Sheffield pushes on with £300m retail quarter plans Posted on: June 14th, 2014 Sheffield City Council (SCC) will begin the procurement process for investors and developers this summer to kickstart its long-awaited £300m city centre retail quarter scheme, a senior council official has revealed. Nalin Seneviratne, SCC’s director of capital and major projects, told a Built Environment Networking event on ‘Sheffield General Development Plans 2014’, held at the city’s Culters’ Hall, that work on the new retail quarter (NRQ) could begin as early as next Spring, with completion scheduled for 2019. The 700,000 sq ft retail quarter has been stalled since the 2008 downturn and the scheme’s last development partner Hammerson exited in summer 2013. Seneviratne said SCC plans to begin the procurement process for NRQ investors and developers at the “back end of this summer” with a view to starting enabling works next Spring and full works next Summer. He said SCC hopes to “take advantage of the momentum building” in the retail sector, but said the council was “building in flexibility” due to the sector’s volatility. SCC will present plans to buy up the £55m of property needed to make way for the scheme to its cabinet for approval imminently. The scheme is backed by an agreement with central government for £50-60m of TIF funds. Seneviratne pledged SCC will intervene in other Sheffield schemes with investment or funding guarantees – through avenues such as TIF – to kickstart developments. He said: “It’s about the council taking a lead and also more importantly taking a risk to work with the private sector in innovative ways to bring forward development. “SCC will commit resources [to do that]. As the market recovers we’re conscious we need to increase the pace of city centre development.” Three clients – the University of Sheffield, Harworth Estates and Henry Boot Developments – also discussed major development plans for the Sheffield city region. Here the four organisations discuss their development strategies in detail – SHEFFIELD CITY COUNCIL (SCC) SCC is England’s third largest unitary authority and has a diverse estate from which services are delivered to 550,000 citizens. The council has a £430m development pipeline for the next four years. Seneviratne said that with “key additional projects” factored in, including the city’s planned £300m NRQ scheme, this could “hit the £1bn mark” over the next five years. Opportunities SCC is “urgently” moving forward plans for NRQ after the scheme’s former developer Hammerson departed the scheme last summer. SCC will present plans to buy up the £55m of property needed to make way for the scheme to its cabinet for approval imminently. New plans envisage a 600-700,000 sq ft scheme with a gross development value “in the order of £300m”. SCC plans to begin the procurement process for investors and developers at the “back end of this summer”. SCC plans “to seed the scheme with £100m of cash and land,” according to Seneviratne. The scheme is backed by an agreement with central government for £50-60m of TIF funds. SCC hopes enabling works will start next Spring, that works will start on site proper next Summer and that the first phases will complete in Spring 2019, with the final phases completing in 2020. SCC’s leadership team on the project is Seneviratne, Simon Kidd (retail director NRQ) and Nigel Cunis (commercial director NRQ). Housing makes up almost three quarters of SCC’s development budget. The council is planning a major programme of upgrades to its 42,000 home social housing stock. The first £18m phase of the redevelopment of Moor Market has been completed, with phase two currently on site. Three further phases will follow. SCC has identified the Riverside Business District in the city centre as having potential for up to two million sq ft of space, primarily office development, and is investing in public realm improvements there to help encourage this. The council is investing £50m in flood protection measures in the Don Valley. SCC will use an investment fund model to fund £35m of cultural developments, with works planned for the Sheffield Central Library and Graves Art Gallery. SCC is investing £4m in improvements to Castlegate, including a programme of archaeological works to expose what remains of Sheffield Castle. The investment will “enable a development that will link in with those historic artefacts,” according to Seneviratne. Strategy Seneviratne said the council is willing to intervene to kickstart schemes and gave the example of 3 St Paul’s, an office block in the city centre by developer CTP St James that is being constructed speculatively thanks to a guarantee from the council that it will buy it, backed by TIF funds, if a private buyer cannot be found on completion. UNIVERISTY OF SHEFFIELD The University of Sheffield has 25,000 students and turns over around £500m annually. It’s main campus lies to the west of Sheffield city centre, but it also own £100m of property to the east – the Advanced Manufacturing Research Centre (AMRC) – linked to Sheffield’s manufacturing zone, including its Advanced Manufacturing Park (see Harworth Estates below for more info on AMP). Opportunities The university is working with architects Feilden Clegg Bradley Studios to shortlist options for a 46,000 sq m development at Hounsfield Favell Road. The university has major plans to expand its AMRC operations and is planning to spend at least £60m on capital projects this year alone. A tender is out for the £43m Factory 2050 building, with submissions back later this month. A planning application has also gone in for a £16m extension to its CTI building. The university is planning to build an atrium between its Mappin and Central Wing buildings that will provide a further 3,800 sq m of teaching accommodation for the engineering department. A tender will be issued later this year. The university plans to refurbish a number of faculty buildings, including the psychology faculty on Western Bank, the Sheffield Centre for Health and Related Research at Regents Court and the education department in the Husband Building on Glossop Road. The university is planning major public realm and infrastructure improvements across its main campus to promote pedestrian access, cycling and public transport use and to move car use to the campus periphery. Strategy Much of the university’s estates strategy is being driven by “exceptional growth” in student numbers for the STEM subjects – science, technology, engineering and mathematics. Keith Lilley, director of estates and facilities management at the University of Sheffield, noted students in these subjects typically need access to more facilities than arts or humanities students, driving demand for further capital projects. The university is looking at opportunities to co-locate with private sector manufacturing firms at its AMRC site. HARWORTH ESTATES Harworth Estates is a property firm originally formed to take over the land and property assets of UK Coal and became independent in 2012. It owns approximately 30,000 acres across 220 sites, almost all of which are redundant coal mining sites (although a small number are operational), mainly in the North and Midlands. Harworth Estates has redeveloped a number of these sites into housing, commercial or industrial developments, or has plans to do so in the future. Harworth Estates is 40-strong and headquartered at one of its own developments, the Advanced Manufacturing Park (AMP) to the north-east of Sheffield. In the Sheffield city region it has 39 sites, averaging at about 100 acres each, and over £100m of property assets. Around 900 people are employed at Harworth sites in the region, either at industrial or commercial business parks, or at its two operating coal mine methane power stations. Opportunities Harworth has a £600m development pipeline and this is set to grow. In the housing sector it has identified 8,160 potential housing plots, of which it has planning consent for 6,997, 1,494 are sold and 215 are already built. In terms of employment space, Harworth has identified potential for 5.1 million sq ft, has planning consent for 1.3 million sq ft and has built 830,000 sq ft. Waverley, to the north-east of Sheffield, is Harworth Estate’s largest development in the region. The 740-acre site was home to the former Orgreave coking works. Harworth’s development work began in 2011 after the site was fully remediated. It is designated as an enterprise zone. The site is earmarked for 200 acres of employment, 230 acres of housing and 310 acres of community use. It is expected to create £1bn to the local economy over the next 20 years. The Waverley site incorporates AMP. Harworth’s masterplan envisages development of 2 million sq ft of employment space at AMP across 150 acres, 660,000 sq ft of which has already been built out. More than 40 companies are currently based at AMP, with occupiers include the University of Sheffield, Boeing and Rolls Royce. In terms of future developments at AMP, Harworth is currently working up plans to build three industrial units of up to 60,000 sq ft across five acres and a further phase over 21 acres targeted at SME businesses. Harworth is working with Rotherham Council to remasterplan the remaining 40 acres. Waverley also has outline planning permission for 3,900 homes. Three housebuilders – Taylor Wimpey, Harron Homes and Barratt Homes – are on site building out the first 300 homes, with further phases due to be released in the next six months. At the former Harworth Colliery site near Doncaster the firm has planning consent for 120 homes, being built by Jones Homes, while there is “further residential potential at the site for a 15-20 year period”, said Campbell Carruth, business space director at Harworth Estates. Harworth is a stakeholder in Rossington regeneration scheme near Doncaster, where 1,200 homes are planned over 10-15 years. Strategy As former coal mining facilities, Harworth’s sites are blessed with strong road, rail freight and power grid connections. “It’s a strong infrastructure base with which to go forward,” Carruth said. Harworth is “beginning to look at expanding its landholding as confidence returns to the market”, Carruth added. HENRY BOOT DEVELOPMENTS Henry Boot Developments is a national developer based in Sheffield. One of its major schemes in the Sheffield city region is the 300 acre Markham Vale business park scheme south of the city at junction 29A of the M1. The Markham Vale scheme is a joint venture between Henry Boot and Derbyshire County Council (DCC). It is an enterprise zone. Opportunities Henry Boot is on site at Markham Vale on two warehouses totalling 53,000 sq ft and two further buildings totalling 157,000 sq ft are committed under contract and will complete by summer 2015. A restaraunt, pub and retailer have also committed to moving in. The developer is in detailed discussions with potential speculative funders interested in developing a further 650,000 sq ft. Henry Boot is embarking on infrastructure work to open up new development land to the west and north of its existing developments. A £14.2m grant from DCLG will help fund the infrastructure improvements and provide ‘gap funding’ to support 190,000 sq ft of spec and bespoke development. Strategy Vivienne Clements, director at Henry Boot Developments, believes Markham Vale will be fully developed out “over the next two to three years”. Across the UK Henry Boot is targeting forming more joint ventures with public sector clients to enable schemes to come forward when public finances are tight.