before the pandemic.

“Santander is opening a massive campus in Milton Keynes and I suspect there will be a few others like that,” says Jonathan Radcliffe, senior broker at office search website Offices. co.uk. “Rather than building a skyscraper, they will go out of town and build outwards.”

JP Morgan an early mover

Investment bank JP Morgan is one of only a handful of firms to have made a move so far, hiring temporary space in Basingstoke, which has housed some of its City staff since March.

Another sector expected to accelerate decentralisation plans following Covid-19 is tech. “At the end of last year, a number of tech occupiers were thinking about bespoke operations,” says James Finnis, head of South East office agency at JLL. “This was aimed at tapping into different talent pools; Guildford, for example, has become the focus for the computer gaming sector, driven by the [presence of] University of Surrey”.

The South East office market already boasts a large sprinkling of IT, telecoms and pharma companies and Vail Williams partner Guy Parkes says that for firms in those sectors, a move from the capital to other South East locations could provide “an antidote to the war for talent” in London, giving them access to a wider pool of potential recruits.

However, one sector that might struggle with the hub- and-spoke model is creative industries. “It could be harder for creative companies, where staff really feed off sitting next to people who do exactly what they do and sharing ideas constantly,” Gardiner concedes.

Postcode surveys

For those sectors where hub-and-spoke models do
make sense the location of a company’s offices will largely depend on where their staff tend to live. Many firms are carrying out postcode surveys to ascertain this. Generally, areas to the west and north of London will be more popular than east and south, purely because the latter have a smaller catchment area, only stretching for around 75 miles before hitting the coast.

Finnis predicts that requirements will “initially be small – sub 20,000 sq ft”, which shouldn’t pose a problem in terms of office availability in any major town in the South East.

“Based on how many people commute into Waterloo, my instinct is that a lot of relatively senior people tend to live to the south west of London in Surrey, Sussex and Hampshire,” says David Cuthbert, principal at Hanover Green.

He pinpoints the area to the west of the West End, which includes key office locations such as White City, Chiswick and Osterley, as one that could potentially benefit from Covid- 19-related moves.

Gardiner casts the net wider, saying Savills has fielded enquiries for hub-type offices in location stretching from “St Albans in the north, Reading to the west and Guildford to the south of London”.

Slough could also be a popular option, as it is already an established corporate office location with a mix of business parks and town-centre space.

However, London-centric companies could need a fair bit of persuasion about its merits. “They might have a preconception of somewhere like Slough and not appreciate that it has one of the greatest concentrations of corporates outside of the capital and therefore quality office space comparable to central London,” says Gardiner.

Whatever location they choose, the saving on an office in the South East compared to a similar one in central London is around 60% according to Parkes, who adds that the Winnersh Triangle business park in Reading, which Vail Williams acts for, has seen a spike in interest in recent weeks.

One of the key considerations for occupiers looking to embrace a hub-and-spoke model is whether business parks are the right way to go. In their favour, they are less crowded than town

centres and often have access to open spaces, making them ideal for social distancing. They are also lower-rise with buildings that lend themselves to single occupancy, at a time when having fewer shared spaces may be seen as an advantage.

“People might feel more comfortable with their own front door so they can be completely in control of their environment,” says James Raven, chief executive of Arlington, which owns office complexes including Uxbridge Business Park and Arlington Square in Bracknell.

Some are predicting that business parks will receive a post-lockdown shot in the arm, but other property experts argue campuses can feel quite isolated and lack amenities.

After-work drinks with colleagues might seem like a long-forgotten memory right now, but work-based socialising will return, and companies can’t forget the lifestyle element of office life, especially if they are moving staff away from London.

Amenities, lifestyle and what’s around the office are really important

Jonathan Goring, U+I Group

page3image33707840“We have a development in Brighton, which is a fantastic place,” says U+I’s group development director Jonathan Goring. “Amenities, lifestyle and what’s around the office are really important.”

Another asset unique to business parks is their substantial car parking. Savills’ Office Fit survey found that 74% of workers in the South East commute by car and anecdotal reports suggest staff that don’t currently use a car to get to work could start to do so to avoid crowded public transport.

Regardless of where satellite offices are located, access to public transport will still be important if links to London are to be maintained.

“The east to west Crossrail line has already caused a migration of companies further south to places like Slough, Reading and Maidenhead, and St Albans and Watford in the north also have great train links,” says Gardiner.

Whether out of town or in town, flexible space that can be scaled up or down will also be key. “At the moment companies need to accommodate social distancing, but may need less space once we can be more socially close together again,” says Avery.

As people are more likely to do admin tasks and answer emails at home, the focus will shift away from banks of desks and towards collaborative areas.

“Standard, desk-based work can be done quite easily from home,” says John Mulqueen, head of offices for EMEA at CBRE GI.

“What can’t is all the other reasons people go to the office: for collaboration, career development, learning, being seen or driving the culture of the organisation. The wellness and health trends will really be accelerated too, and I think there will be a move away from grade-B space.”

Satellite functions

Radcliffe adds: “Businesses will want big, bookable rooms and conference facilities. People will go to these satellite offices to do a specific meeting or task, and then go home.”

While many people have ideas about how hub-and- spoke office models might work, the big question is how many companies will ultimately embrace them. Not everyone is sold on the concept.

Mulqueen is sceptical about firms replacing London space with suburban offices in the long term. “I don’t see the logic in taking an office in Woking or Guildford instead of central London,” he says. “If you’re going to be working from home a few days a week, when you do go to the office you want to be in the centre, part of the buzz. It makes more sense to centralise a company’s efforts in creating a space that attracts their people.”

Some people argue the hub- and-spoke model will only work for certain types of businesses. “It won’t be one cap fits all – we won’t see many firms decamping en masse to the home counties,” believes Cuthbert.

Regardless of how things pan out, property experts agree, Covid-19 has taught businesses a valuable lesson about the need to diversify their office portfolios.

“This kind of scenario will continue to weigh on people’s minds,” says Raven, adding that firms will “consider the real work-life balance needs of all their staff and the operational resilience of having diversity in their real estate strategy”.

The hub-and-spoke model may not be the right solution for all businesses, but it’s something all businesses would be wise to consider post-pandemic.

London festival of architecture panel: rethinking city homes for a post-pandemic world

I chaired a panel with Ben Adams of Ben Adams Architects and Michael Katsibas of KAP Studio as part of the digital London Festival of Architecture.

We discussed how design can improve residents’ health and wellbeing in apartment blocks using two example projects in London and Los Angeles, as well as the importance of social spaces and how community can be encouraged in the post-Coronavirus era.

change is coming for birmingham’s creative quarter

Published in Property Week, May ’20Download PDF

Read on Property Week online here

London’s Shoreditch, Manchester’s Northern Quarter, Glasgow’s Finnieston – every big city has its own hipster haven. In Birmingham, that’s Digbeth – and if you haven’t heard of it yet, you soon will.

The story is a familiar one. Once a Victorian centre of industry, Digbeth was home to factories producing everything from buttons and Bird’s Custard to sheet metal and Typhoo tea.

While heavily populated in its heyday, most residents had left by the time the last of that era’s slum housing was cleared in the 1970s.

Light industrial buildings remain to this day, but the real life force in Digbeth are the artists, musicians and start-ups that have taken over former warehouses, turning them into studios, venues and workspaces.

Now, property developers want a piece of the action. Their plans are bold, encompassing everything from towering apartment blocks to a filming complex backed by the creator of Peaky Blinders – one of modern-day Birmingham’s proudest exports.

But will they be able to deliver their vision without compromising the creative community at the heart of the resurgent location?

Digbeth is a surprisingly well-connected part of the city

Mark Sitch, Barton Willmore

Most of the developments planned are residential and proponents argue that this will support the burgeoning creative community. They note that it is a prime location, steps away from the city centre — the start of Digbeth’s high street is across the road from Selfridges – but that it is still primarily a night-time economy.

“The aim is to return a population to Digbeth, which is what it needs,” says Mark Sitch, senior partner in Barton Willmore’s Birmingham office. “It’s a surprisingly well-connected part of the city, but also a forgotten part of the city.”

Most of Digbeth is less than 10 minutes’ walk to the future HS2 station and a new tram stop will arrive on Adderley Street under the extension of the city metro.

The new schemes coming forward are far larger in scale than anything that has been delivered in the past few years.

Hub’s 2,000-home Digbeth Bus Garage is at the design stage and Seven Capital’s £200m Connaught Square scheme secured planning consent for 770 units last year. Court Collaboration’s 928-unit Stone Yard is in for planning and the same developer will lodge plans for a 454-unit tower on the site of Digbeth’s Irish Centre next month.

UpperTrinityStreet
Building blocks: 930 units are planned at Cole Waterhouse’s mixed-use Upper Trinity Street

Meanwhile, Homes England has acquired land for up to 1,000 homes on Montague Street and 930 units at Cole Waterhouse’s mixed-use Upper Trinity Street are in for planning.

Most of this will be a combination of build-to-rent (BTR) and build-to-sell.

“The council is keen to deliver build-to-sell, BTR, co-living and student to help create a mixed, diverse demographic,” says Joe Shorney, head of residential development sales at Savills in Birmingham.

Attracting new residents

Many homes will be occupied by young professionals – Birmingham has seen a spike in graduate retention thanks to the likes of HSBC moving to the city.

The council has pushed for family-sized apartments in other city-centre schemes such as Lendlease’s Smithfield market and developers think there is potential for something more intergenerational in Digbeth. For instance, Hub’s Damien Sharkey says it is considering senior living in its Digbeth scheme, which he says would create “a real mixed community”.

But none of the schemes mentioned above have spades in the ground, and there are concerns about their deliverability – particularly with a recession looming. 

“Digbeth’s been earmarked for this kind of development for a number of property cycles,” Joe Williams, associate, residential agency at Cushman & Wakefield says. “Other developments in the city might be achieving £400/sq ft, but values in Digbeth are untested.”

Once one development proves it can sell, he believes others will come forward.

The main commercial developments planned for Digbeth are: Mercian Studios, a £500m television studio complex with 1,000 homes masterminded by Peaky Blinders creator Steven Knight and developed by Nikal; The Gooch Estate’s 1m sq ft Typhoo Wharf; Salhia’s 250,000 sq ft Beorma Quarter; and Oval Real Estate’s refurbishment of The Custard Factory.

Start-up culture

According to Shorney, the city’s preference is for “developments that reflect the area’s start-up culture”. The Custard Factory currently houses 400 small businesses, making it the largest cluster of tech, digital and creative SMEs outside London. This has put the area on the map as a location where young businesses can flourish.

Many schemes are proposing space for the arts, too. “It’s about having flexible floorspace, ensuring we’ve got spaces for makers and creators as opposed to an office scheme,” says Sitch.

The exception is Beorma Quarter, which is being built in the part of Digbeth closest to the city centre. The Princes’ Trust moved into the first phase, a converted warehouse, in 2017, and a new grade-A tower is under way.

HUB_Bordesley Junction_Bordesley Brewing Co (shedkm architects + Uniform)

On the waterfront: new developments could give Digbeth the green space it currently lacks

“The offer in Digbeth is mostly fashionable, low-tech offices in former warehouses, but this is going to change things,” says Scott Rutherford, partner at Cushman & Wakefield. He thinks tech, marketing or forward-thinking law firms could take space.

Digbeth already has plenty of retail and leisure, but new developments are still coming. Art.quarter, masterminded by Birmingham entrepreneur Jordan Patel, is a mixed-use complex in a former warehouse that will include a gallery, food court, multimedia centre and fitness facilities among other uses, and aims to provide affordable space for independents and training for people in the local area.

“Digbeth has been a place where everyone’s said it’s up-and-coming – I think now we’ve arrived,” Patel says. 

Many planned developments are on land that has been amassed over the years to create large estates. If developers take a co-ordinated approach, this offers a big opportunity to improve connectivity and streetscapes.

The progress of the resi schemes will help clean up the area

Scott Rutherford, C&W

“Digbeth is in a state of transformation,” says Rutherford. “The progress of the resi schemes will help clean up the area and make it feel much more like its own quarter.”

Landowners Oval, Gooch and Homes England have published a Digbeth Vision, which focuses on environmental improvements such as opening up the area’s canals and making the street environment safer and more pleasant, suggesting a mid-rise, mixed-use format for new buildings. The council is also consulting on a new draft SPD for Digbeth, which should be published later this year.

“The critical mass of development means developers can really go at the public realm and improve Digbeth’s streets,” says Anthony McCourt of Court Collaboration.

At Stone Yard, it is opening up a thoroughfare that has been closed off for generations, and it will also soundproof all its apartments to ensure residential can co-exist with the area’s night-time economy.

“Digbeth is renowned for its music and indie economy and we don’t want to move that on,” McCourt says.  

HUB_Bordesley Junction_Canalside (shedkm architects + Uniform)

Like much of inner-city Birmingham, Digbeth is short on green space – and this is something the new developments could help rectify. Oval’s plans for the Custard Factory include a new public park along the Duddeston Viaduct modelled on New York’s Sky Line and Cole Waterhouse is planning a public park called Pumphouse Park.

Gentrification debate

Not everyone believes development will improve Digbeth, though. Some worry it will be just another area that is ruined by gentrification.

“One of the biggest fears is that Digbeth will lose what it is,” says Sharkey. “Locals have asked what will happen to creatives and whether they will be able to afford to rent space there. It’s a reasonable question.”

Developers talk the talk about staying true to its artistic roots and there are some early signs that they are walking the walk, too. Cole Waterhouse has employed Birmingham musician Jez Collins as the ‘cultural lead’ on Upper Trinity Street. After dialogue with locals, it decided to have three or four anchor creative tenants in its retail and studio spaces.

“We want to try and create a cool space for creatives, not just pricey places they can’t afford,” says Rod Priestley, its chief operating officer.

It’s important it welcomes people from all social backgrounds

Damien Sharkey, Hub

He wants the feel to be akin to Bermondsey Street in London. “What we will not have is Costa Coffee, that sort of bland, generic awfulness,” he says.

Most plans incorporate some kind of space for independent or creative businesses, but with many still in the planning process, it remains to be seen how much will materialise.

It’s not all about artists, though. Like many post-industrial inner-city areas, social deprivation in Digbeth and its surrounds is high. “It’s important we create a scheme that welcomes people from all social backgrounds and all walks of life. It shouldn’t just be for creatives,” says Sharkey.

This is also a key focus for Patel, who wants to use Art.quarter to provide training for local people in the retail and service businesses, as well as to bring together people from the hugely diverse range of communities that make up inner-city Birmingham.

“There’s a lack of culturally diverse space,” he says. “Birmingham is such a melting pot of cultures and races, but we haven’t found a space that brings it all together.”

Patel is planning a 24-hour prayer room in the complex, which he says will be the first in a retail space in Birmingham. In the city’s shopping malls, people are often forced to use changing rooms.

With the bulk of developments currently in planning, the next few years will be crucial in shaping Digbeth’s future.

One thing is certain: locals will be watching closely to see if developers’ promises of artist studios, affordable workspaces and an inclusive environment are kept.

Is building your own house set to take off in the uk?

Published in Property Week, April ’20Download PDF

Read in Property Week online here

Don’t let the popularity of Grand Designs fool you: the UK is lagging far behind the rest of Europe when it comes to people self-building or custom-building their homes.

Only around a tenth of homes are commissioned directly by the future occupant in the UK, compared with an average of 50% across Europe as a whole. In Austria, that figure rises to around 80%, and the Netherlands has a whole garden city, Almere, composed of self-build homes.

But in March, a new loan scheme was introduced in Wales that could help self-build finally start to gather momentum in the UK. Self Build Wales is a £210m scheme financed by the Welsh government and managed by the Development Bank of Wales that will provide loans to those wanting to build or commission their own homes.

So what does the Welsh government hope to achieve with this scheme, and will it really inspire more people to take the DIY approach to home ownership?

Under the new scheme, people will be able to borrow enough money to cover the full cost of the build, as well as 75% of the cost of the land, and will not need to pay anything back until the project is complete.

‘OVEN READY’

Sites will be provided by local authorities, which will sell them ‘oven ready’ with planning permission in place. The Welsh government claims that this is the first government-backed self-build scheme in the world to offer funding as well as sites that can be developed straight away.

“We’ve had self-build schemes in England and Scotland, but never as complete,” says Andrew Baddeley-Chappell, chief executive of the National Custom and Self- Build Association (NaCSBA).

One aim of the scheme is to open up self-build to a wider audience. When Self Build Wales launched, Welsh deputy housing minister Hannah Blythyn said self-build should not be the preserve of the most privileged households.

“As we work to increase the amount of housing available, this scheme will help people who wouldn’t normally think of self-build to consider it seriously,” she said.

It aims to do this by breaking down some of the common barriers faced by self-builders, including difficulties finding land, accessing finance and securing planning permission.

“Bringing planning, design, construction and funding together will open the doors to self- and custom-build for people who would not otherwise have considered it a realistic option,” says Cenydd Rowlands, property director at the Development Bank of Wales.

For many people, the first thing that comes to mind when they think of self-build is the grand, multi-million-pound modernist masterpieces that crop up on the likes of Grand Designs – but that is not what Self Build Wales is about.

“It’s definitely appealing to the general public”

Ifan Glyn, Wales director, Federation of Master Builders

Because local authorities will sell sites complete with planning permission outlining what can be built, buyers will not be able to go completely off- piste with their designs – so it is reasonable to assume that many of these will be ordinary family homes.

“It’s definitely appealing to the general public,” argues Ifan Glyn, Wales director at the Federation of Master Builders. “Among people who are looking to buy homes, the self-build concept is a popular one.”

The homes could be relatively affordable, too. The government says its scheme will offer a “route into home ownership for people who want to stay in their local area but haven’t previously been able to afford to buy there”, citing figures that suggest a self-built home costs 70% to 75% of the price of a traditional new-build, because there are no developer profits to factor in.

But as welcome as this funding is, self-build projects will barely make a dent in housing targets – so what is in it for the Welsh government?

Branding exercise

Baddeley-Chappell says it is partly a branding exercise. “People who are attracted to self- build tend to have a particular get-up-and-go ethos, and the government will want to show that there are opportunities that exist there, especially with the Welsh countryside, that are not as easily available in other regions of the UK,” he says.

The government also sees this as an opportunity to provide a boost for small and medium-sized builders in Wales, as these firms are most suited to taking on self- and custom-build projects.

“At the moment, more than 80% of homes in Wales are built by five plc companies,” says Glyn. “They are likely to build in more affluent areas around the M4 corridor, and are not particularly interested in the Valleys and more rural areas.”

Glyn also believes the self- build scheme could lead to better housing and more choice in those under-served areas – but he adds

that buy-in from local authorities will be crucial to the success of the scheme, particularly as the land put forward will be owned by them.

“They need to offer land where people want to be,” he says. “What you don’t want is for local authorities to see this as a way of getting rid of land that has been sitting in their local development plans for decades.”

Glyn is also concerned that under-resourced local councils may not be able to cope with the additional workload that running Self Build Wales might

incur, suggesting that some parts of the process may need to be outsourced.

“If [councils] are being asked to provide land and go through the planning process themselves, they haven’t got the resource to do that, and they’re not actually obliged to do it,” he explains.

’Potential limitation’

Baddeley-Chappell says the fact that only local authority land will be offered is a “potential limitation” of Self Build Wales, adding that there is “nothing to prevent it being expanded to allow other landowners to bring forward sites”.

As it stands, 24 sites are currently being advertised on the Self Build Wales website. Three are listed as being in the planning process – none are yet open for applications.

“Given how much the UK has to learn about self-build, this is a scheme that will start small, and it will take time for the homes to start coming out of the ground,” says Baddeley-Chappell.

“In the long term, the aim is for it to make fundamental changes – but it will take time to accelerate.”

Launched at the start of March, and with the housing market effectively shut down for the foreseeable future due to Covid-19, the Self Build Wales scheme still needs to prove itself – but the general consensus is that it is a positive first step for potential self-builders.

“I often criticise the Welsh government for not governing with any imagination, and you can’t say that about this,” says Glyn.

The UK is still a way off from having its own self-built garden city, but this scheme is as good a starting point as any.

hunters series review: Al Pacino hunting Nazis makes for gripping lockdown fodder

Published in City A.M. March 2020Download

Read on City A.M. online here

If you’re looking for a nice, cuddly box set that you can watch half-comatose under your anxiety blanket as the world unravels around you, Amazon Prime’s latest big-budget series Hunters probably isn’t for you.

It’s about Nazis, for one thing, and someone gets shot in the head approximately once every three minutes. Set predominantly in 1977 New York, it follows a group of vigilantes who are on the hunt for Nazis who escaped justice after World War Two, and are hiding in plain sight as they plot to bring about the Fourth Reich.

As the group pick off their individual targets, a wider plot is revealed which puts the whole city in danger.

Al Pacino puts in an unexpected turn as the deceptively kindly Jewish patriarch at the head of the Nazi-hunting operation, but he doesn’t outshine the relative unknowns taking on the other leading roles.

This is a true ensemble cast, and part of the fun is unravelling the backstories and motivations of each member of the rag-tag crew – not all of whom are Jewish – as the series moves along.

Flashbacks to Auschwitz and Buchenwald provide the stark emotional backdrop to the action scenes, reminding us that this might be bad-ass arse-kicking, but it’s bad-ass arse-kicking for the good of humanity.

Hunters is also peppered with surreal, comedy vignettes where the characters re-enact a retro commercial or dance to a disco track for a couple of minutes, some of which are a little awkward, but you have to fill the time between people getting shot in the head somehow.

It’s not exactly one for the ages, but you’ll be gripped by the end of the first episode and the ten hour-long instalments will keep you occupied for many a lonely lockdown eve. Well, at least two.