Business parks - where do we go from here? With availability of space at business parks now at its highest level in over 14 years, Charlie Toogood from GVA wonders whether we are seeing the death of the business park - or could the model reinvent its offering to meet the requirements of the modern occupier?
At the time, the type of space offered at the new-fangled business park was perceived as cutting edge, offering the new generation of ICT companies modern, adaptable and efficient space within a green environment, close to the motorway.
It was during this period that companies such as Oracle, Logica and Vodafone relocated to parks within the region. However, the popularity of such accommodation among the wider market was always in question, with some property experts predicting failure in the business park model as early as the midnineties.
The collapse of the dot-com sector in 2000 and resulting ICT and new tech downturn, signalled the beginning of the end for the faithful business park as we had known it. With ICT accounting for the majority of occupied space, demand imploded.
A year later came the global disaster of 9/11, resulting in further negative sentiment in the economy and international markets as a whole. As a response to the turmoil, the new tech sector began to migrate back to city centre locations, which offered the essential connectivity, infrastructure and access to a wide range of vital amenities needed to kick start growth.
Even 10 years on, the business park market remains largely subdued, having never really recovered from the downturn in 2000 and 2001. According to GVA Grimley's latest Business Parks Review, which monitors office space supply and demand on the UK's business parks, the lowest level of take-up in 14 years has recently been recorded, as well as the highest level of availability. In particular, the Midlands region continues to experience weak demand with a huge oversupply of vacant space and development land.
Whilst a churn of smaller deals at Binley Business Park in Coventry, Birmingham Business Park and Blythe Valley in Solihull has been concluded this year, there have been no headlinegrabbing lettings.
With current availability and the overall vacancy rate rising year on year, the fact that availability across the UK is now above the level reached after the dot-com collapse of 2000, confirms all is not well.
With this in mind, if we are to consider business parks in the light of today's town planning and sustainability requirements, it is questionable whether there is a future for the park at all. So where do we go from here? The future fortunes of the business park model will undoubtedly be influenced by economic issues such as growth in the private sector. In particular, the performance of sectors such as automotive, telecoms, technology and pharmaceutical firms that currently dominate the demand for office space on the UK's business parks.
But these form only a small part of the picture given the huge oversupply faced by the Midlands alone. To change the demand picture, the key factor is flexibility, if the business park is to be repositioned and interest reignited in existing stock.
The future success of the business park model could be achieved in part if more flexibility in use was provided to attract other sectors. For example, change of use of surplus plots to residential, motor trade and hotel would drive land values and development receipts for reinvestment and create critical mass in developed buildings and surrounding public space.
Re-emergence is also linked to a strong amenity offering which is increasingly being demanded by occupiers. A vibrant mix of retail, leisure and restaurants within a park will significantly improve vitality and sense of place. A good example of this working well is Wolverhampton Business Park, which has seen a number of recent lettings despite the downturn.
The other crucial factor to consider in the re-emergence of existing and third generation business parks is connectivity.
Looking to the green agenda, linkages with public transport need to play a huge part in this success. Such connectivity has been greatly improved in some areas, such as Apex Park in Worcestershire, which is regularly serviced by the local bus network and benefits from its M5 position.
Looking to the future, the success of the business park model lies predominantly in location. Edge of city sites provides an ideal position to attract occupiers that can benefit from the central amenities, transport links and infinite parking provisions within close proximity.
Within Birmingham, Eastside provides the ideal canvass to develop a new wave of next generation business parks and shake off the low rise, uncool image that was borne out of the late 1980s.
Charlie Toogood of GVA wonders if we are seeing the end of the business park as we know it, if the model reinvents itself
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|Publication:||The Birmingham Post (England)|
|Date:||Nov 11, 2010|
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