CBRE’s market research shows that while just over 50% of North West Local Authorities have a sufficient supply of employment land, most areas of the North West have a deficiency of certain types of employment space. The leading real estate firm queries, if many Local Authorities have a suitable amount of employment land, then why is certain demand not being fulfilled within the North West?
Harry Bolton, Associate Director of Planning at CBRE Manchester, comments, “Our analysis suggests the issue may well lie with the way in which Local Authorities analyse and assess employment land requirements, through the preparation of an Employment Land Review.
“Employment Land Reviews typically assess how much land is available, what type of employment use it accommodates and how well it scores using criteria such as location, quality of accommodation and site constraints. However, when it comes to assessing projected demand, the focus tends towards ensuring that a suitable quantity of land is available to fulfil the existing and projected needs of an area without a clear understanding of the implications of those needs. Is this why we end up with a supply of land which is not suited to the requirements of the market?”
CBRE claims the critical issue is to drill down into the detail of projected demand and to seek to understand how that demand will translate into land requirements. To ask questions such as; Where are the market pinch areas? What is the nature of demand within each use? And critically: How does this impact upon projected requirements?
Steve Capper, Associate Director of Industrial Agency, continues; “Sites which are available are in reality not always commercially viable. Market demand is fundamentally driven by the requirements of the occupier which are often overlooked when analysing the availability/suitability of sites.
“Developers will traditionally view an opportunity in respect of demand profile, which if not strong enough, will prohibit development. Furthermore there are a number of sites which are listed as suitable but which are significantly constrained (through site contamination or quality of stock etc.) which again can deter development. As with occupiers, developers are likely to target more popular and established employment locations which provide less development risk.
“The typical profile of such locations incorporates access to the local, regional and national motorway networks due to costs of road transportation, workforce and demographics will also be a factor in respect of skills, costs and availability. Occupiers and developers will often review the ease of commute focussing upon public transport links, congestion, cycle routes and parking provision.”
CBRE concedes that it is by no means straightforward to project the specific nature of future demand, but suggests that by adopting the following assessment and monitoring criteria, demand–related issues can be better identified. Suggestions include; Clearly establish the market area, thoroughly assess existing demand and emerging / future trends, consider how these trends will translate into requirements for land, compare this against the available supply to establish the nature of the future requirement – where are the potential gaps? How could these gaps be addressed? This could then be followed by ongoing and active monitoring of market demand to ensure a pro-active rather than a reactive approach.
Harry Bolton concludes; “Now more than ever development land within many parts of England and Wales is at a premium. A significant demand for suitable housing land (and in particular for brownfield sites) in turn, puts pressure upon land availability for a whole host of other uses. It is therefore more important than ever, that land is utilised efficiently. Is it time to refine our approach to the assessment of employment land?”
