property advantage west midlands issue 25

–– MAILBOX SALE DELIVERS GOOD NEWS–– NEPTUNE SIGNS NATIONAL BRANDS AS WOLVES SCHEME PROGRESSES

PropertyAdvantage

Property AdvantageWest Midlands Editionwww.propertyadvantage.infoIssue 25

YOUR GUIDE TO REGIONAL PROPERTY,REGENERATION AND DEVELOPMENT

From your Editor, Ian Halstead CBRE’s research indicating how badly the government has failed to sell its localism legislation to local councillors is no real surprise, given the coalition’s apparent preference for ‘big ideas‘, rather than detailed and robust strategic announcements.

However, it has to be hoped that it belatedly explains its thinking on the sell-off of RDA assets.

An administration which can switch from one long-accepted measure of inflation (RPI), to an index which fails to include mortgage payments or housing costs (CPI) to slash billions from public sector pensions appears long on financial logic - if rather short on compassion.

At least given the size of the public sector debt though, it could be argued that such a decision was essential, and not merely Machiavellian.

The case for selling off the assets of Advantage West Midlands and the other RDAs, is much harder to make.

Property Advantage is conceived, designed & produced for you by:

Open Box Media & Communications32–35 Hall StreetBirmingham B18 6BS+44 (0) 121 608 2300www.ob-mc.co.uk

Contact.Samantha Skiller [email protected] Stuart [email protected]

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Editor.Ian Halstead [email protected]

NB: The Publishers wish to emphasise that the opinions expressed in Property Advantage are NOT representative of Open Box and accept no responsibility for the views expressed by our contributors.

InsideAdvantage

Cover image.The disposal of Birmingham Development Co’s Mailbox for a shade over £127 million to Brockton Capital, in partnership with Milligan, was certainly well-received. A final price-tag some £9m above the asking price suggested the market was heading in the right direction, and if debt-laden Ballymore finally offloads the second phase of Snow Hill there will be more cause for optimism.

It’s impossible to square the coalition’s repeated statements that asset disposals will achieve the best outcome for the local area, and the optimum result for the public purse.

We’re told the sales will be at ‘market prices’, but would that be the market in 2008, or 2011, or at a theoretical future point?

If the assets are sold in a flat market at rock-bottom prices, then surely the only long-term winners will be speculators, and certainly not the local area.

Equally, if the body disposing of the assets decides the prices on offer are too low, then are the locations simply boarded up, until conditions improve?

And if the sites then simply languish, outside the scope of the new Local Enterprise Partnerships, and unable to generate value for the local area, or the region, who does that help?

At the moment, in common with many of the coalition’s major initiatives, there remain far more questions than answers.

Yours,

Ian HalsteadEditor, Property Advantage

Content 04 Sustainability. – DTZ team think waste matters. – New life for Spectacle Works. – Dilemma for English Heritage. 10 MIPIM. – New mindset reaps its rewards. 12 Property People. – GT’s Davidson helps out the banks. 18 Wolverhampton. – St Mods & Neptune make waves. 22 Urban Regeneration. – Roadside assistance pays off. 25 News & Deals. – Localism gets thumbs-down. – All go for Eastside schemes. – Round completes City return.

Property AdvantageWest Midlands

Issue 25www.propertyadvantage.info 03Content

Waste research wins plaudits but has it a future?

“As far as I can see, Birmingham & Solihull Local Enterprise Partnership has completely ignored waste. Not one of its proposed projects even mentions the subject, and it does make you wonder what will now happen at local and regional level,” he said, with evident disappointment.

“Some local authorities are looking at waste management, but their ideas for treatment sites are so big and so specific, that they will have to draw in waste from other regions. This really is one of those issues when you have to take a regional view, so it should be on the LEP‘s agenda.

“AWM was ahead of all the other RDAs on this issue, and we know the methodology has wider applications because we’ve used it to look at other technologies, outside this region. The low-carbon agenda is hugely important, so we can only hope that this lead isn’t lost.”

Diverting waste from precious landfill sites poses major questions for all developed countries, but an intriguing project spawned by Advantage West Midlands has generated some of the most important answers.

The RDA’s focus on the low-carbon economy saw it bring in environmental specialists SLR Consulting, and property advisers DTZ , to discover where ‘hot spots’ for waste infrastructure existed in the region.

AWM hoped that the new ‘tool’ would be able to identify and analyse potential locations for major waste treatment and recycling plants, to enable developers and planners to operate more efficiently and precisely.

The venture was so successful that it won a national award, in the spatial strategies category, at the Royal Town Planning Institute’s (RPTI) annual prize ceremony, as DTZ associate director, Richard Howard, explains.

“There have been several policy documents from the government saying that energy and waste issues should be addressed at the regional level, which makes much more sense than trying to tackle this through individual local authorities,” he said.

“AWM commissioned a report about waste treatment capacity and landfill, which predicted that if nothing was done there would be a huge lack of capacity by 2015, so they set up a waste treatment advisory group to identify possible solutions.

“We were brought in, with SLR, to build a tool that would allow all the best potential sites in the West Midlands - of between 10 and 40 acres - to be ranked, because the private sector was finding it increasingly difficult to identify suitable locations.

“These sites wouldn’t be for household waste, perhaps for waste-to-energy plants, and of course, they would be hugely important for investment and employment. AWM‘s idea was that it would create a data-base of information which other regions didn‘t have.”

Richard and his colleagues collated data from every source they could find; ranging from water quality and transport infrastructure, to flood risk predictions and the presence of sites of Special Scientific Interest.

“Finally, we had about 50 different criteria, so we then did an ‘open call’ for sites by contacting local authorities, development agencies, landowners, and other bodies across the region,” he said.

“We began with a long list of about 400 potential locations, which was narrowed down to fifty, and then we visited each one to judge the lay of the land, to test the access, and to see if any other local influences which might affect future planning applications were evident.

“We ended up with about 30 sites, which by all criteria were the best in the West Midlands, and then passed on the tool to AWM, which then handed it on to the Waste Resources & Action Programme (WRAP) at Longbridge.”

The RPTI judges were clearly impressed by the quality of the research, and its potential importance. “The approach brings a clear and consistent methodology that helps to breed confidence in the planning process,” said the statement accompanying the award.

“The quality of the professional work involved in the development of planning concepts, implementation of the analysis and formulation of the strategy has been excellent.”

The only puzzle is that WRAP doesn’t appear to wish to discuss the project, and Richard has wider concerns.

Property AdvantageWest Midlands 04Issue 25

www.propertyadvantage.info Sustainability

Midland Heart eyes up city’s live-work market

“Over the last two years or so, we’ve been approached regularly by developers, about our interest in locations where they had previously thought of apartments, but were now wondering about live-work space.

“However, when our partners suggested this particular opportunity, we did our research, and agreed that it looked ideal.”

Carl concedes though that assembling a funding package to bring the Spectacle Works forward was a complex process, with a build contract of £1.9m, and a final development cost of £2.38m.

“We bought the building in December 2009, when the HCA was trying to stimulate the residential market, and there were quite a number of projects on the starting blocks, some of which did not eventually proceed.

“However, they identified this scheme as strategically important, and agreed with AWM and Urban Living that it was important for employment, as well as residential, reasons,” he said.

Birmingham’s Jewellery Quarter pioneered the live-work concept more than two centuries ago; albeit only because the workers were too poor to live elsewhere than above their workshop.

However, it does feel right that the city’s newest scheme combining living accommodation with work-space should come forward in the area, and that the Midland Heart-led project is targeting start-up ventures by jewellers, designers and others with craft skills.

The Spectacle Works nestles inside the former Lessar Brothers factory, in Hylton Street, which was built during the 1920s, although it does retain elements of the site’s original Victorian building, and has a Grade II-listing.

Originally a jewellery factory, the building was acquired by the Lessar family in 1933, and made spectacles until the business closed ten years ago.

The scheme, which cost just short of £2.4 million and offers 13 apartments and workshops of varying sizes, was built by the Birmingham division of Seddon Construction, and funded by AWM, the Homes & Communities Agency (HCA) and Urban Living.

Midland Heart acquired the building in 2009, having considered the location ideal for its latest live-work venture, following ones in Coventry and Stoke-on-Trent.

Carl Larter, the housing association’s director of new business and development, is convinced the scheme will make a strong and sustainable addition to the group’s property portfolio.

“There is a debate about live-work space, but we’re comfortable that there is a demand, if it’s in the right place, if it’s of the right quality, and if the price is right,” he said.

“We know this type of accommodation requires very intensive management, and so we’re very selective about taking on new schemes.

“There were a few wobbles along the way, especially with AWM, but Paul Spooner (the HCA’s regional director) was a breath of fresh air. He is obviously very passionate about what he does, was very receptive to the project, and always looking for creative solutions.

“It would have been easier and cheaper to have built the scheme from scratch, but it’s enjoyable to bring a nice building back to life, and it’s good for enterprise that these units are now available.”

Competitive rents and a low service charge have stimulated interest, as has the range of options, with one, two and three-bedroom apartments available, and Carl says three designers have already signed up, with another trio of lettings under discussion.

“We have a live-work specialist in-house, who is responsible for all three of our schemes, and they are both talented and very enthusiastic. Obviously, the economic climate is more difficult than three years ago, but we’re still very confident that the demand is there.”



Dilemma looms large for English Heritage

“Birmingham Conservation Trust planned to put new business units into the site, along with a heritage interpretation centre, and Advantage West Midlands was a major supporter, but unfortunately, the funding was a victim of the cuts.

“A much reduced scheme has been drawn up, and we and the Heritage Lottery Fund have offered grant aid, and hope this will be sufficient to allow the scheme to go forward.”

So could the Newman Brothers’ project, or other schemes, be tweaked to attract external support?

“We know we need money from the private sector, but there is always a balance between wanting to preserve something of historical and architectural importance, and accepting newer uses,” said Dr Lewis.

“As a general rule, we and other conservation bodies don’t look at the ‘façade schemes’ we saw during the 1980s. We still believe you lose a lot of information about a building’s internal layout and original use, if only the façade is saved.

Britain’s industrial revolution was spawned in Shropshire, and the region’s role as the country’s manufacturing heartland has left a rich and proud heritage.

For English Heritage though, as the appointed guardian of Britain’s architectural assets, protecting and preserving the past is always demanding, especially when commercial pressures challenge conservation.

In the post-recession era, the new challenge is to find private sector support as public sector sources evaporate.

In April, EH began identifying which industrial assets needed to be preserved, protected or repaired, in the latest phase of its ’Heritage at Risk’ campaign, which will present its findings in October.

Dr Sarah Lewis, one of the organisation’s Birmingham-based historic environment advisers, says it does seek to find a balance between conservation and development, despite the perception of critics that it would rather see historic buildings decay than see them converted for commercial use.

“We need to understand what sites need to be preserved, where the funding gaps are, and what our priorities should be. Our budgets have been severely cut, so we need to learn from best practice, and to build partnerships with the people that can make things happen.”

Does that mean EH might seek to establish closer ties with private sector bodies and developers?

“We can take a different approach to sites which need to be adapted, and re-used. However, if a particular property is unusual and rare, we might take a different attitude,” said Dr Lewis.

”It’s different in rural areas, but in urban locations, there‘s usually more of a trade-off, where buildings may have been redundant for years. If a building is relatively common, you might accept more change, but on a rarer one, you’d hold out for less change.

“It may be we’d allow a higher level of intervention to bring some sites back to use, and we do try to be flexible. We might, for example, encourage owners of industrial buildings to develop a site themselves, or to market it for development.”

Her words contain promise for the property community, but how might such a mindset work?

“The Jewellery Quarter is a very good example of the ongoing issues. There is a pressure for residential conversions, but with that comes loss of heritage. In the past, we’ve worked well with the city council, and I’m sure we’ll continue to do so,” said Dr Lewis.

In Fleet Street, an EH project is underway to restore the Newman Brothers works, which produced coffins, brass-plates and shrouds, and was so famed that it created a coffin for Queen Victoria.

The site will ultimately display a metal-working factory from the 19th century in its original glory, but Dr Lewis points out that the project was not intended to stand in isolation.

”Equally, we don’t like to be seen as an organisation that always says ’No’, and during times of low economic activity, there is pressure to find new uses for buildings, which is why the ‘Heritage at Risk’ research is so important.

“We need to identify examples of best practice, where industrial sites have been brought back into use, and to make others aware. The canal basin in Stourport, for example, was in a very poor state, but the council and British Waterways carried out an excellent restoration scheme.“

Indeed, but none of the public sector bodies involved now have the financial capacity to proceed with similar ventures, making the winning of hearts, minds, and financial backing from private sector sources even more critical.

“We know we have to be pragmatic about development proposals, but at the same time, they have to be conservation-led,” said Dr Lewis.

“It will be interesting to see how the new planning regulations work though. If permission is no longer needed to develop industrial buildings for residential use, we should see more of these buildings converted, and there will be exciting opportunities to preserve our industrial heritage.”



New audience for Birmingham’s story

Marketing Birmingham’s commercial director, Ian Taylor, says the city’s delegation to April’s conference focused on achieving tangible returns on its investment, and generating solid leads for the months ahead.

“I thought it was a very good event for Birmingham. We saw a strong level of interest in our story, partly because we had more engagement from the private sector, and also because we had spent time deciding what to say, and what themes to address,” he said.

“The conversations we had were very focused. It wasn’t a time for launching schemes, but for explaining what progress had been made on projects which had been presented at previous MIPIMs - such as the new library - and for trying to sell a vision of our city.

MIPIM was once seen more as an annual jaunt to the sun and sea of Cannes, than as the world’s biggest property event, but recession saw that mindset fade faster than a spring tan.


Issue 25www.propertyadvantage.info 10MIPIM

“Their support typified the backing we received from the private sector, which I am told was the best a Birmingham delegation had ever had. Keepmoat and Carillion were also there, alongside us, as was Birmingham Science Park - Aston, from the public sector.

”We have developed a joined-up approach to major events, through our experience of hosting political conferences, and tried a similar approach to MIPIM. The organisers, ReedMidem, delivered a much tighter show than previously, focused on value not volume, which we appreciated.”

So, how can the success of the Birmingham strategy be judged, and what results are expected in the short-term, and further ahead?

“It is a platform on which you can establish and manage your reputation, and we gained something like £500,000 of positive media coverage during and immediately after the event,” said Ian.

“We are now following up all the conversations about business development which we had at MIPIM. One of the side-effects of recession has been a greater sense of focus, so we found that many delegates shared our view about generating a return on the investment we had all made to attend.

“We did a lot of pre-show marketing, to make sure that the right people would there, and also spent a lot of time trying to reach people from outside Birmingham, and from outside the region. We developed more than 1,000 contacts at MIPIM, and well over 50% were from outside.

“What we didn‘t do was simply turn up, and hope we might bump into a few people. The follow-up process is very much about having conversations with individuals, because each will be different, and we’ve also debriefed all our partners, to understand what they achieved, and to share what we achieved.”

“We also wanted to establish a broader landscape, so thought leadership was important. Our core theme was Birmingham’s regeneration, but that is by definition a long-term activity, so we also highlighted the latest investment in the city’s retail sector, especially the new John Lewis store.”

Transport was another key theme; including the city council-led ‘Vision for Movement’ strategy, plans for a network of fast trams, under the ‘Birmingham Sprint’ brand, and the mooted arrival of HS2 in Eastside.

“Any city which can demonstrate that it is putting very significant sums of money into sustainable transport systems, and defining its requirements for the long-term, will attract interest from potential investors,” said Ian.

“Retro-fit for homes was another issue on which we demonstrated what Birmingham wanted to achieve, and Willmott Dixon’s national specialist on that subject - David Adams - spoke at two events for us.


Issue 25www.propertyadvantage.info 11MIPIM

Panther gets its claws into the city council

“We do not recognise, or accept, the claims about changes to regulations causing a further wait of a year to obtain approval.”

Panther’s statements to the City have long been well-known for Perloff’s intriguing asides and anecdotes, usually unrelated to the development industry, or the property market.

April’s contained vivid references to George Best, Hitler, Churchill, Stalin and JFK, and it was equally no surprise to see a request that shareholders approve a £25,000 donation to the Conservative Party.

Quirky property investor Andrew Perloff has launched a broadside at Birmingham City Council, after winning permission for a £100 million mixed-use scheme at Holloway Head.

Both sides agree that approval for the complex 450,000 sq ft proposals, which include 300 apartments, 100,000 sq ft of offices, a hotel, casino, restaurant, and even a new HQ for the local Girl Guides, was delayed.

In March though, the outline application was granted, and it seemed that Perloff’s quoted vehicle, Panther Securities, would now begin the search for a development partner to help bring the scheme forward.

However, when Panther issued its year-end results just before the Easter weekend, the veteran chairman and CEO couldn’t resist having his say.

“Almost a year ago, our scheme application had to be withdrawn as the planning officer had insufficient time to prepare her report,” wrote Perloff.

“Of course, new regulations came in and various minor changes had to be made, which meant waiting another year to obtain approval.

“As always, the developers and local community suffer most. Birmingham suffering more than most, under their politically correct - yet management incorrect - style of government.”

Understandably, his comments brought a swift response from the council.

“The application was initially submitted in a form that we could not support, because it did not comply with our policies and guidelines for the area. The applicant was given the option of withdrawing their plans or face refusal.

“The application was then resubmitted, and the council pulled out all the stops to ensure it was dealt with inside the 13-week time limit.”

“This uneasy coalition will only last until it is obvious that our country has stepped well back from the precipice of bankruptcy, whereupon the coalition will fall apart, and we will all be at risk of the old bunch of spendthrifts taking over the country’s finances again,” wrote Perloff.

However, leaving aside his eccentric comments - headlined on Panther’s official release to the London Stock Exchange as ‘Chairman’s Supplementary Ramblings’ - there is no doubt that the plc turned in an impressive set of results, with pre-tax earnings more than doubled to £6.4m.

It’s less clear though, when the Holloway Head scheme might progress.

“The development site is about 85 per cent owned by us, the majority of the remaining area is owned by the Girl Guides Association, and we have agreed to provide a new, larger and more suitable headquarters as part of the scheme,” said Perloff‘s statement.


www.propertyadvantage.info Property People

Mike & his team look to rescue those in distress

It certainly makes sense for advisers to bring in specialists with development expertise to advise how value might be identified - and extracted - from schemes which fell foul of recession.

Equally, after 25 years in construction and property, Mike looks ideally placed to make such a move to the professional services sector, but how did his journey begin?

“I was a quantity surveyor with a professional practice, then joined the special projects division of Wimpey Homes, in the last recession. They did a lot of social housing, on urban renewal and brownfield sites,” he recalled.

“I became a project manager, which was essentially the contact point between the housing associations, and Wimpey. I did that for several years, but when the housing market began to pick up, I joined Crosby Homes.”

It was 1999, the boom in city-centre living was well underway, and his new employer had already underlined its credentials as a pioneer of the sector, with its Symphony Court scheme.

“I was using the same skill-set as previously, but the product was Rolls-Royce, rather than a Mini. After two years, I became involved in land-buying, on the Watermarque and the Sheepcote sites, and came across Steve Byrne, at MCD, and he invited me to join them,” said Mike.

“The attractions of working in that kind of private development environment were obvious, and I started by looking after their professional team, on the sales and marketing side, and also became involved with site finding and raising finance.”

After three years, Mike decided to try the development game first-hand, and co-founded ‘Urban Cube’, backed by one of the region’s wealthiest entrepreneurs, Shropshire-based Keith Bradshaw, best known in the property community for his Nurton Developments vehicle.

“We had three sites; one in Stafford on a former bus depot, and a couple of ’plain vanilla’ residential schemes, and the idea was to build resi on redundant pub sites, with a price point of £120,000, for a two-bed apartment.

“The really sexy scheme was Riverside Walk, but it was complex. The land was next to the river, so there were access issues, and ground contamination from its time as a depot. It was a nice-looking scheme though, which I’m still really proud of, along with King Edward’s Wharf.

“I worked at Urban Cube for the best part of three years, but then found myself in limbo. The market was so hot that selling land had become harder and harder. We looked very closely at a scheme in Knighton, had the funding, and were about to do the deal, but then Northern Rock happened.



“We were seeing developments start to fail, so we put together a proposition to do distressed property, and pitched the idea to Grant Thornton, because they were the second largest insolvency outfit, and a couple of years ago, we started this team.”

The projects currently passing across Mike’s desk range from a former dye works in Derbyshire, to one of Liverpool’s newest landmarks, Beetham Tower, which towers almost 300 feet into the Merseyside skies.

“The dye works looks straightforward, even though the site is 20 acres. The developer is in administration, and we will re-plan the scheme, resolve the contamination issues, and then in perhaps 18 months, get permission for residential units,” said Mike

“The Beetham Tower is more complex. We’re working on behalf of the bank, and trying to identify what might be the way forward. We’ve sent agents along to analyse the local market, and we will then report back on options.

”At one extreme, the scheme could be mothballed, at the other, there could be a fire sale, but I suspect the sensible solution will be somewhere in the middle.”

Often though, Mike and his colleagues are called in before schemes have collapsed, in an attempt to keep them out of formal insolvency.

“In most cases, we’re trying to rescue projects, so my job is to highlight risk, in construction or development terms, although I also have a forensic role.

“The banks might send me to a scheme, to meet a developer, and then to come back with the real story. Sometimes, it is a really nice surprise, when everything we are being told appears to be true, and we have a viable proposition.

“Sometimes though, it is a whole can of worms. You find a small problem, and follow the paperwork, which then reveals more legal and technical problems. Then we have to crawl all over the development, and report back to the bank.

“On occasions, we find that the money from the banks has gone missing, so we call in our forensic accounting team to track it down, and sometimes our VAT people and our CGT (capital gains tax) people get involved.“

As more schemes come the way of Grant Thornton’s distressed property team, its role has gradually broadened, and Mike admits problems have sometimes arisen because banks have been slow to make the call for specialist assistance.

“We had a case two years ago, and by the time we were involved, there were ’ransom payments’ being paid of £150,000. Had we been brought in three months earlier, that problem would not have arisen, and it might have cost £20,000 for site security.

“It is a lot easier for someone with development experience to identify issues, and gradually,lenders have recognised what needs to be done and when, so many more stalled schemes are now being completed successfully as investments.

“At the moment, I’m only looking after one half-completed scheme, where I’m acting as project manager, and also as sales and marketing director, but normally, I’ll be running several schemes, with several hundred resi units, at any one time.”

So, how does Mike see the development landscape in the next year or so, as the economic recovery continues to be fragile and uncertain?

“I think there will be more casualties, especially on the commercial side, during the next 18 months, because resi was the first part of the market to collapse, and as the number of those schemes start to tail off, others will come along.

“Identifying what went wrong can take a long time though. On some schemes, we have uncovered large-scale mortgage fraud of which the banks were unaware. It starts with a bad smell, but by the time you’ve identified and unravelled the fraud, months have passed.

“I wonder what will happen to a lot of stuff we have sold for the banks. Do the new investors have an exit route planned, or are they just buying what they consider to be undervalued assets?

“I think we can even look ahead as far as 2018, when we could see a lot of shared equity schemes coming back to the market, because the original buyers can not afford, after the first ten years, to move further up the ‘staircase‘ towards ownership.

“I’m no pessimist, but there are problems ahead, and they won’t be resolved just because life gradually comes back into the property market.”

Mike Davidson is a manager in Grant Thornton’s Birmingham-based ’distressed property’ team. Ian Halstead sees what he does, and how he got there.


Issue 25www.propertyadvantage.info 15Property People

We have recently been instructed on a new build visitors centre for one of the larger National Trust properties, for example to demonstrate our all round abilities”.

There is a RIBA honour for its work at The Crown Inn, Playhatch, Henley on Thames; a Local Building Authority Built In Quality Award for its design of the Asda superstore in St. Matthew’s Quarter, Walsall; and a Southern Staffordshire Design Award for its conversion of the 12th century St. Thomas’s Priory in Baswich, North Staffordshire;

BHB Architects are dedicated to saving old buildings for posterity, but also committed to using their architectural skills to ensure that new ones will stand the test of time.

The Practice is multi-award winning and based in Lichfield, and they have demonstrated consistently that the use of intelligent and sensitive design ensures that some of the nation’s most treasured buildings will be enjoyed for generations to come.

History plays a vital role in this practice. As specialists in the repair, alteration and extension of historic buildings – particularly churches – it has rapidly gained a reputation for its conservation work which now accounts for over half of its projects. These also include educational facilities and commercial projects, particularly those for challenging, multi-use sites.

The practice acts as church architects to over 300 churches throughout the region advising on restoration, repairs, reordering and new build schemes.

BHB have completed work with grant-finding bodies such as English Heritage, the Heritage Lottery Fund and the Architectural Heritage Fund and is on the Royal Institute of British Architects’ (RIBA) Architects Accredited in Building Conservation register. Director with the practice Andrew Hayward commented “Our practice has a great reputation for good design and working with historic buildings but we also win awards for our new build designs.

The Practice believes firmly that you cannot design something that will fit into more than one place. They believe that every time you add or alter an historic building, it has to remain a good neighbour’. But even historic buildings can be brought into the 21st century.

They also are proactive in their desire to embrace and promote environmentally aware design to their clients. Andrew went onto comment...” Green issues are having an enormous impact in the way that Architects work. Sustainability is key to any project... However some green technologies are still in their inception and are expensive to implement, so there has to be a commercial reality to all of this: it has to be deliverable and possible to do within the budget.”

The 35 strong practice has been established in a variety of guises for over 65 years, but for the vast majority of this time, has occupied the same converted Georgian Town House offices. The building, which sits impressively within the historic street scene, has been subject to many alterations and extensions over these years to house the diverse activities going on within, it is however difficult at first glance to see any trace of these changes... surely a visible testament that BHB Architects practice what they preach.

Sense of history is catalyst for BHB’s success



Full steam ahead for St Mods as Neptune nets first tenants

Neptune Developments expects to hand over the city’s new bus station to Centro in May, and is also on the cusp of signing two national brands to kick-start the retail element of its massive mixed-use scheme, which is bordered by the canal, and the West Coast mainline station.

Recession may yet impact on the final scale of the project, but for the moment it’s the biggest in Wolverhampton’s history, and within sight of £180 million.

Meanwhile, barely a mile away along the Stafford Road, equally significant progress is being made on the first phase of a £150 million scheme, on the 88-acre Goodyear site.

The city council has granted detailed permission for 314 homes, which will be brought forward by a joint venture between the regeneration specialist St Modwen, and the country’s biggest housebuilder, Persimmon plc.

Neptune is well underway on a refurbishment of the station’s original ticket office, the listed Queen’s Building, and the construction of the nearby Building 11.

“When the old ticket office is ready, we’ll have 2,500 sq ft of space which will be a single letting. Negotiations are well advanced with a national retailer, and we expect the deal to be in legals shortly,” he said.

“On the other building, Unite will relocate from their previous space in the original ticket office, and we’ll have about 4,000 sq ft on the ground-floor. It’s under offer at the moment, and will be taken by one of the country’s biggest supermarket brands , says MD Steve Parry.

Wolverhampton has always been rather light on landmarks - unless you‘re a devotee of the men in old gold and black, of course - but its two most distinctive urban areas are both undergoing long-awaited renaissance.


www.propertyadvantage.info Wolverhampton

Steve says the former is likely to have a footprint of about 18,000 sq ft, and the latter of around 15,000 sq ft, but a decision needs to be taken on whether they will have two, or three, storeys.

“We may be able to have the application ready by late-summer, but if not, it will go in in early September,“ he added.

The space due to come forward may not appear significant by the standards of Birmingham, Coventry or other major regional cities, but Wolverhampton has been a development wasteland for so long, that interest is higher than predicted.

“It seems that people are coming out of the woodwork because the scheme is proceeding, and there appears to be a higher level of latent demand than was anticipated,” admitted Steve.

“The footfall figures in the area certainly stack up for retailers. Centro calculates that something like 13 million people use the bus station each year, and Network Rail tells us that around three million use the train station.”

The original pre-recession proposals for the sprawling site include a new multi-storey car park, to replace the tatty existing structure, and a sleek modern train station, but both remain in limbo at the moment.

“We will also have between 11,000 and 12,000 sq ft on the second-floor, which several potential tenants have looked at, and we’re not far away from reaching heads of terms.”

Neptune and its partners, including the city council, will then begin gearing up to put planning in for the next phase, Buildings 9 and 10.


Issue 25www.propertyadvantage.info 19Wolverhampton

“The funding which our partners planned to make available has obviously been affected by the public sector cuts, but we are in discussions as to how we might bring the new station and the car park forward,” said Steve.

“The West Coast franchise is up for renewal later this year, so the decisions about the new operator will be very important for the scheme.

“I think we should be able to achieve the same outputs, for the station and the car parking, as were originally expected, but perhaps on a different scale.”

Virgin Rail is the current franchise holder, of course, and although it once appeared it would miss out on the renewal, it is now on the short-list of approved applicants, against FirstGroup, plus rivals from France and Holland.

The new franchise begins operations on the Euston-Scotland line next April, and an announcement of the successful bidder is expected in October, so Neptune and the city council must await that decision.

Across the city at Goodyear, St Mods’ regional director John Dodds expects the first phase to come forward in May 2012, with the opening of a new 17,000 sq ft Aldi store.

It was October 2002 when the ’sale and leaseback’ deal saw the developer acquire the site, then hand 18 acres back to the US tyre-maker for its slimmed-down operations, and four years since the proposals won outline permission, so the scheme has been a long time in the planning.

However, recent progress has been swift, since St Mods signed the jv with Persimmon to develop seven of its sites across the UK last year, and detailed consent for the resi phase was agreed last December.

“The sites will include Longbridge and Long Marston, as well as others in Darlington, Sunderland and South Wales,” said John. “We’ve worked with Persimmon in the past, and sold residential land to them, so we knew them well, and knew they would be a strong partner.”

The well-known Goodyear Sports & Social Club is being retained, and a new neighbourhood park is proposed, but the precise mix may yet be tweaked.

“If there is demand for office space in Wolverhampton, then we might consider including some, but for the moment, the scheme is retail, leisure and residential,” said John.


Issue 25www.propertyadvantage.info 21Wolverhampton

Kudos for Alfred B as new relationships blossom

Alfred Bartlett carved out his reputation for identifying locations with potential at Donaldsons, before going solo in late-2005.

His Bartlett Property venture is now well established, and he’s still one of the few agents to operate in the niche between city centre retail, and out-of-town.

Early this year, Alfred won an unusual commission, when the production team behind the BBC’s hit ‘Hustle’ drama asked him to identify a location for the latest series, and he negotiated a six-month let on a warehouse at Small Heath Business Park.

Kudos Film & Television even allowed him to appear as an extra in the show’s final episode, which aired in February,though the brief flirtation with fame didn’t tempt him to consider a career move.

However, back in his day job, Alfred has established relationships he hopes will be of a more lasting nature with Hortons’ Estate and Calthorpe Estates. The former came about in a way which is very much a tale of our times, as he explains.

“I’d had my eye on a site on the former Co-op Dairy site on Hagley Road, which had been vacant for ten years or so, but it went to Helical Bar who wanted to develop it via a JV. When that fell through, Savills put it on the market and even though they wanted too much, I still thought it was a great site.

“I persuaded Wrenbridge to go for it and we went to see Helical in London, but they were looking for £1.5 million, which was still too much unless we had a chance to sign up tenants. Finally, I put the idea to Hortons and Trebor Developments and everything went smoothly from there.”

Hortons hasn’t previously been known for developing retail schemes, but property director Richard Norgrove says the decision to acquire the 0.9-acre site and proceed with the £3 million development, reflects its new opportunity-led mindset.

“We met Alfred, who mentioned the site where Helical had wanted to do retail, with apartments above, but although that market had gone, we agreed it had sound prospects just for retail,” he recalled.

“It was a good roadside location, and Alfred had already pre-let two of the five, so we went to a couple of banks, just to test their mood for lending. They wanted all the space to be pre-let though, so we funded the project ourselves.

“Now we’ve got three tenants signed up; the Co-op, American Golf Discount Centre, and Vets4Pets, and the other two are in legals, so the whole 18,000 sq ft should soon be fully let.”

Richard says the success of this retail project will most likely lead to others, with Bartlett Property, also in Birmingham, and of a similar size.

“We’re looking closely at two roadside opportunities, which would also be stand-alone space, of four or five units, although we’d need planning permission for change of use,” he revealed.

22Property AdvantageWest Midlands

Issue 25www.propertyadvantage.info Urban Regeneration

“We’re not looking for complex projects, or trying to squeeze every last bit of value out of a site, because we think simple concepts work best in the current climate.”

“Things are working very nicely with Hortons. They have the money, and can take advantage of opportunities which many other developers can’t,” said Alfred.

“Demand for roadside retail is growing significantly, because although retailers want to increase their market share, there are very few major schemes coming forward.

The fledgling relationship with Calthorpe began in 2010, when Bartlett Property negotiated a deal to bring the accountancy practice, Chantrey Vellacott DFK, from its previous Hagley Road premises to space in No 35 Calthorpe Road.

“It’s a lovely Grade II listed building which is being refurbished before Chantrey Vellacott move in, so the deal really suits both parties,” said Alfred. “We’re about to be instructed by Calthorpe Estates on another property, so hopefully that goes as well.”

Among other new clients for the Bartlett team are Graftongate’s Jamie Hockaday - for a long time the Midland face of Wrenbridge, Martin Gallagher, of the Gallagher Group, CBRE Investors, and the Indian High Commission.

The geographic range of recent commissions is equally varied; from Wales and Bristol to East Anglia, and from Peterborough and Milton Keynes to Newcastle-upon-Tyne.

“Although the transactional market is by no means simple, this is how property deals should always have been, you take advice from people who know what they are doing, and make rational investment decisions, rather than just relying on the market to create returns by its continual rise,” said Alfred.

“Many of the people who ventured into property to make a fast buck have been found out, because they couldn’t survive when the market stagnated. When everyone is swimming against the tide, it soon sorts out who has the right attributes, skills and contacts, and who hasn’t.

“I think there is beginning to be a realisation that it’s about the individuals, not the brands. The current market has forced a return to property fundamentals - seeing a site, analysing its potential, judging the likely yields, and establishing how a ROI (return on investment) could be made.

“The recession has sifted out the professionals from the amateurs, in the way that asset management and development opportunities are considered - the hustlers have gone and it’s now about getting a return based on analysis and knowledge. There are always opportunities, if you know how and where to look.”

Kudos for Alfred B as new relationships blossom

Birmingham’s leading roadside specialist has teamed up with two of the city’s best-known developers, as the post-recession property landscape begins to take shape.

23Property AdvantageWest Midlands

Issue 25www.propertyadvantage.info Urban Regeneration

24Property AdvantageWest Midlands AdvertisementsIssue 25

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The latest from the 25th floor...

BTS deal at Midpoint. Construction has begun on a new 155,000 sq ft distribution hub for Europa Worldwide Logistics, at ProLogis Park Midpoint. The firm had out-grown its present Birmingham base, and will create around 70 jobs with the move. Europa considered several locations before choosing the 65 acres of Midpoint, which is north-east of the city, and close to the M6, the M6 Toll and the M42. King Sturge advised Europa, and partner Carl Durrant expects more ’built to suit’ schemes to follow. The hub will be rated as BREEAM’ Excellent’, and be constructed by carbon-neutral methods.

Cheaper at MADE. Unemployed professionals from the built environment sector can attend Birmingham-based MADE‘s summer school in June, at cut-price rates. Organisers of the four-day event, which runs from the 19th and focuses on urban design, say those on the dole, or working part-time, will have to pay £500 without accommodation, or £750 with. Full-price tickets are £1,314. The event has run since 2004, and architects, planners, engineers, housing and regeneration professionals, community leaders and councillors are expected to feature heavily among the delegates.

What goes Round... Former LSH director Nicholas Round is back in Birmingham. Colliers International has created the new post of national head of shopping centre leasing, and head-hunted Nicholas from the Manchester office of niche retail specialist Tushingham Moore. He has been in the property sector for almost 30 years, and his clients have included AXA, Frogmore and ING. Nicholas has recently completed lettings in Birmingham, Coalville, Kidderminster, Loughborough and Stourbridge. Nicholas will work with Colliers’ retail agent, Emel Ahmet.

Switch off to make money. The concept of ‘demand management’ to reduce energy bills is commonplace in the United States, but has yet to catch on in the UK. However, KiWi Power has now signed its first corporate contracts here, after spending many months trying to persuade management teams across the country that they can save serious wodges of money, cut their carbon footprint, and get money from the National Grid, for reducing pressure on its ‘peaking power’ resources. KiWi’s technical staff advise clients how to fine-tune their energy demand at peak times, often by trimming a few degrees from the air-con for a couple of hours, or turning off some lights. All the kit and installation costs are met by KiWi, and because the National Grid pays it for reducing demand, it keeps some money, and passes the rest on to its clients. As for the name, there is no link with New Zealand, but the co-founder wanted a ’green’ brand, and Apple had been taken.

Your news here...Send your news & deals to:propertyadvantage@ openboxpublishing.co.uk


www.propertyadvantage.info News & Deals

City bucks the trend. The latest analysis of regional office markets by CB Richard Ellis confirms that demand from the public sector has tumbled, as expected. Take-up in nine key cities during 2010 was just 8% of the total demand, although the Birmingham figure was a relatively impressive 13% - or almost 93,000 sq ft. However, Ashley Hancox, CBRE’s Birmingham-based head of regional offices, believes the public sector could still have a part to play in the recovery of the office market, as leases expire, presenting opportunities to consolidate in more efficient buildings. “What may be more of an issue, for many cities, will be the release of secondhand space back onto the market during a time when vacancy levels of lower quality stock are already at very high levels,” he said. “In good locations this may provide development opportunities for new Grade A offices, although the ability to transform the buildings will depend on innovative refurbishment programmes, to meet increasingly demanding sustainability targets from all sectors.”

Search goes on. Birmingham Science Park Aston is still searching for a joint venture partner, to bring forward four new buildings alongside its existing Faraday Wharf complex as a ’Digital Plaza’. The concept, unveiled at MIPIM 2011, aims to deliver 117,000 sq ft of new space targeted at start-up companies in such sexy sectors as digital gaming and hi-tech. The city council, which owns the science park, hopes that site work could start in late-2012 or early-2013. The end development value of the space is estimated at £35m.

Wright time for Norman. The building consultancy team at GVA’s Birmingham office has swelled to a record number of 18, after taking on former LSH director, Norman Wright, as a senior surveyor. He worked for Lambert Smith Hampton for 22 years, and was a director for the last nine. Norman comes to GVA from BNP Paribas Real Estate. The team’s clients include Helical Bar, AXA, CBREI, Hermes and F&C Reit. GVA director David Martin said: “As a former director in this field, Norman brings with him significant experience. He will enhance our professional and project offering, as well as aiding us in meeting the increasing demand for our services, especially acquisition survey reports, and preparation of dilapidation schedules. The building consultancy team has seen year-on-year growth in what is still a very challenging marketplace, which is testament to the track record and reputation the team has earned in the region.”

Localism fails to convince. Nearly a quarter of Conservative councillors, and a third of their Liberal Democrat peers, don’t believe in ‘localism’, according to research by CB Richard Ellis. The findings were revealed at the agency’s third annual government and infrastructure conference. The analysis, based on information from 400 councillors across the UK, also included the views of 2,000 members of the public. Almost 80% considered that their local area was either just right, or already over-developed, confirming the property community’s fears that David Cameron’s concept will be the catalyst for a serious outbreak of NIMBY-ism. Philip Scott, the Birmingham-based head of planning for the regions at CBRE, said: “I suspect the proposed new planning laws within the Localism Bill are likely to be a charter that results in more bureaucracy, frustration and disappointment. The government needs to win over a greater number of councillors, and the public, to ensure this important policy is successfully embraced.”



All go on Eastside. Site work starts on Birmingham’s long-awaited Eastside City Park in June, and project manager Jim Wilson is expecting completion in August or September 2012. It‘s been a long time coming, but the delays were largely down to the unexpected news that HS2 would bring a new station to Eastside. The original design was then tweaked because two potential developments could have been be blighted. Jim expects work to start on the adjacent Science Garden in August, and believes that the new Birmingham City University campus, currently in planning, should be completed by the autumn of 2013.

Enterprising deal. Enterprise Inns has completed a ‘sale and leaseback’ deal for 26 of its London pubs, with Hermes Property Unit Trust. The properties will now be leased back to Enterprise on new 35-year leases. Last autumn, the estate was valued at just over £25 million, but the Hermes deal sees the pubs valued at just shy of £32.5m. The initial rent roll is £2.16m a year, and Enterprise says future rises will be based on RPI, although no less than 2% and no more than 4% pa.

DTZ cleans up. DTZ’s Birmingham-based shed team has let a unit on Standard Life Investments’ Gravelly Industrial Park to Midland Cleaning Supplies. The estate, which is within sight of the M6, has 78 units on 80 acres of landscaped space. The firm, which was established in 1994, says a boom in its online business meant it needed new premises to support its expansion plans. The unit is 2,350 sq ft. DTZ are joint agents on the park, with GBR Phoenix Beard.

Balfour quits the city. Balfour Beatty is shipping its Northern Area team out of Edgbaston this summer, and taking just over 4,000 sq ft at Blythe Valley Park. It says the move to Cornwall House has been considered for some time, because it will offer staff a better working environment, and the park’s location will also give them better access to other parts of the country. The group’s engineering services division also has a base at Blythe Valley. Cornwall House is managed by Liberty Property Trust, in partnership with Doughty Hanson & Co Real Estate.


Issue 25www.propertyadvantage.info 27News & Deals

35 Newhall Street. Having one of the most prestigious addresses within Colmore Business District, 35 Newhall Street is situated at the junction between Newhall and Cornwall Street and combines striking architecture with modern styling and office accommodation ready to be tailored to occupier needs. Suites ranging from 2,574sqft to 9,727 are currently available with the opportunity to take additional space across more than one floor. Finished to an impressive Grade A specification, 35 Newhall Street also offers secure basement parking.

King Sturge and KWB are joint agents for the property which is owned by West Midlands Metropolitan Authority Pension Fund and fund managed by ING Real Estate.

For further information on 35 Newhall Street visit www.35newhallstreet.co.uk

Move suits space-men. Architects from Birmingham are looking to win work in London, after opening a studio in Clerkenwell.

The Space Studio was launched in a former bakery near Atherstone 11 years ago, but has been based in the Jewellery Quarter since 2007. Directors and co-founders, Kevin Singh and Tony Kerby, reckon it’s time for a presence in the capital, ahead of the Olympics. “We recently worked on a government agency office project, beating several London practices, so we feel we have credibility, and aim to deliver London projects at Birmingham prices,” said Kevin.

Some of the studio’s great work such as Wellington Road, Handsworth and Vinappris Wine Bar, plus their Government Agency Offices is featured above.

Urban Splash. Urban Splash has got 2011 off to a great start with over 10,000 sq ft of space let at Fort Dunlop in the last few months. Green Room Retail, Skills First and Red Box Ltd have joined the 54 other tenants in Birmingham’s most iconic office address. Despite the past couple of years being tough for the market, businesses are still drawn to Fort Dunlop because of the flexibility of the development. Flexible terms and short form leases allow for speedy lettings and next day move ins. The addition of car parking and on-site facilities is a real bonus for companies looking for a new move. Call 0333 666 0000 for viewings.

New focus for fifty4. A new concierge service is the latest addition to fifty4 Hagley Road in Edgbaston, as landlords Mercia Real Estate Limited continue to actively invest and add value. This marks a continued move by fifty4 to focus its attention on customer service as one of its main differentiators, making the grade A offices more akin to that of an upmarket apartment block or hotel than a conventional office building.

A full time person has been appointed to head up the new service , which will cover anything from providing weather and travel updates to organising car valeting or booking a celebration dinner with friends.



Best of Two Worlds. PRUPIM’s multi-million pound refurbishment at Middlemarch Office Park has resulted in high quality contemporary offices with significantly improved Energy Performance Certificate ratings. Including an impressive new full height reception at Stonecourt, the grade A office specification complements the established benefits of the Park with its attractive landscaping, a very high car parking ratio and comprehensive on site security.

Stonecourt is a major HQ office building whereas Riverstone Court provides own front door accommodation. Enquiries up to 36,000 sq ft can be entertained.

The accommodation is being marketed through King Sturge and KWB.

When love turns sour. Divorce litigation involving disputes over property assets is becoming big business for the valuation team at DTZ’s Birmingham office. Associate director Hugo Wildblood says the uncertain economic climate is making it difficult for both sides to ensure they receive fair treatment, when more property assets are involved than simply the marital home. “What if the ‘breadwinner’ in the relationship owns a portfolio of properties? How does the other party know they are being fairly treated when it comes to asset division? Equally, how does the ‘breadwinner’ know what the true value of their portfolio is worth in today’s difficult economic climate?,” asked Hugo. “Valuers who provide expert litigation advice for divorce settlements are often jointly instructed by both parties’ solicitors, to provide a fair and balanced view on property values.”

Colmore phase one filled by Orega. Orega has filled the first phase of its Colmore Plaza business centre, after recruitment specialist Idex took 34 workstations, and moved from nearby Temple Row, to create its new regional head office. With the initial 12,500 sq ft full, Orega has begun marketing the next 7,500 sq ft. The centre is on the building’s mezzanine floor, but has a separate reception and meeting rooms at ground level. Other signings during the first four months of 2011 include Freedom Recruitment, Branch Martin Spice Marketing, the German insurer HDI-Gerling, P&C Financial Services, and the brand management-protection specialist Hington Klarsey.

Birthday surprise. Arkade Property has marked its 10th birthday by inviting two employees into its board-room. Both new directors, Sybilla Rose and James Clapham, work out of its Branston Street offices, in the Jewellery Quarter, and run the group’s residential arm. They will also now join director Andrew Kay, who co-founded the business, in the new Arkade Property Commercial venture. Law graduate Kay advised on commercial and residential property deals for 15 years, before establishing Arkade, with the now-retired Beatriz Rose.


Issue 25www.propertyadvantage.info 29News & Deals

Axis powers on. One of Birmingham’s landmark city centre buildings has secured lettings of 114,000 ft. The Department for Communities & Local Government has taken 39,000 sq ft at the 11-storey Axis Building, on Holliday Street, on a 10-year lease. Engineering consultants Atkins have signed for 75,000 sq ft at the same scheme, also on a 10-year lease. Sanderson Weatherall acted for the owners British Railways Board (Residuary), and DTZ’s Birmingham office acted for the DCLG, whilst Atkins represented itself.

LEP gets into the zone. The Greater Birmingham & Solihull Local Enterprise Partnership has named the eight board members, who will operate under the chairman, John Lewis & Co’s Andy Street, and not one is female. More than 80 applicants were whittled down to the final line-up, which is packed with heavyweights from the private sector, plus Birmingham University vice-chancellor, Professor David Eastwood. Meanwhile, the LEP is pressing ahead with its attempt to have the city centre designated as one of the country’s 21 Enterprise Zones, offering significant benefits, notably in terms of swifter planning decisions and a five-year business rate holiday, to companies which relocate to the area, and create jobs. The LEP is also asking the Treasury to consider one of three locations outside the city for an enterprise zone belt.

Rigby on the runway. One of the region’s most successful entrepreneurs, Sir Peter Rigby, aims to spearhead the development of some 200 acres close to Coventry Airport, including a hi-tech office location, and an extension of Middlemarch Business Park. He predicts that the office element alone would cover 65 acres, linked to the A45 by a new junction, which would also resolve the gridlock caused by the notoriously inadequate Tollbar Island. Sir Peter, whose wealth was recently estimated at £400 million, bought the airport after its previous operators collapsed once permission for a major new passenger terminal was refused. The technology tycoon aims to invest in the airport’s cargo handling operations in the short-term, whilst his ambitious longer-term plans include the reinstatement of passenger flights. Sir Peter suggests that 10,000 jobs could ultimately be created in and around the airport, and on the two business parks, which would be brought forward via a joint venture with a major developer.

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By using Ad Hoc, clients have saved as much as 50% against boarding up methods and 80% against static security guard services. All live-in security Guardians are stringently vetted.

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