Harry Hutchinson, director of Oceanic Estates, gives his view on what needs to happen to shape the economy of the southern region, discussing the impact of commercial property and how we can position ourselves to continue developing into a ‘Southern Powerhouse’.
Oceanic Estates was set up by commercial agent Phil Hutchinson (Harry’s father) and Lawrie Smith (Olympic medal winner and round the world sailor), with the acquisition of Marchwood industrial estate to the west of the port of Southampton, and the subsequent development of schemes along the M27 corridor.
Through the development and expansion of the business, Oceanic Estates has experienced many of the highs and lows of being part of the development landscape in the South of the UK.
Creating a balance
“I feel that the planning process could have a more holistic approach, with everyone involved looking at the overall picture rather than a focus on their specific field,” Hutchinson observes.
“The local authority should define what is sacrosanct and what is negotiable, and on that basis, the premise could swing more to being yes rather than no in terms of a planning application. It would mean that everyone is focused on looking to see how the proposed development could work for all concerned and achieving policy goals, because often there is no right or wrong answer. What’s needed is a balance.
“In terms of encouraging the creation of more business space, adopting a more flexible approach to employment use classes would help secure tenants. A 2000 sq. ft to a 30,000 sq. ft unit, with a portal frame and normal eaves height looks the same from the outside, whether it’s for light industrial (B1), for distribution and storage (B8), or general industrial (B2). I appreciate there can be good reasons why certain uses need to be restricted, for example proximity to residential dwellings, but more flexibility would mean that developers and planners can react more quickly; that can be the difference between a company taking a building, or relocating elsewhere.
Improvements to be made
“With regard to what is driving demand, it is difficult to judge. There seems to be confidence in developing the larger sizes of industrial buildings with recent speculative schemes being built. But in response to ‘if we built more, would there be a requirement for it?’, I don’t think it’s as simple as providing good building stock and that alone will attract more occupier demand. Of course, developers are going to be cautious; construction costs have more than doubled since I joined the company sixteen years ago.”
A former commercial agent himself, Harry Hutchinson believes there is a business nettle to be grasped. Is the existing rating system a sustainable model? He explains: “It’s far from ideal and doesn’t help to encourage businesses to invest; a tenant’s business rates liability can be increased when they invest in fit-out works, and this tax on business is doing little to encourage companies to grow.”
Assets of the south
“We also need to remove the rates liability on unoccupied commercial and industrial property, because it has resulted in the demolition of older buildings, which have always provided vital budget space for growing businesses; their disappearance has removed choice from the market.”
Is the south’s economy punching at its weight in terms of perception? “The media focus recently seems to be on the north, and there has been a lot of logistics space development,” observes Hutchinson, “but in the south we have significant assets with ports, airports, universities and a good skilled labour pool, which have a strategic impact nationally, as well as close proximity to London. Supporting and highlighting these key assets, driving forward better logistics, and supporting emerging technologies could be a key factor in attracting occupiers in the future.”
However, there’s an issue which Hutchinson believes could easily be addressed more quickly and propitiously to attract occupiers. “Technology has thrown up a real challenge,” he says. “Internet connection speed wasn’t something that prospective occupiers would have looked at in the past, let alone mention, but now it can be at the top of their priority list. Rather than the focus being a fast fibre roll-out concentrated on residential dwellings, it makes sense to prioritise it for businesses; job creation and retention is dependent upon it.”