the welborne employment strategy - fareham...region in the medium to long term future, providing...

The Welborne Employment Strategy Final Report

Submitted to Fareham Borough Council November 2013 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 M: 07881 348 244 E: [email protected]

Wessex Economics Ltd Berkshire House 252-256 Kings Road Reading RG1 4HP T: 0118 938 0940 Contact: [email protected]

mailto:[email protected]

The Welborne Employment Strategy 2013

Table of Contents

Executive Summary.......................................................................................................... 3

1. About this Report ....................................................................................................... 5

2. Objectives Relevant to the Employment Strategy ..................................................... 7

3. The Current Market for Employment Space and Future Trends .............................. 10

4. Draft Plan Proposals for Jobs and Employment Floorspace ..................................... 14

5. Review of Assumptions in the Draft Employment Strategy ..................................... 18

6. The Objective of Self Containment .......................................................................... 25

7. Delivery Considerations ........................................................................................... 31

8. Recommendations ................................................................................................... 37

Appendix 1: The South Hampshire Commercial Property Market Appendix 2: South Hampshire Strategic Sites Appendix 3: Employment Floorspace Demand and Supply Forecasts Appendix 4: Employment Land Trajectory


Executive Summary

1. This report contains advice on the overall quantum of employment land and employment floorspace to be

provided at Welborne, and the anticipated split between office, industrial and warehouse uses. It estimates

how many jobs will be created in Welborne as a result of such development and advises on the

implementation of the Employment Strategy.

2. It is anticipated that 20 ha of land will be allocated for employment uses at Welborne, focused on sites

immediately to the north of the M27, with the majority of the allocated land to the west of the A32 Wickham

Road. It is recommended that 3 ha of land close to the proposed District Centre be ‘allocated’ for office

(B1a) and similar uses; 10 ha for warehousing (B8 use); and 7 ha for light industrial (B1c and B2) uses.

3. This level of provision can be expected to be associated with provision of 24,000 sq m of office space, 33,250

sq m of light industrial space, and 40,000 sq m of warehousing space. Development is not likely to start on

any scale until the completion of works to make Junction 10 of the M27 an ‘all moves’ junction. This reflects

the need for potential occupiers of employment space to have unfettered access to the motorway. The date

currently anticipated for completion of these works at Junction 10 is 2020.

4. In total the land allocated for employment uses at Welborne has the capacity to accommodate 97,250 sq m

of employment floorspace. However there will be a loss almost 14,000 sq m of existing employment

floorspace, so the net increase in supply associated with the Welborne proposals is for an additional 83,250

sq m of employment floorspace, to be built out over the period to 2040.

5. Once developed and fully occupied, it can be expected that these office, industrial and warehouse buildings

will provide around 3,335 jobs. A further 1,250 jobs are likely to be created in Welborne in shops, schools,

residential care homes, and in health centres etc. An estimated 1,150 residents are likely to work from home.

Once fully developed it is therefore estimated that some 5,735 jobs will be available at Welborne.

6. This level of anticipated provision of employment opportunities at Welborne will ensure that there are

opportunities for local residents to work locally, though it is acknowledged that many residents will work

further afield; and that many of those working in the businesses located in Welborne will live outside the new

community. This reflects the pattern of current day working lives and the way the labour market works.

7. The proposed allocations of employment land at Welborne will support the economic growth of South

Hampshire. In particular Welborne will be an important asset in promoting the development of the sub-

region in the medium to long term future, providing land and accommodation for a wide range of different

types of business requiring different forms of space in a strategic location.

8. In particular Welborne will be able to contribute to the objectives of the Solent LEP and the Partnership for

Urban South Hampshire in offering a location and buildings for businesses in the following priority sectors,

each of which is an identified Solent LEP and PUSH priority: advanced manufacturing; aerospace;

environmental technology; transport & logistics businesses; and financial and business services.

9. Given the current low level of demand in the office market and the existence of significant levels of planned

and permitted provision for offices, it is anticipated that development at Welborne will focus on warehouse

and clean tech business space in its early years. The demand for office space is expected to emerge in the


medium to long term future as the resident population of Welborne grows and the District Centre becomes

established.

10. The report makes a number of recommendations with regards to the implementation of the Employment

Strategy. These are set out below.

11. Given the quantum of land and the lengthy anticipated timescale for development at Welborne there will

need to be flexibility in how land is used. Over time it is probable that business space will become

increasingly hard to allocate to a single use class. This would suggest that policies for zoning different types

of activities need to be developed based on the characteristics of a business’ operation.

12. The zoning plan should identify what type of buildings and business functions are appropriate to different

parts of the site. Consideration should be given to; the visual impact and character of the building; traffic

generation; employment density; complementarity to the District Centre functions; compatibility with

existing development and planned uses of adjacent sites; noise; waste generation etc.

13. Land close to the District Centre and the A32 frontages should be reserved for office uses. The scale of the

land allocated for employment uses should allow FBC to ensure that these key sites are not developed for

non-office uses, if supported by an appropriate design code. It should also be in the landowner/developers

interest to retain these sites for higher value uses, even if it takes longer for demand for those sites to

materialise.

14. Given that no major employment floorspace developments are likely to be completed before 2020, and quite

possibly not until one or two years after this date, it is recommended that FBC encourage the retention and

development of small scale employment floorspace in and around Welborne. Existing employment

floorspace at Dean Farm should be retained for as long as possible. This needs to be taken into account in the

phasing of development.

15. Any major development proposals that might unlock funding that would advance the delivery of the ‘all

moves’ Junction 10 improvements should be given serious consideration. If the Junction 10 works can be

advanced this would increase the chances of residential development and the provision of business

floorspace and jobs happening in parallel.

16. In terms of planning to support the development of small businesses at Welborne, priority should be given to

retention, and possibly conversion, of existing buildings on site and in the surrounding villages to make them

suitable for start-up and small businesses. In the development phases of Welborne it may also be

appropriate to provide temporary business accommodation to test the market and evidence demand.

17. Most home based businesses do not have particularly demanding broadband requirements, and can work

with the normal levels of broadband services required for home entertainment. Given the scale of planned

employment provision in the employment zone high capacity networks will be provided on a commercial

basis in the employment zone and the District Centre. Small businesses needing advanced communications

will need to locate there.

18. Many residents in Welborne will work outside Welborne. In terms of encouraging sustainable journey to

work patterns it is important that public transport connects Welborne to the major employment centres in

Fareham and to Fareham station.


1. About this Report

This report has been prepared by Wessex Economics as part of suite of studies commissioned by Fareham

Borough Council (FBC) in connection with Welborne, the new community being planned by FBC to the north of

the existing town of Fareham. The range of work being undertaken is designed to deliver a Concept

Masterplan that can be presented as evidence at the Public Examination of the Welborne Plan.

The draft Welborne Plan sets out the vision and objectives that are to guide the development of Welborne.

These high level goals are the starting point for this review of the Employment Strategy as set out in the Plan.

The brief for the study calls for the development of:

A sound evidence base to support the employment policies in the Welborne Plan

An objective assessment of the need for employment floorspace

Advice on delivery mechanisms to ensure that there is a reasonable prospect of employment floorspace

being developed

It is helpful in drawing conclusions to identify the specific questions that need to be addressed in the review.

These are:

How much land should be identified in the Welborne plan for employment (B use class) uses, and linked

to this how much B use class floorspace (in sq m) should be planned for?

What should be the mix of planned uses in terms of the split between offices (B1a) and other B class

uses (B1b, B1c, B2 and B8)?

What factors need to be taken into account in deciding where these B class uses should be located

within the site?

What number and type of jobs will be associated with the development of B class uses, and to what

extent can it be assumed these will be filled by Welborne residents?

How many other jobs are likely to be created at Welborne (associated with uses other than B class

premises), and to what extent can it be assumed that these will be filled by Welborne residents?

What actions can be taken to ensure that the planned level of employment floorspace is developed, and

that the associated levels of jobs provided are delivered?

What should FBC’s policy be regarding the phasing of employment land development, and other job

creating activities, and hence the overall profile of job growth at Welborne over time?

In answering these questions it is important to understand that this study examines these issues relatively

narrowly through the lens of employment and economic development policy. Issues such as the quantum and

mix of employment uses, the timing of development, and the extent that jobs are filled by local residents have

important implications for traffic flows. Traffic impacts may have a major impact on deliverability, with certain

levels of increased traffic triggering requirements for highways investment; this then raises issues of when and

how such investment can be funded.

This study is intended to inform the next stage of master planning for Welborne. A very wide range of

considerations need to be taken into account in ensuring that Welborne is a great place to live and work, and


that the overall development is deliverable in terms of financial viability. Thus the conclusions and

recommendations presented in this report are not set in stone. They must be considered in the round as part

of the overall task of master planning and ensuring that the entirety of the proposed development can be

delivered.

Issues around deliverability in this report are focused on the delivery of employment floorspace; it has not

been part of Wessex Economics brief to look at the viability of development of Welborne in the round. In

general employment development will contribute less to development values than residential development.

But employment development can occur on land that is not suitable for residential development, and

therefore may contribute to the overall viability of the new development.

Moreover, as noted previously the quantum and mix of employment floorspace provided may have important

implications for the capacity and timing of new transport infrastructure required, which in turn is likely to

have major implications for viability and hence deliverability of the Welborne Plan. Thus, decisions regarding

the quantum of employment floorspace, its location and type, and the timing of development have important

implications for the overall viability of the development.


2. Objectives Relevant to the Employment Strategy

To answer the questions posed in Section 1 of this report it is necessary to start by examining the objectives

set out in the draft Welborne Plan. Chapter 2 of the draft Welborne Plan sets out the overall objectives of the

Plan.

A key theme within these objectives relevant to the development of the Employment Strategy is self-

containment. This is expressed within the vision and objectives in Chapter 2 of the draft Plan1, as well as in the

key principles in Chapter 5 of the draft Plan that underpin the economic role of Welborne2, reproduced in

Figure 1 overleaf. A second objective of the employment strategy is to support the economic growth of South

Hampshire, as set out in the key principles in Chapter 5 of the draft plan (see Figure 1 below).

Figure 1: The Three Principles that Underpin the Economic Role of Welborne

1. The aspiration is to create a ‘balanced community.’ This means providing a range of jobs which will meet

the needs of local people and will not generate significant net in or out commuting. This is in contrast to

a ‘dormitory settlement’ with little employment which would lead to net out-commuting or an

‘employment hub’ which would generate net in-commuting.

2. Welborne must support the economic growth of South Hampshire. This means targeting growth in a

range of the sub-region’s priority sectors; respecting the ‘Cities First’ policy; and complementing the

economic activities at Solent Enterprise Zone.

3. Economic development at Welborne should support the principle of self-containment through close co-

location of homes and jobs so that the opportunity to live and work in close proximity is provided.

Paragraph 5.2, Chapter 5 Economy and Self Containment, Draft Welborne Plan, April 2013

Given that Local Plans must be shown to be deliverable, Wessex Economics is of the view that a specific

objective relating to deliverability should be made explicit.

More detailed comments on the objectives of the draft Welborne Plan most relevant to the development of

the Employment Strategy are set out below.

1 Para 2.4, Chapter 2, Draft Welborne Plan, April 2013

2 Para 5.2 Chapter 5, Draft Welborne Plan, April 2013


Objective 1: Self Containment

The first objective flows from the vision statement set out in the draft Welborne Plan, which places the goal of

encouraging self-containment at the heart of the overall plan. The statement in full is: ‘Welborne will create a

diverse and well integrated new community. It will encourage self-containment with a significant proportion of

its inhabitants' life needs being accessible within a main centre and smaller neighbourhood centres. It will

contain a mix of dwelling types which meet the needs of the increasing numbers of single person households,

families, and the needs of an aging population. There will be a range of accessible new jobs created which

contribute towards meeting the employment needs of this diverse new community.(Para 2.8, page 18).

This goal is reflected in Chapter 5 of the draft Welborne Plan entitled ‘Economy and Self Containment’, which

states that: ‘The daily needs of Welborne’s residents will be catered for through the provision of a mix of

services and employment opportunities which are easily accessible from where they live. The close co-location

of homes with jobs, retail, services, education and recreation in Welborne will help to encourage self-

containment. This chapter sets out the policies which will ensure the provision of these facilities and contribute

to self-containment’ (Para 5.1).

These two statements along with further statements of principles in Section 5 of the draft Welborne Plan (see

Figure 1), make it clear that FBC wishes to minimise the extent to which residents need to travel outside of

Welborne to access services, and to provide the opportunity to work locally. This will make Welborne a more

attractive place to live, but it will have other benefits. It maximises the scope for people to walk or cycle to

shops and to work, the most sustainable form of transport.

Also, the more people that both live and work in Welborne, the less the pressure of additional traffic placed

upon Junction 10 of the M27, and on the M27 and routes into Fareham. Given that stretches of the M27 and

other routes suffer from severe congestion in peak hours, encouraging self-containment will reduce the costs

associated with congestion and reduce (or put off further into the future) the requirement for further

infrastructure investment to deal with congestion.

Objective 2: Supporting the Economic Growth of South Hampshire

The second principle enunciated in the draft Welborne Plan is that Welborne should support the economic

growth of South Hampshire. This has three dimensions according the draft Welborne Plan:

Provision of employment space that will accommodate businesses in a range of the sub-region’s priority

sectors. Figure 2 lists the PUSH/Solent LEP Priority Sectors

Taking into consideration the ‘Cities First’ policy embedded in the PUSH Economic Strategy which

emphasises Portsmouth and Southampton as the major concentrations of employment in South

Hampshire.

Ensuring that whatever business space is promoted at Welborne complements rather than competes

with those activities which Solent LEP and its partners are seeking to attract to the Solent Enterprise

Zone.


Solent LEP, the HCA, FBC and Gosport Borough Council are particularly seeking to attract marine, aerospace

and aviation sectors to the Solent Enterprise Zone. The strategy is to build a centre of excellence in these

related, engineering-based, activities. The success of the Enterprise Zone will probably depend on the desire

of such firms to be co-located. Fareham College have submitted a planning application to allow it to build a

new Centre of Excellence for Engineering, Manufacturing and Advanced Skills Technology.

Figure 2: PUSH Economic Strategy Priority Sectors


3. The Current Market for Employment Space and Future Trends

Key Points

There has been substantial provision of B1a office space in South Hampshire in the past decade. There is a

significant stock of vacant office space in the sub-region, and a significant number of as yet unimplemented

schemes with planning permission for office development. There is also evidence that M27 business parks

are being looked on less favourably by prospective occupiers than city centre locations. In the light of these

facts, it is unlikely that new office development will be brought forward at Welborne in the early phases of

the development (pre 2020) and perhaps for some time after 2020.

In contrast very little warehouse (B8) and industrial (B2) space was developed in the decade 2000-2010, and

the overall stock of such space fell over this decade. There is a significant stock of vacant industrial and

warehouse space, but much of this is likely to be functionally redundant. All the indications point in the

short term to increased demand for distribution (B8) space, and probably for B1c and B1b uses, with a focus

on sites in the M27 corridor. In terms of enabling the creation of jobs at Welborne in the early stages of

development, these activities (B8, B1c and B1b) represent the best prospects for securing business space

development and associated jobs.

While traditionally Development Plans have distinguished between the different classes of employment land

(B1, B2, B8), the boundaries between use classes are becoming increasingly blurred, with buildings having a

mixture of ‘production’ space or warehousing and also an element of offices. The range of users of office

accommodation has also become more varied, as modern offices can be subdivided as occupiers wish and

they therefore lend themselves to be used for a wide range of activities, including providing services direct to

members of the public.

It is important that the Welborne Employment Strategy is rooted in market realities, but equally the Strategy

covers the period from when development is anticipated to start in 2016 through to completion, some 20 or

so years later. There is no way that the pattern of demand for employment space can be forecast over this

period of time. The long time frame of the strategy would indicate that policies for development of

employment space need to be flexible rather than prescriptive; to set out principles, and only indicative

quantities of floorspace; and for the strategy to be reviewed at regular intervals.

To illustrate this point, looking back over the past 25 years (to 1988), there have been two property market

booms and two busts. In this time frame we have seen the growth of out of town business parks, and then

the return to favour of city centre office locations that have good public transport access and a wide choice of

shops, restaurants, cafes and other amenities. We have seen the emergence of large scale out of town retail

and leisure facilities, and the shift of policy away from development of these centres. Over the next 25 years


similar big shifts in development patterns are likely to be evident, with new occupier requirements likely to

emerge as technology changes.

In terms of the last decade, provision of new employment floorspace in South Hampshire has been dominated

by provision of B1 space, the great bulk of this being (almost certainly) B1a office floorspace. On average

42,100 sq m of B space has been developed each year between 2000 and 2012, compared with just 3,900 sq m

of B2 space and 4,500 sq m of B8 space. Significant volumes of new B1 floorspace has been provided in

locations close to motorway junctions on the M27, in contrast to the historic pattern of development of office

space in Southampton and Portsmouth.

The stock of office floorspace in the Core PUSH area in 2008 was around 1.3 million sq m, while over 0.5

million sq m of new B1 space has been built since 2000. The stock of B1 floorspace has therefore undergone

substantial renewal in the past 13 years. Vacancy rates soared from 2009 onwards, peaking in 2011, but have

since fallen. However, there is over 100,000 sq m of vacant office space, representing 10% of the stock. Much

of this is likely to be functionally redundant and therefore meeting future occupier needs may require

redevelopment or new provision of space.

The short term prospects for office development in the M27 corridor are poor because there is still an

overhang of new property available, and the lack of demand reflected in low rents constrains viability. The

only new development in the next few years likely to arise will be in response to a specific occupier

requirement. No speculative development is likely to take place for some time. Yet agents report a shortage

of quality stock in Southampton and in Portsmouth. So as confidence starts to return to the economy,

demand is likely to pick up from current levels.

The general view of agents seems to be that medium and larger scale office requirements are in future likely

to be re-oriented back to the cities – Southampton and Portsmouth, and away from motorway based business

parks. The reason for this trend is because city centres can be more readily accessed by public transport, and

offer a more attractive working environment for staff; while congestion on the M27 in peak hours is making

the motorway based business parks less accessible. In the current public spending environment, it is not

possible to foresee major investment that would reverse growing congestion on the M27.

With significant extant planning permissions and allocations for offices (B1) and vacant office accommodation

at Lakeside North Harbour at Junction 12 on the M27 and Solent Business Park at Junction 9 of the M27,

development of office accommodation at Welborne at any stage in the next decade years is unlikely, except

perhaps in conjunction with other facilities (B1b, B1c, B2, or B8 uses) or as a one off requirement where a

bespoke solution is required. However with housing development only anticipated to start in 2016, there is

little pressure to deliver significant number of jobs until after 2020.

The current market for distribution and industrial space is almost the precise opposite to that of the office

market. Over the period since 2000 very modest volumes of new industrial (B2) and distribution (B8) space has

been built – though data is not available separately on B1b and B1c developments. From 2000-12, less than

10,000 sq m of new B2 and B8 space has been built each year in the Core PUSH area.


The relative absence of industrial and warehouse space developed over the period since 2000, has happened

at the same time as the stock of B2 and B8 space has been falling (at least over the period 2003-2008 for

which data is available. Thus, new development of B2 and B8 space has essentially been replacement activity

rather than net additions to the stock of such premises. This has entailed a shift in location away from sites

with poor accessibility to sites with good access to the national motorway network.

The current position is that there are over 185,000 sq m of vacant industrial and warehouse space in the Core

PUSH area, with particular concentrations in Eastleigh (a third of the Core PUSH vacant space), Portsmouth

(24%) and Fareham (15%). Overall, an estimated 11% of the stock of such properties is vacant. Much of the

stock may be functionally redundant. The figures on vacancies do not include space at Ford’s 18 ha

Southampton plant adjacent to Junction 5 of the M27 which closed in July 2013.

Notwithstanding the volume of vacant space, agents report signs of recovery in the market, with

improvement, from a landlord perspective, in lease terms and reductions in the incentive packages being

offered for distribution space; combined with specific shortages of availability for larger distribution units in

key locations. Much of this demand is being driven by the major change in the distribution channels for

consumer goods that is being driven by the year by year growth in on-line shopping.

A more detailed analysis of the office, industrial and distribution market in South Hampshire is presented in

Appendix 1. Appendix 2 contains an analysis of the key strategic sites that Welborne might compete with or

complement in terms of the overall economic development strategy for South Hampshire.

Wessex Economics has also updated forecasts of future requirements for offices, industrial and warehousing

space to 2026 prepared by PUSH in 2010 (see Appendix 3). This analysis shows a significant increase in the

forecast requirement for B2/B8 space and a reduction in the requirement for office floorspace compared to

previous forecasts. The key drivers underpinning this shift in anticipated requirements result from new

employment forecasts that anticipate lower job growth than previously anticipated in the business services

sector and greater efficiency in the use of office space, but increasingly space hungry B8 requirements.

In terms of extant permissions and allocated land, the position appears to be that there are many fewer

schemes with permission for B8/B2 development than for B1 development, though the position is obscured by

the large amount of permissions and allocated land covered by a generic ‘all B classes’ permission or

allocation.

All the indications point in the short term to more pressure emerging for distribution and probably for B1c and

B1b uses, particularly in the M27 corridor; while the office market languishes. This pattern is driven primarily

by the continuing reorganisation of distribution channels associated with the growth of on-line consumer

expenditure; while in the office sector there is a shortage of requirements, but also existing space still to be

taken up.


The general view is there is still a substantial way to go before the proportion of consumer expenditure

undertaken on-line reaches its peak, so the growth in requirement for distribution hubs is likely to be

sustained for some while.

In planning for employment space provision at Welborne it is also important to consider a number of other

important trends:

The increasing use of employment sites for a wide range of uses other than industrial, warehouse or

industrial purposes. In many designated employment areas one can observe a great diversity of

activities such as dentists’, doctors’, physiotherapists’ and vets’ practices; nurseries and schools; gyms

and alternative therapy centres; and hotels, sandwich or fast food outlets. These activities are

important sources of employment, and often complement conventional office accommodation.

A similar trend is that the boundaries between the use classes are becoming increasingly blurred. For

example it is now commonplace for good quality industrial units (probably categorised as B1c) to have

mezzanine floors with proper office accommodation, as well as production facilities. In a similar way

increasing numbers of businesses sell both to the public but have a significant internet based business,

so require a mix of customer facing space, and space for order fulfilment. Units with secure yard space

are also attractive to many occupiers.

Another long term trend is the increasing likelihood that occupiers may have requirements for space

with multiple functions that cut across the traditional use class boundaries. For example distribution

hubs built to fulfil orders to consumers who buy on-line, may be linked with call centres that deal with

telesales or customer enquiries, and have some show space. It is also possible to envisage how clean

manufacturing technologies (eg 3D printing) could be accommodated in the same building as marketing,

design, management, and distribution functions.


4. Draft Plan Proposals for Jobs and Employment Floorspace

Key Points

A key principle of the draft Welborne Plan has been to seek to ensure that for every home built there is an

equivalent number of jobs, a policy intended to encourage self-containment. The draft Plan provides for

provision of 6,500 new homes and up to 78,650 sq m of employment space, which is expected to

accommodate between 4,000 and 4,400 jobs.

The draft Plan sets out that it is expected that over time 1,250 jobs will be created at Welborne in non-B class

developments (e.g. schools, retail, health), and that an estimated 1,650 people will work from or at home.

The Plan is based therefore on at total of between 6,900 and 7,300 jobs being located in Welborne, a

dwelling to jobs ratio of between 1.06 and 1.12 jobs per dwelling.

If the principle of self-containment is retained, and the assumptions underpinning the calculation of how

many jobs are associated with different activities are correct, there is very little flexibility in the plan to alter

the planned mix of employment uses – essentially the split between provision of office and

industrial/warehousing space.

Yet the Welborne Plan needs to be flexible to change to market conditions, changes in technology, how

commercial buildings are used, and changing patterns of employment. It is an important part of this review

therefore to consider how important it is to ensure that for every home built there is an equivalent number

of jobs, or whether balance between jobs and homes should be just one of a number of objectives guiding

the development of Welborne.

The draft Welborne Plan is based on the development of 6,500 new homes and up to 78,650 sq m of

employment space, which is expected to accommodate between 4,000 and 4,400 jobs. The plan sets out that

it is expected that over time 1,250 jobs will be created at Welborne in non-B class developments (e.g. schools,

retail, health), and that an estimated 1,650 people will work from or at home ( see Table 5.2 in the draft Plan).

The Plan is based therefore on at total of between 6,900 and 7,300 jobs being located in Welborne, a dwelling

to jobs ratio of between 1.06 and 1.12 jobs per dwelling. The homes to jobs ratio has hitherto played an

important part of the strategic planning for Welborne, being seen as an important way of giving expression to

the objectives of self-containment.

It is worth identifying the different components and underlying assumptions that underpin the planned level

of between 6,900 to 7,300 jobs. These are:

The estimated number of residents who will work at or from home in 2050 (some 10-15 years after

completion of all new homes)


The estimate of 1,250 people working in activities accommodated in buildings other than employment

(B class) space, such as shops, schools, residential care homes, primary health care facilities etc

The planned mix of between 39,000 and 44,000 sq m of B1 office floorspace and between 35,000 and

40,000 sq m of industrial and distribution (B2/B8) space

Assumed floorspace per worker ratios of 12 sq m/worker in office space and around 42.5 sq m/worker

for industrial and distribution space

Assumptions about site coverage for land allocated for employment uses (the footprint of the building

as expressed as a % per ha) and the number of floors to be developed in each building (ie single storey

or multiple floors).

The existing allocation of land at Welborne for employment purposes has been determined by a top down

process driven:

By a policy decision to broadly match the number of homes to be provided at Welborne with an

equivalent number of jobs; this has been seen to be an important way to achieve the objective of self-

containment

through a certain assumed mix of office and industrial premises; the two different formats for

development deliver very different number of jobs per 1,000 sq m (83 jobs per 1,000 sq m for offices, 22

jobs per 1,000 sq m for industrial and distribution space)

allocation of land for these different employment uses, where probably for every ha of office use

around 12,000 sq m of office floorspace can be delivered (40% site coverage with 3 storey

development) compared to 5,000 for industrial and warehouse space (50%) site coverage with single

storey development.

This helps to highlight the challenge that will be faced in making any substantive changes to the masterplan as

presented in the Welborne Plan. These challenges are discussed below before recommendations that flow

from this review of the Employment Strategy are set out. This is because it is important to show the

significance of quite modest changes in the draft Plan strategy for employment would be for the Welborne

Plan as a whole.

The implications that would flow from certain amendments to the Employment Strategy set out in the draft

Welborne Plan, based on the assumption that the principle of self-containment is maintained, are set out

below. The principle of self-containment is given practical expression by the requirement to provide one job

for each new home.

A change in the anticipated mix of office and industrial/distribution space: Any significant shift from the

current proposed balance between office and industrial/distribution space, to provide a higher proportion of

industrial/distribution floorspace would mean that the policy objective of a 1:1 match of homes and jobs

would not be deliverable. This is because industrial/distribution space accommodates significantly fewer jobs

per hectare (c 115 jobs) than offices (c1,000). The differential is so substantial that even a modest shift of the

employment land budget away from offices to provide more land for industrial/distribution space would make

it impossible to achieve the 1:1 match of homes and jobs. The converse is also true. If it were realistic to

anticipate that a higher proportion of the B class space could be offices, less land would be required for


employment purposes to meet the 1:1 match of homes and jobs, though this might not be desirable in terms

of providing a mix of different types of job in Welborne.

A change in the estimated number of jobs accommodated in non B class space: The current estimate of the

number of jobs provided in non-B class buildings accounts for 1,250 jobs representing around 17% of total

planned jobs at Welborne. If this number of jobs could be increased then it would either improve the jobs:

homes ratio, or reduce dependency on jobs generated in connection with business space development. The

reverse is the case, if it proves that the 1,250 jobs provided in non B class space is an overestimate. This would

make the jobs: homes ratio worse or require greater provision of jobs through provision of business space

development (or home working).

A change in the estimated number of people who work from home: The draft strategy anticipates that by

2050 (37 years hence) around 22% of people living in Welborne will be working from or at home. This

estimate is therefore very important in maintaining the jobs: homes balance. If, in practice, this level of

working from or at home does not materialise, then it will not be possible to ensure the overall balance of jobs

and homes, unless the other elements of the employment strategy adjust upwards; that is more people work

in the offices and other business class premises or non-business premises in Welborne.

This brief discussion serves to highlight a fundamental aspect of the employment strategy as expressed in the

draft Welborne Plan. Specifically, if the stated policy objective of maintaining a balance between jobs and

homes is maintained, any changes to the other elements of the strategy – underlying assumptions about the

quantum of jobs linked to different activities, changes to the mix of employment floorspace, or land budgets,

has to be compensated by a change elsewhere in the employment strategy. Greater flexibility could only be

achieved by relaxing the jobs: homes relationship that is currently the key objective shaping the whole

employment strategy.

It is also important to bear in mind that FBC as planning authority has no direct control over the level of

employment that is actually created at Welborne. For example, FBC has no control over the number of people

who will work from home; all it can do is to create the right environment that allows people to work from

home if they wish to. Likewise FBC can plan for a certain level of B1 office provision and B1c, B2 and B8 space,

but the volume, mix and timing of development of such space will be determined by the market, which will be

determined by occupier demand and the economics of new development; and the number of jobs associated

with such developments will change over time.

To state the above is not an attempt to avoid proper strategic planning, but to recognise that when planning

for a new community that will be built out over the next 28 years, how people live, the business environment

and how people work will change substantially. To make this point, just consider how much has changed in

the pattern of people’s lives since 1985 (28 years ago) when Mrs Thatcher was Prime Minister, the internet

scarcely existed, the Soviet Union still existed, the miner’s strike ended, and the first mobile telephone call

was made.


Over the period since 1985 the shape of the UK economy has changed. Over time the ratio of employment to

floorspace has changed (most recently resulting in more people per sq m in offices space; and fewer people

per sq m in warehousing space). The numbers of self-employed people have increased; part-time and flexible

working practices have become more widespread. Trade union membership has fallen dramatically. New

developments in working practices continue to emerge - for example the development of fully mobile working

based on tablets and smart phones and the growth in zero-hours contracts.

Thus the Welborne Plan must have sufficient flexibility to respond to changes in the economy and society.

The Welborne Plan quite appropriately starts from where we are now in evaluating the relationship of jobs

and homes, but it will need to take into consideration the certainty that these relationships will change over

time; and they will do so through large numbers of business, individual and family decisions informed by

factors such as the cost of travel, the cost of housing and business space, quality of life, salary and pay levels,

labour costs, schools and access to skilled labour etc.


5. Review of Assumptions in the Draft Employment Strategy

Key Points

Wessex Economics have reviewed the underlying assumptions contained in the draft Welborne Plan. There

are a number of issues that the review highlights, one of which is fundamental to the assessment of the

development capacity of land identified for employment purposes.

Wessex Economics believes that the capacity of the employment land identified in the masterplan to deliver

employment floorspace has been underestimated. It appears to have been assumed that all business space is

built as single storey buildings. This is a fair assumption for warehouses, but Wessex Economics would

anticipate that offices would be built over two or three storeys. An increasing proportion of industrial

buildings also incorporate mezzanine floors. Thus the draft Plan under-estimates how much floorspace can be

delivered on the land identified for employment purposes. So there is more capacity for floorspace and jobs

on the employment land than assumed in the draft Plan.

Making allowance for the likelihood that around 8,000 to 12,000 sq m of offices can be built on each hectare

(10,000 sq m), means that the same amount of office floorspace as set out in the draft plan could be delivered

on less land than previously assumed; and that proportionately more land can be devoted to warehouse and

industrial uses which do not generate as many jobs per 1,000 sq m of floorspace. Wessex Economics estimate

that the capacity of land allocated for employment space, could therefore accommodate broadly an

equivalent number of jobs as homes, even allowing for greater provision of warehouse and industrial space in

response to anticipated demand.

In one other respect Wessex Economics believe the assumptions set out in the draft Plan are unsafe. The

forecast number of people who will work at or from home is, in our opinion, high. Even with policies that

actively encourage those who wish to work from home to live in Welborne, and make it easy for them to do

so, to boost home working from current levels (1 in 20 of the population in Fareham) to 1 in 5 by 2050 in

Welborne, assumes a major shift in patterns of work organisation in the UK and in South Hampshire. Wessex

Economics believe a more robust assumption would be for 1,150, rather than 1,650, to work from or at home

in 2050.


The Planning Use Classes

This section evaluates whether the different components of the Employment Strategy set out in the draft

Welborne Plan are based on sound assumptions. At the outset it is useful to reiterate that a major part of this

study is focused on the provision of employment land and buildings which are defined by reference to

Planning Use Class.

B class uses comprise the following:

B1 use class: buildings used for the purpose of general business space which is broken down into three

categories:

B1a - offices

B1b – research and development (R&D) space

B1c – business/industrial activity that will not cause detriment to the amenity of the area; in

this report we refer to these businesses as clean-tech businesses

B2 use class: general industrial activities

B8 use class: storage and distribution activities.

It is important to bear in mind that many jobs are accommodated in other forms of development including shops and

restaurants; care homes and hotels; and major institutions such as hospitals, schools, universities and leisure facilities.

These are referred to in this report as ‘non-B uses’.

Relationship of Jobs and Floorspace

It is standard practice to work out the relationship between jobs and business floorspace using standard ratios

of floorspace per worker, often referred to as employment densities. Guidance on appropriate densities to

use is contained in the ‘Employment Densities Guide, Edition 2’ published by the HCA and OffPAT in 2010. In

the work that underpins the Employment Strategy two ratios are used:

An assumed 12 sq m per job for office space being the general figure applied for general offices,

business parks and serviced offices. A lower ratio (8 sq m per job) applies to call centres, but a higher

figure of 47 sq m per job for IT/data centres. All these uses would be classified as B1a use.

An assumed 42.5 sq m per job which is a mid-point of the general figure for B2 industrial use (36 sq m

per job) and the ratio for light industry (B1c) which is 47 sq m per job. It is important to note that much

more space per worker applies to B8 space; general warehousing – 70 sq m per job; and 80 sq m per job

for large scale and high bay warehousing.

The figures used in the draft Employment Strategy to calculate the relationship of jobs to floorspace are

therefore appropriate on the assumption that the development is confined to B1a office used and general B2

or B1c use. If there was significant take up of employment at Welborne for distribution (B8 warehouse use)

the number of jobs delivered by the allocation of land for B1 and B2/B8 uses would fall from that assumed in

the draft Welborne Plan.


The Relationship between Land Allocation, Floorspace and Jobs

Another set of assumptions that are material in evaluating the robustness of the draft Employment Strategy is

the relationship between the assumed B class floorspace and the quantum of land allocated for employment.

In the most recent version of the Welborne Masterplan (August 2013) around 20 ha of employment land are

identified for employment uses. In master planning it is conventional to assume that a plot ratio of 40% for

employment uses. A plot ratio measures the relationship between the footprint of a building and the site area.

Thus every hectare (10,000 sq m) of employment land, can accommodate a building with a footprint of 4,000

sq m. The remaining 6,000 sq m are required for parking, access roads, and landscaping.

However, B1a office space will typically be developed over two or three storeys, so that in reality for every

hectare of land, it is possible to provide between 8,000 and 12,000 sq m of office floorspace. In contrast a

traditional warehouse or industrial building will be a single storey structure, so only 4,000 sq m of warehouse

space is provided per hectare. In recent times there has been increased development of industrial and

warehouse space (B1c, B2, B8) with mezzanine floors. Where this format of development is adopted this

increases the floorspace that can be delivered per ha, up to a maximum of 8,000 sq m per hectare.

These different formats for development, when combined with different employment densities, means that

very different numbers of jobs can be expected to be associated with each hectare of land allocated for

employment uses, as shown in Figure 3. On the assumption that, in principle, any of the B use classes might

be deemed acceptable on land designated for employment purposes at Welborne, the number of jobs

delivered could vary between 50 and 1,000 jobs per ha.

Figure 3: Jobs per Hectare with Different Uses and Development Formats at 40% Site Coverage

Source: Wessex Economics, HCA Employment Densities Guide, 2010

Note: In this table no adjustment has been made for the difference between gross external floorspace, and net internal floorspace.

The figures for jobs are therefore overstated, but illustrate the scale of differences between jobs associated with different types of

development. Figure 6, p35 shows the calculation taking into account gross to net floorspace adjustments.

In practice the whole 20 hectares of allocated land at Welborne would not be developed out either exclusively

for B1a offices at 3 storeys, nor for large scale warehousing. But the number of jobs provided at Welborne will

be sensitive to the mix of uses developed within the SDA; and these cannot be forecast at this stage with any

high degree of confidence. This would indicate that it would be more appropriate to set broad objectives and


land allocations in terms of the mix of employment uses to be encouraged at Welborne, than a specific jobs

target.

Jobs in Shops, Schools, Healthcare and other Non B Class Jobs

The report ‘New Community North of Fareham – Final Paper on Workspace and Employment, April 2013’

prepared by Hardisty Jones Associates on behalf of FBC estimates that some 1,250 jobs will be created in

connection with service provision in non-B use class buildings. This includes 500 jobs in retail services, 150 in

residential care facilities, and 600 jobs in civic services including health care and education. Wessex

Economics have not had access to the detailed calculations that underpin these estimates, but the

methodology for making such estimates is well developed, and we would be confident that the estimates

provide the right order of magnitude for such jobs.

However, we would make the following observations on these estimates.

First, the creation of these sorts of jobs will tend to lag the growth in population of Welborne.

Development of new shops and other facilities will only take place once a certain critical mass has been

achieved. In terms of private sector investment in new retail development, developers and prospective

occupiers will assess the spending power of the population within the local catchment area, and this will

inform when they proceed with development. Likewise public service providers are unlikely to provide

new facilities until nearby facilities are over-capacity, and there is a critical mass of locally based need

that justifies investment. The creation of these types of jobs will therefore always tend to lag

population growth.

Second, Welborne will be built out over an extended period of time, with final completion of all new

homes not anticipated for 20-25 years. There is scope for huge change in patterns of retail spending

and service delivery over this period of time. Local service centres will still provide a focus for personal

services; neither dental services nor nail bars are ever likely to be provided over the internet! But there

may be much reduced need to visit doctors as remote diagnosis replaces a visit to the doctor’s. Places

to eat, drink and socialise will still exist; but it may be more debatable whether Post Offices, banks and a

number of local shops will exist in the form we know today.

Working at or from Home

The report ‘New Community North of Fareham – Final Paper on Workspace and Employment, April 2013’ sets

out estimates that by 2050 some 1,650 people resident in Welborne will be working mainly or wholly from

home by 2050, equivalent to more than 1 in 5 of the working population of Welborne (22.2%). This estimate

is based on the current level of working at or from home in work in the South East region which is reported in

the Workspace and Employment Paper to be 16.5% of the working population; and forward projection of the

observed increase of 1.7% in homeworking in the decade 2001 to 2011 in over the next 3 decades.


Wessex Economics can anticipate that the numbers of people who work mainly or wholly from home will

increase from current levels and that Welborne may well be more likely to attract people who work from

home than some other locations. It will also be possible to boost the number of those working at or from

home by proactively planning to make it easier for people to do so. Developments in technology, changes in

working practices, and the probability that the cost and difficulty of travel will increase, will all make home

working easier and more attractive to people.

For example in the next 25 years it is likely that we will see much greater use of video conferencing; and the

human protocols of how to make such conferencing work as effectively as face to face meetings will develop.

It is worth remembering that it took time for people to develop social protocols of how to use the telephone

for business purposes and to learn what email can be used for and what sort of business cannot be conducted

by email.

However the social interaction associated with working alongside others is unlikely to be ever adequately

replaced by remote interactions; and the increasing complexity of modern business increasingly requires

higher levels of team work, more interaction and co-ordination of complex processes. This is why business

places such an emphasis on recruiting people with good inter-personal skills, and with experience of team

working. The work undertaken by many businesses do not lend themselves to remote working. Jobs

requiring supervision, close team work, shared learning etc are not going to be readily undertaken outside of a

formal workspace. Many people also value the social aspects of working with others.

It is also pertinent to note that the 2011 Census shows that those working from home in Fareham only

account for 5.5% of the working population. Therefore to move from 5.5% of workers who work at or from

home in the Borough as a whole to over 20% on Welborne over the next 37 years is a substantial change,

albeit over a long period of time. This level of home working does not exist anywhere at present. For

example, at Kings Hill, a new settlement in the Borough of Tonbridge and Malling, with around 2,500 new

homes built to date, and 1 million sq ft in a modern business park, only 7.5% of working residents work from

or at home (2011 Census).

The decade 2001 to 2011 has also been a decade in which homeworking has become practical for many

people with the development of broadband networks. It is quite possible that a high proportion of those for

whom it is practical to work from home have made the shift in the decade to 2011, and that it will be hard to

replicate the speed of growth of home based working in the current and future decades, unless businesses

very deliberately seek to deconstruct traditional business culture. Collaborative working which requires

people to work together as part of teams is likely to remain the dominant form of work organisation for

decades to come.

What is probably more likely is that the number of those who work primarily from home or at home will

continue to increase. But the larger increase will be of those who sometimes work from home. In the USA

24% of employed people report that they work from home at least some hours each week according to the US

Bureau of Labour; but only 2.5% of employees (that is excluding the self-employed), consider home as their


primary workplace. One would generally expect the UK to lag the USA in new working practices, though

pressure on transport infrastructure across much of the USA is less than in the UK.

Wessex Economics believe that the level of homeworking assumed in the draft Welborne Plan is unrealistic.

Wessex Economics would suggest that by 2040 it would be reasonable to assume that 15% of those residents

of Welborne who are in work would work from or at home. This would represent around 1,150 workers. This

takes into account the fact that a new development such as Welborne is likely to attract a high proportion of

knowledge workers whose work can potentially be undertaken from home; and it assumes that FBC and other

councils will work proactively to encourage micro-businesses in Welborne.

If the logic of this assessment is accepted, and the goal of maintaining a 1:1 jobs: homes balance were to be

retained, it implies seeking to identify how another 500 jobs should be provided at Welborne. However for

reasons set out later in this report, this cannot be used to justify further allocation of employment.

Moreover, Wessex Economics would emphasise that this level of homeworking is only an estimate. There is

much uncertainty about how patterns of working from home will change over time. Therefore the 15%

estimate of residents working from home could be an underestimate if trends such as the growth of self-

employment, the growth of zero-hours contracts, and employees who have no formal place of work because

they are fully mobile, continue to gather pace.

Type of Business Space and Type of Jobs The type of jobs created (in terms of salaries, skill levels, full/part time, male/female employment) will vary

depending on the type of employment space developed.

In general terms, office based employment has a higher representation of knowledge workers, and hence a

higher representation of higher skill employees (as measured by qualifications) than in industrial and

distribution activities. This means that average salary levels tend to be higher for office based work than for

distribution activities, with a higher representation of women and significant levels of part time work.

Wholesale distribution activities should not be regarded as low skill work, but generally salary levels are lower

than in office based knowledge work, and the requirement for higher level qualifications are less. Shift work

may be more common, to ensure 24 hour operation and may increase over time as road networks become yet

more congested. Overall there is a significant bias to male employment. Average salary levels are typically

below those of office based employees and the averages across all employment sectors.

In terms of industrial activities that may be accommodated in B1b, B1c and B2 space it is much less easy to

generalise about employment characteristics, since businesses that occupy such space may include knowledge

based industries with significant numbers of highly qualified staff; or traditional industries with staff with trade

skills, but few formal qualifications, and operating in very price competitive markets which constrains pay

levels.


As a general rule, those with higher level skills, and who work full time are more willing to travel longer

distances to work than those on lower wages, and who work part time. This reflects the fact that more highly

paid staff are better able to cover the costs of travel, and their skills are more specialist and so they may have

fewer local opportunities. The lower paid are likely to have more opportunities for local employment and the

impact of travel cost on effective take home pay is proportionately higher than for more highly paid people.


6. The Objective of Self Containment

Key Points

Notwithstanding the assessment that it may be possible to achieve a broad balance between the number of

jobs and homes accommodated in Welborne, Wessex Economics believe that the pursuit of a direct 1:1

relationship between homes and jobs is unhelpful; and adherence to this goal could actually distort the proper

planning of Welborne.

It is clearly a sensible goal of policy to seek to locate jobs and homes in close proximity, since this makes it

possible for people to work close to where they live which is desirable for sustainability and quality of life

reasons. However, planning authorities have no control over where people live and where they work. The

trend to greater levels of skill specialisation, which is an important to productivity growth, tends to work

against the objective of encouraging people to live close to where they work. This is particularly so, since

there are very many factors other than the time and monetary cost of an individual’s travel to work that

influence where people choose to live.

The likely outcome of seeking to achieve a match between the number of homes built at Welborne and the

number of jobs, if it were achieved, is that there will be significant out-commuting from Welborne, matched

by significant in-commuting. This outcome would not achieve the sustainability objectives which underpinned

the policy proposal that the number of jobs at Welborne should match the number of homes. Wessex

Economics therefore recommend that this policy objective ceases to be the key determinant guiding policy

decisions on the quantum and type of employment space to be provided at Welborne.

This does not mean that Fareham Borough Council should abandon the objective of encouraging people to live

close to their work. Planning for jobs in Welborne is important for many different reasons, one of which is

that it creates the opportunity for people to work locally, and is particularly important of creating employment

opportunities for lower income residents. However, it is a recognition that FBC cannot exert any substantive

influence over the pattern of hiring by employers or where local residents choose to work. Greater focus

should be given to ensuring that residents of Welborne can get to work by sustainable modes of transport.

Actions that can be taken to ensure that residents can travel to work in a sustainable way and that

opportunities for work are available locally include ensuring:

as far as possible that jobs are created at Welborne as the population grows, which implies having regard

to the commercial reality of the type of employment space that occupiers require at a particular point in

time

that there are sustainable modes of transport to access the large number of jobs in central and north east

Fareham and to Fareham station

that opportunities are taken to foster small business start-up, home working and provision of appropriate

sized business space developments to the north of the M27, but outside the SDA.


Sustainability and Self-Containment

Sustainability and self-containment are not the same thing. Self-containment conveys the concept of that

people work in the same community as which they live, and can access all the services they need within that

community. Sustainability has many different definitions, but conveys the objective of encouraging lifestyles

and working practices, that place less pressure on the natural resources of the world, and therefore can be

sustained in the long-run without, for example, dependence on fossil fuels.

In promoting sustainable development it is clearly desirable if people can live close to where they work since

this reduces the time and energy used in travelling to work. There are a number of individual and societal

benefits in living close to one’s place of work:

Less time and money wasted unproductively in getting to and from work, releasing time, energy and

money for other aspects of life

Enhanced capacity to walk or cycle to work with benefits in terms of personal health, reduced costs of

travel and greatly reduced environmental impacts compared to use of vehicles

Societal benefits in terms of reduced congestion costs, reduced requirements to invest in additional

transport infrastructure, savings in dealing with road traffic accidents

Reduced environmental impacts in term of noise and pollution, and if car parking requirements are

reduced, more efficient use of land

More efficient use of energy, in particularly savings in the use of fossil fuels and hence reduction in

carbon emissions.

This long list of benefits makes it clear that it is clearly a sensible goal of policy to seek to locate jobs and

homes in close proximity, since this makes it possible for people to work close to where they live and

therefore more likely to be able to walk or cycle to work or to use buses; or to only have to drive a short

distance to work. All these outcomes are preferable to longer distance commuting in terms of energy use, the

impact on infrastructure usage, and environmental impact.

The Relationship of Home and Workplace

However, it is important also to address the question of the degree to which people who live in Welborne will

in fact be able to, or will choose to, work at Welborne. It must be acknowledged that at present only a

minority of people walk or cycle to work. In Fareham in 2011 71% of those in work travelled to work by car,

7% walked and 5% cycled. Data is not yet available from the 2011 Census on how far people travel to work,

but almost certainly the Census data will show that the average distance travelled to work in South Hampshire

has increased since 2001. The key factor explaining these journey to work patterns are the specialised nature

of jobs and skills.

Advanced modern economies are characterised by ever increasing levels of skill specialisation. This is a major

factor in productivity growth and fostering productive growth is an important objective nationally and in South

Hampshire. As levels of specialisation increase, the process of matching job requirements to individual skills


becomes more difficult. As a result employees widen their geographic area of job search and employers, in

search for the best person for the job, are willing to pay more for the best people for the job. Often higher

pay covers the additional cost of employees’ travel from further afield.

This explains why economists increasingly regard cities as central to economic growth. Cities have large labour

markets, and the concentration of jobs in central areas of cities makes it easier to find the person with the

right specialist skills to fulfil a role. The critical mass of city centre jobs also increases the viability of public

transport and fosters investment in public transport, which then further extends the reach of the city centre

labour market. This is why, decade by decade, the extent of the London Travel to Work Area has extended

further and further from the centre of London. This is linked to the fact that the economy of London has

grown faster than anywhere else in the UK since the early 1990s.

On the basis of 2001 Census data, South Hampshire has two travel to work areas (see Figure 4). But it is quite

probable that when the 2011 Census results emerge that South Hampshire will comprise a single Travel to

Work area, representing the degree of labour market integration across the whole area. Part of the

competitive position of South Hampshire is an offer to inward investors that the area consists of a single

integrated urban area with a population of over 1 million people.

In view of this pattern of labour market specialisation, the likelihood is that the majority of those who work in

Welborne will live outside the area; and the majority of those who live in Welborne and who are in work will

work outside of Welborne. There is also evidence3 that a high proportion of those who buy new homes in

Welborne will not be local to Fareham, but be drawn from the wider South Hampshire area. Many of these

will move to live Welborne, but still travel to their existing place of work.

Figure 4: South Hampshire Travel to Work Areas

Source: 2001 Census

3 See the New Community North of Fareham Housing Market Assessment, DTZ & Wessex Economics March 2013,

http://www.fareham.gov.uk/PDF/planning/new_community/housingmarketassessment.pdf

http://www.fareham.gov.uk/PDF/planning/new_community/housingmarketassessment.pdf


The draft Welborne Plan states in discussing the principle of a balanced community that the aim is to avoid

significant net in or out commuting. This objective might indeed be achieved since it is framed in terms of net

commuting flows, by having large volumes of out-commuting balanced by an equally large volume of in-

commuting.

This is the reality of competitive labour markets in which employers do not take into account where

prospective employees live when making hiring decisions. It is also a product of the way in which the housing

market works. People who can afford market housing will take all sorts of considerations into account in

deciding where they want to live, with the duration and mode of their journey to work being only one of many

factors. New residents coming to live in Welborne are more likely to be attracted to live there by the nature of

the homes being built and the environment, than by the fact they have found a job in Welborne.

It is those in low income jobs, and therefore those living in affordable housing in Welborne, who are on

balance much more likely to work locally. In part this is because they cannot afford the cost of longer distance

travel, and in part it is because lower wages means there is less competition from people living further away

for available local jobs.

This does not mean that Fareham Borough Council needs to abandon the objective of encouraging people to

live close to their work. Planning for jobs in Welborne is important for many different reasons, one of which is

that it creates the opportunity for people to work locally. This is particularly likely to be important to those

who want to work part time, and have generic skills which would allow them to work for a wide variety of

employers. The jobs available to these people will tend to be the lower paid and/or part time jobs. It is also

likely that self-containment will increase over time as jobs become available and local residents apply for

them.

It is also possible that over time, rising costs of travel to work and increasing congestion on transport networks

will encourage people to live closer to their place of work. However it is worth noting that over the long term

the cost of car use has been falling, while the cost of public transport has been increasing (see Figure 5). This

makes reversal of current deep seated trends of increasing car use hard to change. This is not a reason for

taking decisions now that do not make more sustainable patterns of travel possible in the future, but realism

is required in the short to medium term of likely patterns of movement.

In view of this Wessex Economics believes that FBC should retain its overall objective of encouraging self-

containment in Welborne, but it needs to recognise that it cannot exert any substantive influence over the

pattern of hiring by employers or where local residents choose to work. Wessex Economics therefore takes

the view that other factors should also be taken into account in deciding the quantum of employment

floorspace to be provided at Welborne; and there should be no expectation that, once these factors are taken

into account, that the totality of jobs likely to be provided at Welborne will match one for one the number of

new homes to be built.


Figure 5: Long Term Costs of Alternative Transport Use

Local Opportunities for Employment of Welborne Residents

It is a certainty that significant numbers, almost certainly a majority, of the future residents of Welborne who

work, will work outside Welborne. In view of this it is highly desirable in terms of sustainable development

that those residents can find work relatively close at hand and can travel to work using sustainable modes of

transport.

In total there are some 18,100 jobs in Fareham town and 11,400 of these are in Fareham East ward, which

covers the town centre and incorporates various commercial estates on the north eastern side of the town

with good access to Junction 11 of the M27.

The distance from the likely location of the Welborne District Centre into the centre of Fareham is around 1.5

miles by the A32 and 2.5 miles via the M27 and A27. Outside of peak hours the journey time into central

Fareham from Welborne would be no more than 10 minutes.

Residents of Welborne will wish to access jobs in Fareham town. With a high proportion of these jobs located

centrally or close to the A32 there is clearly scope to provide a Bus Rapid Transit scheme to serve Welborne

residents, and this should be regarded as an important part of the employment strategy for Welborne.

A Bus Rapid Transit service that takes people from Welborne to Fareham Rail station will also be an important

part of the strategy, enabling residents to access a wider range of job opportunities in South Hampshire

particularly in the cities using a sustainable mode of transport.


The availability of jobs within Fareham town reduces the perceived requirement to provide employment at

Welborne itself, without undermining the commitment to promoting sustainable patterns of economic

development.


7. Delivery Considerations

Key Points

Wessex Economics does not believe that there will be any significant development of new employment space

at Welborne until the M27 Junction 10 upgrade to provide an all moves junction is completed. The draft

Welborne Plan states that work to deliver this junction will commence in the period 2015-2020, but may not

be completed by 2020. By implication, it is very possible that no new employment floorspace will be available

at Welborne before around 2022.

In the period before the all-moves Junction 10 is completed, FBC should seek to encourage small scale

development of employment floorspace in and around the Welborne site that would not trigger large

increases in traffic volume nor compromise the master-plan. Existing employment space at Dean Farm should

be retained for as long as possible, and opportunities sought to make best use of other existing employment

sites within the SDA and in the rural area surrounding the SDA.

If development proposals are brought forward that would deliver the improvements to Junction 10 at an

earlier date than currently envisaged, or provide a mechanism for funding the improvements, that would

release investment for other infrastructure improvements, these proposals should be given serious

consideration.

From the first, policies should seek to support development of small businesses at Welborne, by providing

appropriate workspaces and infrastructure. Plans for a business incubator should be incorporated into the

District Centre at an early stage, supported by high capacity broad band connection to the District Centre at an

early stage. Provided conventional broad band services are rolled out to domestic users, this will be sufficient

for most people who work from home.

The brief for this study calls for commentary on delivery of employment land, employment space, and hence

on the timing of delivery of jobs. In commenting on these issues, Wessex Economics has not had access to the

overall strategic viability analysis, therefore we have worked from first principles to make a number of

observations on delivery issues.

First, as a general principle it can be expected that residential development will deliver greater development

value than development for employment purposes. This is a major reason why Wessex Economics does not

recommend an increase in the quantum of employment land at the expense of residential land, even if this

were to mean that fewer jobs would be provided at Welborne than homes.

Second, it is hard to conceive that there will be any significant development of new employment space at

Welborne until the M27 Junction 10 upgrade to provide an all moves junction is completed. The draft

Welborne Plan states that work to deliver this junction will commence in the period 2015-2020, but may not


be completed by 2020.

By implication, Wessex Economics would conclude that no substantive development of employment

floorspace at Welborne will be completed before around 2022. This reflects the following considerations:

It is very improbable that any occupier will give serious consideration to locating at Welborne until a

firm date for completion of the junction is known, and in all probability potential occupiers will not even

consider the site until the junction works are completed.

In the current development climate, and in the property financing environment likely to prevail for

some time, no developer will commit to development without a firm occupier commitment (a pre-let or

equivalent). So from a developer perspective completion of the junction improvements is essential.

The analysis done of competing sites highlights that there are development-ready sites for offices at

both Junction 9 and Junction 12 on the M27. There is therefore no pressure on occupiers to even

consider locating at Welborne (Junction 10) until the junction improvements are in place.

The availability of land on the M27 for distribution uses is more restricted, but the all moves Junction 10

will be an even higher priority for a B8 distribution occupier than for other potential occupiers. We

consider below whether such a requirement could be used to bring forward delivery of junction works.

The Ford works at Swaythling closed in June 2013. Solent LEP and Southampton City Council are keen to

attract high value businesses to the site, but its size and proximity to the M27 Junction 5, the

Southampton/Eastleigh urban area and the airport might make it an attractive location for distribution

functions. However, there is no clarity over when the site might be brought forward for redevelopment,

and there are issues that will have to be addressed if HGVs are to use Wide Lane bridge.

The Solent Enterprise Zone is coming forward as an option for a range of occupiers, and commitments

to improve access to the M27 have been made. Making the Enterprise Zone an attractive location for

businesses to locate has higher priority than Welborne in terms of funding for infrastructure

investment.

Thus the prospects of securing development of employment sites before completion of the Junction 10

improvements are not good. However it is reasonable to expect that once a firm date is set for completion for

completion of the Junction 10 works that employment sites will start to be marketed. If a pre-let or bespoke

requirement were to come forward at this stage, this could allow development before the Junction is

completed, and occupation to commence as soon as the Junction is open for use.

The likelihood of this scenario materialising depends on whether the developers are willing to offer a very

good deal; or whether a particular occupier has an urgent requirement for space and a very specific desire to

be located on the M27 and at Welborne. Any developer and occupier would be factoring into their decision

making how certain the junction works are to be completed on time, and the risk to their business if there

were delays

Is there anything that can be done therefore to start to ensure provision of jobs at Welborne before the

completion of the all-move Junction 10?


It is of significance that the major landowner in the south of the designated area, the BST Group, is a

developer and investor in business space and has indicated its desire to develop its landholdings primarily for

business purposes. FBC thus has a delivery partner who wishes to develop business space. Often mixed

residential and business space developments struggle to find developers and investors interested in building

out the employment land allocated in plans.

There is potentially scope for the BST Group to start to market the major development sites and to secure

planning consents for development if the landowner/developer is confident that there will be demand once

the Junction improvements are completed. If planning consents were secured in advance of the Junction

works being completed this could advance the delivery of some employment space by up to 2 years.

In the period before the all-moves Junction 10 is completed, there could be scope to explore the potential for

small scale development of employment floorspace in and around the Welborne site that would not trigger

large increases in traffic volume nor compromise the master-plan.

Dean Farm in the centre of the site already has a number of employment units. The current masterplan

envisages redevelopment of this existing floorspace. However, it would be foolish to displace the existing

businesses at Dean Farm until absolutely essential; and it would make sense to seek to relocate these

businesses elsewhere at Welborne if at all practical.

There is land currently in employment use at Charity Farm and at Crockerhill. Both of these sites, are located

within Welborne, but the current uses may not be optimal in terms of the longer term development of

Welborne. The opportunity should be taken to explore whether development in line with the overall

Employment Strategy for Welborne could be undertaken on these sites at a relatively early date. Other sites

for business use may exist in Funtley and Knowle and other nearby settlements.

The Welborne Plan should be extended to consider the role that these business space clusters within the SDA

and in the surrounding settlements can play in delivery of the Employment Strategy for Welborne, particularly

in the early years when it may be difficult to attract development of the new employment land allocations

prior to the delivery of the all moves Junction 10.

The possibility has also been raised by BST that there might be a way to advance the delivery of the all-moves

Junction 10, through an early deal with major occupiers to provide either a major distribution centre or large

single user office development on land owned by BST to the north of the M27 and west of the A32. The

suggestion is that these might help fund the junction improvements required. It is suggested that this would

kick start employment provision at Welborne, and be a part solution to the issue of funding infrastructure

investment.

It is certainly the case that there would be merit, if it is possible, to bring forward jobs at Welborne in advance

or in parallel with new homes being developed. If there are jobs and homes coming on stream at the same

time, this increases the chance that some of those relocating or taking up new jobs may consider living close


to where they work. Having jobs in place before homes are built, increases the chance that once people move

in they can secure local work as vacancies arise.

It has not been possible to examine in depth the proposals put forward by BST in this study, in terms of

whether there is a realistic prospect of securing an occupier and whether this would indeed be a way of

funding the necessary junction improvements.

In terms of the suggestion that it might be possible to attract a single major office occupier to Welborne in the

near future, Wessex Economics would note that there are other M27 locations that would be keen to attract

any large office occupier and where serviced land is already available. PUSH and Solent LEP might also take

the view that locating at Junction 10 of such an occupier runs counter to the Cities First emphasis of policy,

though the attitude of both organisations might be pragmatic if a significant employer insisted that they

wished to be located at Welborne, and it was linked to expansion or retention of that business.

With regard to the possible establishment of a large distribution hub at Welborne Wessex Economics would

comment that this would probably take up a large proportion of the allocated employment land, but generate

relatively few jobs. As the very first thing to be developed it would very likely shape the perception of

Welborne as a residential and business location in a way that is not helpful. On the other hand if this were to

be the thing that makes the scheme as a whole deliverable, then it would have merits.

If the proposal takes shape, the implications for the Welborne Plan would need to be considered in depth.

Wessex Economics would recommend that the proposals are given serious consideration rather than rejected

out of hand.

These proposals do however demonstrate that BST is serious in its interest and intent to use its landholdings

for development of employment space and this is to be welcomed. It is another factor that supports the

redistribution of some of the employment land allocations shown in the draft Welborne masterplan from the

east of the A32 to the west of the A32.

An indicative trajectory for the development of employment land has been prepared taking into account the

range of factors discussed above. This indicates that large scale development of employment floorspace from

2022. The trajectory and the factors taken into consideration in preparing the trajectory are set out in

Appendix 4.

Another important part of the Employment Strategy is to make Welborne a great place for micro and small

businesses, including those who will work from home. We would expect that significant capacity in terms of

high speed fibre optic broadband will need to be provided into the District Centre and the land allocated for

employment purposes. Provision of the required infrastructure should be a commercial proposition in the

long run for providers, though securing in advance of attraction of occupiers may be an issue.

The connectivity requirement for most home businesses will not exceed those of households, where capacity

requirements are being driven largely by access to entertainment services. Infrastructure providers will


probably appraise the revenue potential of the household base, with home office users just being part of that

assessment. It is doubtful that there would be any need to provide higher capacity services just to meet the

requirements of those who work from home.4

Businesses that have a requirement for significant levels of broadband capacity should be provided for

through specialist facilities in the District Centre. This links to the principle of seeking to ensure provision of a

business incubation centre, which is an important element in the Plan. The latest generation of incubator

spaces are moving toward provision of space for co-working where people share space, as well as individual

units. Provision of such a facility is likely to depend on the private sector seeing the commercial opportunity

or public support for private sector led provision.

Most business incubators are developed in existing buildings, so that the cost of space to new and small

businesses can be kept low. The focus of the strategy should therefore be on seeking to identify an existing

building or buildings on or close to the site suitable for conversion. Such a strategy would allow incubation

space to be provided cost effectively and at an early stage of development. In this way the provision of

incubation space would not need to wait upon the start of development at the District Centre nor the

completion of new office floorspace.

In particular it may be worth examining the potential for conversion of one of the existing industrial units at

Dean Farm to provide appropriate space; or whether it would be possible to create temporary incubation

space. In a number of locations, shipping containers have been converted to small offices and workspaces for

start-up businesses. The advantage of using shipping containers as workspace is that they can easily be

relocated. On a large site such as Welborne, which will be developed in phases this could be a considerable

advantage. The use of such temporary workspace is also scalable; if there is demand for additional units they

can be easily increased provided the land is available.

Equally important however will be the provision of other business space in small unit sizes. Wessex Economics

has recently undertaken work for Winchester City Council and Hampshire County on the business space

requirement of micro-businesses. Those who essentially have technology based business can work from home

without difficulty providing they do not require particularly high capacity broadband. Wessex Economics are

not aware of any particular aspects of housing design that should be incorporated into design principles for

housing to facilitate home working.

The real challenges face micro-businesses who make or need to store things. Such businesses typically need

cheap space, ideally close to where they live. New developments rarely provide this sort of space, and

enforcement action would often be taken by anyone who started to use garages in a new residential

development for business use. In part because of this, and because of the cost of new homes compared to

older homes, Welborne might not be an attractive place for such micro-businesses.

4 It is important to bear in mind that broadband may be displaced by some other technology by 2041; remember we have only really had widespread

adoption of broadband technologies across society in the last decade.


To address this issue a number of actions can be taken:

As discussed above consideration should be given to how existing space within the SDA at Dean Farm

and Charity Farm can be used to accommodate small businesses

The Employment Strategy should extend its consideration of workspace for small businesses outside of

the SDA to nearby settlements such as Crockerhill, Funtley and Knowle, and seek to avoid loss of small

business workspace, particularly cheaper premises

Address how small and flexible workspace can be incorporated into the designs of the local centres in

Welborne as well as in the District Centre.

Wessex Economics has not undertaken a detailed assessment of demand for small business workspace at

Welborne, and at this stage any estimate of requirements would be speculative. However the requirement is

likely to be of the order of 500-750 sq m (5,500 to 8,000 sq ft). To help translate this into more readily

understood terms this would represent around a third of the space at the Winchester Basepoint business

centre, while has 66 units over four floors with units ranging in size form 12 sq m (120 sq ft) to 47 sq m (c500

sq ft). Winchester City has a population of around 37,000 people and is a major business centre. Welborne is

anticipated to have a population of between 14,000-17,000 people, so it is less than half the size of

Winchester, and will be a subsidiary centre of employment to Fareham.


8. Recommendations

Principles

FBC should retain its objective of encouraging self-containment, while not seeking to rigidly adhere to a 1 to 1

relationship of jobs and homes. This is a simple recognition that FBC has no control over where residents

choose to work, nor the pace of development of business floorspace. Greater weight should be given to

ensuring that jobs are delivered as far as possible at the same time as the growth of the resident workforce.

In the pursuit of self-containment FBC has implications for a number of policies and can take a series of

actions, as follows:

Wessex Economics would support FBC’s objective of ensuring a provision of both jobs and homes in

Welborne as part of the strategy to ensure the maximum possible level of self-containment, while

recognising FBC cannot dictate where the residents of Welborne work

It is important for FBC to seek the fullest provision of local services appropriate to a community of some

14-17,000 people, and that creative ways should be looked at of how services can be provided to new

residents in the early phases of development eg temporary shops

Wessex Economics would endorse the objective seeking to make a Welborne a great place for micro

and small businesses, including those who will work from home. Actions need to involve providing

appropriate workspaces (not just serviced offices), support, and communications infrastructure.

Action should also be taken to link local residents to job opportunities with employers ensuring job

opportunities are advertised locally, and by seeking to support those who live locally with local job

search and training where required

Issues of deliverability should be given significant weight in decision making. In Wessex Economics view it is

more important for a development that will span 25 years from 2016 to be guided by key principles rather

than strict adherence to precise quantitative targets.

This principles based approach to planning reflects the fact that it is not realistic to forecast business space

requirements up to 25 years into the future; nor to anticipate fully how people will chose to live their lives in

2040, and what impact technology and social trends will have had on working practices or lifestyles.

We turn now to present our recommendations relating to the key questions posed at the start of this report.

The Quantum of Land for Employment Purposes and Floorspace Targets

Wessex Economics regard the 20 ha of land allocated for employment used in the draft Welborne Plan as

appropriate.

There is no evidence of a pressing requirement for the allocation of additional employment land in

South Hampshire. There is a more than adequate forward supply of employment land and sites,

including sites along the M27 which can be regarded as performing a similar role as Welborne. This view


was supported by PUSH, the Solent LEP and adjoining local authorities at a workshop held on 19th June

2013.

An increase in the allocation of land for employment purposes would eat into the land available for

residential development. South Hampshire needs new homes to meet the needs of both a growing

population and to support its economy.

A reduction in the allocation of land allocated for employment purposes would make it harder to

achieve the broad objective of maximising the potential for self-containment; it would also adversely

affect the viability and sustainability of the District Centre.

The overall area of land allocated for employment uses should be large enough to achieve critical mass

to attract a range of occupiers and to offer scope to attract different size of businesses, including some

larger occupiers.

The 20 ha of land makes the fullest possible contribution to the overall development value of the entire

scheme and hence contributes positively to delivery of the scheme. All other possible uses of the 20 ha

identified would deliver lower value than its development for employment purposes.

Given that the employment land identified will only become commercially attractive once works are

completed at Junction 10 on the M27, provision at Welborne will not compete with alternative sites

until after that date.

Development at Welborne will make some contribution to meeting the employment land requirements

of Fareham Borough in the current plan period to 2026, but this contribution is likely to be quite

modest.

The overall allocation of employment land at Welborne is much more significant in terms of ensuring

long term continuity of a supply of well serviced employment land over the longer term (post 2026).

Given how long it takes to make employment sites, development ready, Welborne is a valuable

contribution to the supply pipeline.

The Proposed Mix of Uses

The current allocation of employment land in the draft Welborne Plan is estimated to have capacity to deliver

between 39,000-44,000 sq m of office space and 35,000-40,000 B2/B8 space.

Wessex Economics believe it is important not only to differentiate offices from B2/B8 space, but it is important

to differentiate B8 warehousing from the emerging class of flexible modern production space that on current

categorisation might be classed as B1c or B2 space.

Wessex Economics have developed the indicative split in terms of floorspace provision as shown in Figure 6.

This allocates land as follows:

3 ha for office accommodation. It is assumed that this is built in 2 and 3 storey blocks, with site

coverage at 40% (so the floor area of buildings on a 1 ha plot (10,000 sq m) covers 4,000 sq ft.

10 ha for B8 warehousing. It is assumed that this is developed entirely a single storey, though the

development might be of a high bay warehouse, on the basis of a 40% plot ratio.


7 ha of B1c or B2 space. It is assumed that around quarter of the premises built have a mezzanine floor,

so buildings are developed on the basis of 1 or 2 floors. A plot ratio of 40% is assumed.

Figure 6: Land Allocation, Floorspace and Jobs by Use Class

Note: Employment densities (sq m per job) for offices are applied to Net Internal Area in accordance with HCA

Employment Densities Guidance and an assumed Net to Gross ratio of 80%; a Net to Gross Ratio of 95% is

applied to B1c and B2; employment densities for B8 Warehouse use are reported for Gross External Area.

On the basis of these assumptions the capacity of the land allocated for employment uses at Welborne is for

up to 105,000 sq m of employment floorspace (Gross External Area), broken down as follows:

30,000 sq m of office (B1a) floorspace

40,000 sq m of B8 warehousing space

35,000 sq m of B1c and B2 light industrial floorspace

This level of floorspace capacity is greater than presented in the previous draft Welborne Plan, but this is a

gross figure. It is estimated that some 13,860 sq m will be lost, mostly at Dean Farm. The net increase in

employment floorspace capacity is therefore 91,140sq m.

It is anticipated that it will take the full life time of the Welborne Plan to 2041 and longer, to deliver this scale

of development. If development does not get underway until 2022 – a possible target date for opening of an

all moves Junction 10, to develop 100,000 sq m by 2041 would mean completion of around 5,500 sq m of

employment floorspace pa. To put this in context an average of 34,500 sq m pa of employment floorspace

was completed in the 12 years to March 2013 in the PUSH area as a whole

The draft Welborne Plan contained proposals for 39,000-44,000 sq m of office floorspace, so the revised

proposals anticipate a reduced level of office floorspace; but plan for enhanced provision of industrial and

warehouse space (B1c, B2 and B8) – 75,000 sq m compared to the 35,000-40,000 sq m identified in the draft

Welborne Plan.

To some extent the change in the balance of planned provision reflects the current position that there is likely

to be limited demand for office space at Welborne for some time to come, given the overhang of existing

newly built accommodation, and the availability of sites with permission in similar locations to Welborne. But

it also reflects policy that gives priority to office development in South Hampshire’s two cities, and the

growing appeal of city centre locations to office occupiers.


In contrast there is evidence of emerging demand for warehouse space in the sub-region, and an absence of

new supply over the last decade. It is anticipated that Welborne will be able to capitalise on this demand in

the next 10 years. But the increase in planned provision of warehouse space also reflects the importance of

logistics to warehouse and industrial enterprises. This ties them to motorway locations; Welborne has a

relative advantage to other sites in being able to accommodate such uses in an attractive environment.

Consideration will need to be given, however, to the environmental impact of large scale warehousing

activities on adjacent residential development and on the overall perception of Welborne as a place to live. It

is important to the delivery of the entire Welborne Plan that employment developments do not dilute the

value of residential development. The design, scale and location of all employment buildings is therefore an

important consideration, and needs to be meshed with the planned routes of access and egress from the

employment zones that are located at Welborne.

It is in the landowners’ interests that the potential conflicts between different land uses are well managed.

Wessex Economics would therefore recommend that FBC work with the landowners and promoters of the

development to agree a number of principles regarding zoning, traffic flows, the design of buildings,

assessment of noise, and smells; and the overall management of the employment areas within Welborne.

Some of these principles will be capable of being incorporated into the planning framework. But others will

depend on the enlightened self-interest of the owners of land and landlords of property to enforce. Joint

working between FBC and the owners and managers of the employment land is likely to produce the best

results.

The planned provision of 35,000 sq m of B1c and B2 floorspace recognises that while manufacturing

employment continues to decline, the value of manufacturing output in Hampshire and the Isle of Wight is

forecast by Oxford Economics to grow by 25% between 2013 and 2025. Industrial property agents also

perceive there to be opportunities for growth in UK manufacturing and related activity associated with on-

shoring and 3D printing technologies5. These trends, combined with significant requirements for re-provision

of redundant industrial premises, inform the indicative allocation of land for B1c and B2 floorspace, which the

majority expected to be B1c floorspace or hybrid B1, B1c and B2 space.

Given the quantum of land and the lengthy anticipated timescale for development of employment land at

Welborne, there will need to be flexibility in how land is used. The following recommendations are made for

regular review and protecting the overall ambition to have a mix of different employment uses at Welborne.

Securing the anticipated level of office development is critical to the overall levels of employment

achieved at Welborne. Therefore there should be a deliberate policy to retain the 3 ha of land close to

the District Centre for office uses. Design coding relating to the quality and height of buildings, the

quality of landscaping etc can potentially be used to ensure that the type of development that comes

forward close to the District Centre reinforces the function and viability of the District Centre. Wessex

5 The Evolution of Manufacturing, Jones Lang LaSalle, June 2013


Economics believe that this approach will find favour with landowners, provided ownership remains in

the hands of those who can take a strategic perspective on the development of Welborne.

In a similar way, FBC should seek to ensure that the land that is allocated for employment uses is

promoted in such a way that complimentary uses can be located close to each other; and that

developments that would detract from the overall development of a particular zone are prevented. It

should be in the interest of landowners and developers to zone available land in this way, and this will

be helped if land is managed by the landowners and promoters on a strategic basis rather than disposed

of in smaller parcels to different developers. Managing competing and complimentary land uses is

important for value creation and retention.

The proposals for Welborne will contribute to the long term strategy for South Hampshire. Specifically in

terms of the policy objectives of PUSH and the Solent LEP, the revised proposed quantum and mix of

floorspace planned at Welborne:

Provides for the long term requirements for business floorspace in a manner where it is possible to plan

in a responsive way to market demand, because of the ability of the site and location to accommodate

warehouse, industrial, R&D and office accommodation.

By reducing the level of anticipated office floorspace, this revised strategy acknowledges the ‘cities first’

policy of PUSH and the Solent LEP, and acknowledges the extensive planned provision at other sites

(notably at Junction 9 and 12) for further provision of office floorspace.

Responds to emerging market demand for warehousing space, and provides a locational alternative in

the centre of the M27 corridor to other potential locations for such activity. Transport and logistics are

one of the priority sectors identified by the LEP and by PUSH.

The planned provision for B1c (and B2) space also provides locational choice for advanced

manufacturing and environmental technology businesses, as well as a host of smaller enterprises

requiring clean attractive production space. In this Welborne complements the Solent Enterprise Zone.

The Employment Potential of the Proposed Allocations

The current draft Welborne Plan envisages that around 6,900 to 7,300 jobs, on the basis of delivery of 79,000

sq m of office and industrial floorspace, employment in non-B class activities, and an estimated number of

people working from home in 2050. Figure 7 shows the breakdown of these estimates.

Wessex Economics estimates that based on the increased floorspace provision, the changed mix in the type of

development, and a reduced estimate of the number of people working from home, that around 5,735 could

be working in Welborne once all the employment space is developed.


Figure 7: Employment at Welborne: Draft Welborne Plan and Wessex Economics Estimates

It is important to emphasise that these estimates are based on all the planned floorspace being built and

occupied; and it make take at least until 2041 (the current planned date for completion of all the homes) to

deliver the full quantum of floorspace. The actual number of jobs also depends on the mix of development

and the efficiency with which businesses occupy the floorspace.

There is therefore inevitably uncertainty about the number and type of jobs that will be created at Welborne,

since this is a function of the pace of development; the type of employment floorspace development; the

nature of development of non-B class uses, particularly in the District Centre.

As Figure 7 shows the quantum of jobs is particularly dependent on delivering the quantum of office

floorspace proposed, since these account for a large number of jobs. Retaining land zoned for offices is

particularly important to the achievement of the employment objectives of the Plan. However, there should

be no pressure on this land for many years, given the extent of land identified for other employment uses.

Flexibility in Delivering the Welborne Plan

While the development plan process requires the preparation of forecasts of planned floorspace by use class,

it is likely that over future years’ business space will become increasingly hard to allocate solely to a single use

class. This would indicate the need for flexibility and zoning of different uses.

We recommend that in planning for employment development it is desirable to retain flexibility over the

distribution and the split of floorspace between different use classes, while recognising that the aim should be

to secure a broad balance between office, warehouse and industrial uses.

If it were to prove that there is stronger demand in the early years of the scheme for B8, B1c and B2 uses than

for offices, it will be important to ensure land identified for office development is not lost to other B uses,

since B1a uses are associated with many more jobs per 100 sq m of developed space.


However in the indicative allocation of the 20 ha of land identified for employment uses, Wessex Economics

has allocated 85% of the land to non B1a uses, so there should be no pressure on the land most appropriate

for B1a use for many years, by which time demand for office space is likely to have emerged.

FBC may wish to be more specific in the Welborne Plan to indicate that it wishes to promote Welborne for a

variety of business uses in addition to offices, particularly R&D uses (B1b), and light industry appropriate close

to homes (B1c). It would be appropriate to identify those sites where such activities will be encouraged.

While the indicative division of floorspace identifies land for warehousing use, it is important that proposals

for large format warehousing are assessed fully in terms of the implications for the overall development. This

is important because there is a perceived market requirement in the near future for such warehousing.

Wessex Economics believes that proposals for large format warehousing should be assessed, if they

materialise, on their merits. Such development might enhance viability or help fund key elements of

infrastructure and thus help delivery of the overall plan.

However, Welborne may not be the best location in South Hampshire for such facilities, and might detract

from the character and appeal of the emerging residential community. Provision of large scale warehousing

might have adverse effects on traffic flows that make delivery of the overall scheme harder.

Similar considerations apply with applications for B2 development. The revised Plan should seek to set out

criteria that would be applied to determine if B2 and B8 uses are compatible with the overall objectives for

Welborne as a new community.

These criteria would include contribution to job creation, traffic and environmental impacts, and contribution

to funding infrastructure and overall scheme delivery. It is envisaged that a Design Code will be developed and

compliance with the Design Code will be an important factor in determining planning applications.

It has become commonplace for many D class uses, plus hotels, and Sui Generis uses to be developed on land

allocated to B class uses. Often these provide significant numbers of jobs. Wessex Economics would regard

many such uses as appropriate to Welborne on land allocated to employment uses.

In particular, Wessex Economics, would anticipate that uses such as a hotel, a gym, training centre, some

forms of medical or alternative therapy centres etc could complement the District Centre.

However, there are other uses that might simply attract people to Welborne, with limited benefit to the new

community. Particular caution should be exercised over development of activities that have a significant retail

element to their activities, since these could generate significant traffic flows.

Wessex Economics would recommend that the Welborne Plan set out criteria which will be used to inform

decisions about what non-B class uses might be permitted on land identified in the Plan for employment uses.


Criteria would include the contribution to the objectives of Welborne, including job creation, level of use by

local residents, traffic generation, compatibility with other adjacent uses etc.

The Siting of the Employment Land Allocations

Wessex Economics endorses the revised Masterplan (August 2013) which locates the majority of employment

land to the west of the A32 in a block to the north of the M27, with a smaller site to the east of the A32 to the

north of Pook Lane. This makes the best use of land that could not be used for residential development, and

provides some degree of noise attenuation for homes to be developed further into the site.

Development of land along the north side of the motorway also serves the purpose that developers and some

business occupiers value the fact that their premises can be seen from a motorway or trunk road.

There should be a zoning plan for employment land to indicate what type of buildings and business functions

are deemed appropriate to different parts of the site. Wessex Economics are of the view that the Use Classes

are too blunt an instrument on which to base this zoning plan, and would point to how, over time, it is

increasingly hard to categorise business operations and premises by reference to the use classes.

The sort of criteria which would be included in the zoning plan would be:

Visual impact and character of the building proposed

Traffic generation, particularly the mix of cars, light commercial vehicles, and HGVs

Employment density; that is, numbers of jobs per 1,000 sq m

Complementarity to District Centre functions

Compatibility with existing development and planned use of adjacent sites

Requirements for storage, parking and vehicle movements

Waste generation

The expectation will be that land closest to the District Centre and on the A32 frontages should be reserved

for office development, for a number of reasons:

To ensure that the impression gained as people travel along the A32 of a quality place and to deliver a

sense of arrival as people come towards the District Centre

To ensure that the District Centre benefits from the spend of large numbers of employees working

within 5-10 minutes’ walk of the Centre

Office uses are more sensitive to noise intrusion, though occupiers frequently want visible locations.

The location to the south the District Centre ensures visibility but distance from the motorway.

B2 and B8 users are less noise sensitive, and their buildings tend to be more functional. They are best

located closer to the M27, where they can act as a visual and noise screen.

Non B class development on employment land should be located in accordance with the criteria set out

above, which means that some might be located close to the District Centre, others in more industrial

areas.

A hotel would be appropriately located close to the District Centre, in a prominent location.


The August 2013 Masterplan identifies a smaller employment land designation to the east of the A32 to the

north of Pook Lane. The likelihood is that the site is best suited to B1c, B2 or B8 uses, but any use needs to be

compatible to adjacent uses; the possibility of B1a proposals coming forward should not be precluded, and

would be acceptable.

Issues Associated with the Delivery and Phasing of Employment Floorspace

Wessex Economics would make the case that every effort should be made to ensure that jobs and homes are

delivered in tandem, and that, if possible jobs are delivered in advance of homes. This will maximise the scope

for self-containment.

However, this report has identified that little development of employment floorspace is likely to be possible

until work to make Junction 10 an all moves junction is complete. This indicates the importance of completing

these works at the earliest possible date.

Given that the Junction 10 improvements are not likely to be delivered until after 2020, it is recommended

that FBC extend the scope of the employment strategy to consider the future role of existing workspaces at

Dean Farm and Charity Farm, and in the immediate area surrounding Welborne before 2020.

Proposals made by the BST Group for an alternative junction improvement scheme to that currently proposed

merit serious consideration to determine if they provide a way of bringing forward the junction improvement

and hence the delivery of job creating development of the designated employment land at Welborne.

Any benefit in terms of bringing forward jobs associated with such a scheme, would need to be weighed

against the impact on achieving the wider objectives set for Welborne, including the impact on the overall job

targets and the future marketability of employment land and new homes.

In assessing such proposals consideration would need to be given to the PUSH and Solent LEP’s ‘Cities First’

policies, the objectives set for the Solent Enterprise Zone, and the degree to which the proposed requirements

could be met at other locations in the South Hampshire area.

The experience of the BST Group as a developer and investor in business space is a significant asset in terms of

the delivery of the draft Welborne Plan. The BST Group’s desire to promote employment development on its

own land is to be welcomed and is one reason for increasing the area of land devoted to employment uses

west of the A32 and reducing that located to the east of the A32.

The strategy for seeking to make Welborne a great place for micro-businesses and to facilitate working from

home is endorsed. However, it is recommended that policies be put in place to protect and foster provision of

small workspaces in the villages surrounding Welborne.


In particular it is often not easy within new developments to provide small, cheap workspace for making things

or storage. Often rural areas provide a valuable source of space for businesses, but such space is often at risk

of being lost to residential use.

It will take many years for the employment sites identified in the Welborne Plan to be built out. It will be

important therefore to have a clear phasing plan to prevent pepper potting; and linked to this a strategy for

managing sites not scheduled for immediate development.

Page | 1

The Welborne Employment Strategy Appendix 1 The Commercial Property Market

Submitted to Fareham Borough Council July 2013 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 M: 07881 348 244 E: [email protected]



Welborne Employment Strategy 2013

Page | 2

1. Introduction

About this Appendix

This working paper provides a review of the market for office, industrial and warehouse space in the Core

PUSH area (being the area covered by the 6 local authorities, Southampton, Eastleigh, Fareham, Gosport,

Havant and Portsmouth). It examines important characteristics of the commercial property market such as

the stock of property by use class, type and location, rentals and yields, stock of vacant property, patterns

of occupier demand (take up) and recent and historic development trends.

The Study Area

The area for which data has been analysed covers Eastleigh, Fareham, Gosport, Havant, Portsmouth and

Southampton, the Core PUSH authorities. A geographical illustration of the study area is shown in Figure 1.

Figure 1: Study Area

Source: Google maps

Data Sources

The analysis presented below draws upon relevant datasets including:

the Commercial and Industrial Rateable Value Floorspace Statistics

Costar data

Showcase

Employment Land Reviews


Page | 3

Industrial and Commercial employment land monitoring data held by Hampshire County Council.

Wessex Economics also acknowledges the valuable contribution made by local agents, who have

contributed insights to the operation of the market.


Page | 4

2. The Office Market

Overview The office market in the Core PUSH authorities has continued to show steady signs of improvement since

its emergence from a low point in 2008. Take up of office space reached a high in 2011, although falling

back slightly in 2012. The last three years have recorded take up levels that are above the long term trend.

Office demand in the Core PUSH authorities has focused on the two cities, Southampton and Portsmouth.

Together the two cities account for 60% of office stock and over 70% of vacant office space.

Southampton is regarded as the regional centre for office occupiers, with significant representation of

banking and insurance regional offices. These choose to locate in Southampton rather than Portsmouth.

There is a large amount of vacant space in both cities, with vacancy rates of 13% and 10% in Southampton

and Portsmouth respectively. Whilst vacant office space in Southampton tends to be of a higher standard

(70% of vacant office space is of 3 or 4 star (based on data available)), space in Portsmouth reflects an older

and poorer quality of stock. Around 70% of vacant office space in the Core PUSH authorities has been on

the market for over two years compared to 80% in Portsmouth.

Some 107, 800 sq m of office space is vacant in the Core PUSH area which represents 8.5% of the stock of

2008 office space (c.f. 4.5% for industrial and warehouse vacant space). In addition a significant amount of

the office stock may be under-occupied.

The stock of office floorspace in the Core PUSH authorities fell over the period 2003-2008. New office space

(B1a) developed since 2008 amounts to 46,100 sq m, an average of 9,220 sq m pa; this compares with

15,074 sq m pa in the period 2000 to 2007. B use class employment floorspace developed since 2008 has

largely been B1, almost certainly most of this being B1a office space.

A tenant friendly office market for rentals has been evident due to the overhang of office space in the Core

PUSH area over the duration of the downturn and slow recovery. As the market starts to pick up a

rebalancing effect between demand and supply has begun with tenancies terms swinging back to favour

landlords.

Fareham’s office market has fared relatively well, in recent years with decent office stock outside the town

centre. Fareham is considered to be an attractive location with good access to the motorway and within

striking distance of both Portsmouth and Southampton. However there is a significant overhang of newly

built office space at Solent Business Park where 22-23% of built space is available on the market.


Page | 5

Stock of Office Floorspace The Core PUSH area has approximately 1.3 million sq m of office floorspace according to the most recent

(2008) data. The overall stock of office floorspace fell by 13% (-188,000 sq m) over the five years to 2008

(2003-2008). The decline in the stock of office accommodation was concentrated in 2004 and 2005, whilst

in most of the remaining years’ there was a very slight growth in the stock of offices. The fall in stock during

the year 2004-2005 is noticeable across each of the six Core PUSH authorities.

The decline in the stock of office accommodation over the five year period to 2008 has primarily been

driven by losses in office floorspace in Portsmouth (-67,000 sq m), Southampton (-60,000 sq m) and

Eastleigh (-30,000 sq m) (see Figure 3) with almost 70% of the fall in the stock office accommodation being

accounted for by Portsmouth and Southampton. Over the five year period the stock of office floorspace fell

in all Core PUSH authorities.

Southampton had the largest stock of office floorspace in 2008, at 495, 000 sq m, despite recording the

most substantial absolute fall in stock over the five year period. Portsmouth has the next largest stock of

office accommodation, again experiencing the second largest absolute fall in office stock. Together, the

two cities account for 60% of office stock in the Core PUSH area.

By 2008 Fareham and Eastleigh had a similar level of office stock, as Eastleigh’s stock plummeted by 30,000

sq m. In relative terms, the stock of office floorspace fell most significantly in Gosport. Gosport has the

smallest stock of offices of all of the Core PUSH areas, followed by Havant and then Fareham and Eastleigh.

Figure 2: Stock of Office Floorspace, 2003-2008 (000s sq m)

2003

2004

2005 2006 2007 2008

Core PUSH - TOTAL 1,451 1,456 1,237 1,247 1,246 1,263

Eastleigh 198 199 168 175 170 168

Fareham 180 184 163 166 166 167

Gosport 43 46 28 31 30 31

Havant 111 111 81 82 102 105

Portsmouth 364 356 308 312 300 297

Southampton 555 560 489 481 478 495 Source: Commercial and Industrial Rateable Value Floorspace Statistics

The majority of office space in the Core PUSH area is located in Southampton, Portsmouth. Eastleigh is

perceived more as an industrial location but has the third highest proportion of office floorspace. Fareham

has almost as large a stock of office accommodation as Eastleigh.


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Figure 3: Stock of Office Floorspace –Core PUSH area- % and Absolute Change

Source: Commercial and Industrial Rateable Value Floorspace Statistics

According to 2013 Costar data, there are 948 existing office properties in the Core PUSH area with a net

internal area of 1.1 million sq m. Figure 4 shows the distribution of offices across the Core PUSH area.

Figure 4: Location of Offices in the Core PUSH area

Source: Costar, 13th June 2013


Page | 7

Stock of Vacant Property Just over 107,000 sq m of office space is vacant in the Core PUSH area (as of mid-June 2013), representing

around 8.5% of the 2008 stock of office space. Over half of vacant office space in the Core PUSH area is

located in Southampton, with a further 20% in Portsmouth (see Figure 5). Vacancy rates in the two cities at

are around 13% and 10% respectively higher than elsewhere in the PUSH area.

Figure 5: Total Vacant Office Floorspace, sq m (June 2013)

Southampton Portsmouth Eastleigh Fareham Havant Gosport Core PUSH -

Total

Vacant 54,758 21,243 10,608 9,609 9,272 1,767 107,257

Vacant rate (%) 12.9 9.6 6.0 7.8 7.9 7.1 10.0

Vacant available 49,483 20,513 12,636 9,463 6,262 2,005 100,360

Vacant available rate (%) 11.8 9.3 7.0 7.7 5.4 8.1 9.0 Source: Costar, 13th June 2013

Vacancy rates are the second lowest in Eastleigh where demand for office space is reportedly low given the

close proximity to Southampton city centre (where substantial vacant office space exists) and availability of

office space in business parks along the M27 corridor. No oversupply of office space is evident in Eastleigh.

Gosport has the smallest stock of offices and the smallest amount of vacant available office space.

Although a fairly large amount of surplus vacant office supply in the Borough of Havant exists this is

dominated by a few large office buildings which are perceived to be unlikely to meet the future

requirements of local occupiers.

Vacancy rates in 2013 as illustrated in Figure 6 are similar to those recorded in 2009.

Figure 6: Vacancy Rates 2009 to June 2013



Page | 8

Qualitative evidence suggests that vacant office accommodation is in reality even higher than the data

presented above, because of extensive under-occupancy.

Costar properties are assigned a star ranking as an indication of quality (1 star, 2 star etc). Where data is

available, the data suggests that approximately half of vacant office space in the Core PUSH area is 3 star

and taking into account 2 star office accommodation, brings the percentage up to 93%. Thus relatively little

good quality stock is vacant (only 7% of vacant stock is 4 star (based on properties that are assigned a star

ranking)).

Broken down by Core PUSH authority, Fareham has the highest proportion of vacant space that is 3 or 4

star at 80% compared to Gosport with 78% and Southampton at 70%. Eastleigh and Havant have around

50% and 47% respectively of vacant space that is 3 or 4 star. In contrast, a great majority of vacant space in

Portsmouth is 1 or 2 star, with only 7% 3 or 4 star. This reflects the older and poor quality of stock in

Portsmouth overall.

Vacant office space in Portsmouth has been on the market considerably longer than in any of the other five

Core PUSH authorities. Around 84% (approximately) of vacant office space in Portsmouth has been on the

market for over two years compared with 68% in the Core PUSH area as a whole. The proportion of vacant

office space on the market for more than two years in each Borough is as follows: Fareham (70%), Gosport

(67%), Southampton (68%) and Eastleigh (65%). Havant has the lowest percentage of vacant office that has

been on the market for longer than 2 years.

One agent highlighted the availability of competitive lease terms in the Core PUSH area given the

substantial amount of vacant office space on offer throughout the southern corridor. For example a

reasonable deal agreed for a 10 year lease involved a 2 to 3 year rent free period, a reflection of the sheer

volume of vacant floorspace. A slight rebalancing of demand and supply however is reported by one agent

with the landlords being able to secure better deals.

Vacancy rates in 2014 and 2015 as forecast by Costar are projected to follow a downward trend as

illustrated in Figure 7, reaching around 8% by mid to late 2015.


Page | 9

Figure 7: Office Vacancy Rates – Forecasts, Core PUSH area


Take up of Office Space

Since the beginning of 2009 some 572,000 sq m of office space has been let in the Core PUSH area as

shown in Figure 8, representing an annual average office take up of 95,000 sq m pa.

Figure 8: Office Lettings (Take-Up) 2009- QTD (June) 2013

No. deals Sq m

Average deal size in sq m

Average annual take up

Eastleigh 52 80,668 1,551 13,445

Fareham 40 45,796 1,145 7,633

Gosport 14 5,290 378 882

Havant 35 92,195 2,634 15,366

Portsmouth 31 151,006 4,871 25,168

Southampton 79 196,623 2,489 32,771

Core PUSH - Total 251 571,578 13,068 95,263 Source: Costar, 13th June 2013

The quantum of take up has been greatest in Southampton, Portsmouth and Havant, with larger sized deals

being completed in Portsmouth.

Figure 9 illustrates lettings take up over the period 2009 to the second quarter of 2013 in the Core PUSH

area as whole, Take up improved significantly in 2011, tailing off in 2012, yet still recording stronger

performance than in 2008 or 2009.


Page | 10

Figure 9: Office Lettings (Take-Up) 2009- QTD (June) 2013, Core PUSH area


Office take up has been highest in Southampton at over 196,000 sq m accounting for 34% of all take up in

the Core PUSH area. The majority of take up in Southampton occurred in 2010, 2011 and 2012. The second

largest take up in the Core PUSH area between 2009 and June 2013 is in Portsmouth. In contrast, however,

76% of take up in the city occurred in 2011, with little to take up in other years.

Havant is next in importance of take-up, accounting for 16% of the Core PUSH area take up of office space.

Similar to Portsmouth, the majority of take-up occurred in 2011. A more even distribution of take up is

evident in Fareham.

Over the last year (July 2012 to 2013), around 30% of take up has been for office floorspace of size 201 to

750 sq m; the majority (70%) of lettings in the Core PUSH authorities have been for deals up to 200 sq m (se

Figure 10). The biggest deal in the year period was completed in Southampton at around 2,200 sq m

involving Selex ES, Second Avenue.


Page | 11

Figure 10: Office Lettings (Take-Up) July 2012-2013, Core Push area

Source: Costar, 8th July 2013

In the Core PUSH area, take up was fairly slow in 2009 and 2010, with an upturn in 2011 with reasonable

levels of take up in 2012 as well. Take up in 2011 was driven by Portsmouth, and Havant and Southampton

to a lesser extent, whilst take up in 2012 was predominately led by Southampton and Eastleigh. Take up in

2013 up to June this year equates to almost 21,000 sq m.

Figure 11: Office (Letting) Take-Up 2009- QTD (June) 2013

Eastleigh Fareham Gosport

No. deals Sq m No. deals Sq m No. deals Sq m

2009 1 764 8 3,296 10 3,895

2010 5 11,499 10 11,015 4 1,395

2011 18 24,991 6 14,792 0 -

2012 25 39,997 14 13,241 0 -

2013 Q1 2 2,881 2 3,452 0 -

QTD 1 536 0 - 0 -

TOTAL 52 80,668 40 45,796 14 5,290 Source: Costar, 13th June 2013


Page | 12

Havant Portsmouth Southampton Core PUSH area

No.

deals Sq m No.

deals Sq m No.

deals Sq m No.

deals Sq m

2009 10 13,512 7 12,710 7 22,771 43 56,948

2010 4 1,626 5 10,276 19 40,308 47 76,119

2011 9 64,029 11 115,277 21 49,221 65 268,310

2012 12 13,028 5 10,059 26 73,091 82 149,416

2013 Q1 0 - 3 2,684 4 4,400 11 13,417

QTD 0 - 0 - 2 6,832 3 7,368

Total 35 92,195 31 151,006 79 196,623 251 571,578 Source: Costar, 13th June 2013

Most transactions in the Core PUSH authorities are relatively small scale, a common feature of regional

markets, where it is unlikely to see office transactions much over 20,000-30,000 sq ft (1,860-2,800 sq m).

This trend is likely to continue. One agent did note that there were very occasional requirements for

50,000-60,000 sq ft (4,645-5,575 sq m) office space in the regional market. Key sectors requiring office

floorspace in the Core PUSH authorities include professional and business services. This pattern of demand

is likely to continue in the future.

Sales of Offices

There have been 146 office sales transactions in the Core PUSH authorities from Q3 in 2003 to Q2 in 2013

with the most lucrative sale in 2006 at around £65 million. There was a sale in 2010 at just under £30

million as illustrated in Figures 12 and 13.

Figure 12: Office Sale Transactions Q3 2003 to Q2 2013



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Figure 13: Office Sale Volumes Q3 2003 to Q2 2013


Rentals In the Core PUSH area rents have fallen from just below £14.50 per sq ft in 2009 to under £12.50 per sq ft

in quarter 1 of 2013 (see Figure 14). Figure 15 shows that rents have increased in Eastleigh, Havant and

Portsmouth in 2013 but have fallen in Fareham, Gosport and Southampton.

Figure 14: Offices – Average Rental Rates, Core PUSH area, 2009-Q1 2013


Discussions with one agent suggests that headline rents have not changed much over the 2008 to 2013

period. However, effective rents have been compressed as landlords have made increasing use of incentive

packages including free rent periods, capital fit out etc over the downturn period. In 2008-09 on a 10 year

lease an occupier may have got 3.5-4 years rent free. At best rents were said to be £16-17 in Portsmouth,

£17-18 at Fareham Business Park but over £20 in Southampton.


Page | 14

Figure 15: Office Rental Rates 2009- June 2013

Average Office Rental Rate (Approx)

2009 Q1 Peak rental rate during 2009-

2013 Q1 2013 Q1

Eastleigh £12.40 £14.80 £14.50

Fareham £12.80 £13.20 £12.65

Gosport £18.00 £21.00 £9.80

Havant £8.00 £9.50 £9.00

Portsmouth £10.00 £14.80 £13.00

Southampton £17.50 £17.50 £12.00 Source: Costar, 13th June 2013


Page | 15

3. The Industrial and Warehouse Market

Overview

Development activity in the industrial and warehouse sector has recommenced with new development

schemes coming forward in both Southampton and Havant this year. Lease terms are improving for

landlords and incentive packages are becoming less generous as the market picks up. However compared

to the office market, the market for industrial and warehousing space has been stronger over the past few

years.

Consultees report the emergence of some difficulties meeting potential occupier requirements, particularly

for larger sized units with specific locations such as Portsmouth lacking larger space. Overall, take up in the

industrial and warehouse market has generally moved towards demand for B8 space rather than B2 space.

Stock of Industrial and Warehouse Floorspace The Core PUSH area has approximately 4.1 million sq m of industrial and warehouse floorspace according

to the most recent data (2008) with a 60:40 split between industrial and warehouse space.

The stock of industrial space has fallen by almost 10% (-263,000 sq m) over the five year period to 2008

with a marked reduction between 2006 and 2007 of -110,000 sq m (-4.3%). A decline was evident across all

of the Core PUSH authorities, the greatest fall being in Havant at -108,000 sq m of industrial stock.

In contrast warehousing floorspace fell by only 2.1% or -35,000 sq m during the 5 years to 208 and four of

the six Core PUSH authorities have increases in warehousing stock; Gosport is an exception with a recorded

loss of almost 200,000 sq m in warehousing space.

Increases in industrial and warehousing stock during the period 2003 to 2008 are evident in Fareham

(+75,000 sq m) and Portsmouth (+11,000 sq m) (see Figure 17).


Page | 16

Figure 16: Stock of Industrial & Warehouse Floorspace, 2003-2008 (000s sq m)

2003 2004 2005 2006 2007 2008

Industrial

Core PUSH area 2,700 2,663 2,625 2,572 2,462 2,437

Eastleigh 546 547 534 528 503 495

Fareham 297 298 297 293 290 287

Gosport 201 202 167 178 173 174

Havant 482 450 448 419 374 374

Portsmouth 559 551 544 521 532 537

Southampton 615 615 655 633 590 570

Warehouse

Core PUSH area 1,703 1,686 1,615 1,651 1,679 1,668

Eastleigh 435 436 399 410 440 448

Fareham 183 223 233 259 261 268

Gosport 329 258 125 127 129 130

Havant 73 92 109 111 118 122

Portsmouth 327 322 350 353 361 360

Southampton 356 355 399 391 370 340

Industrial and Warehouse Core PUSH Total

4,403 4,349 4,240 4,223 4,141 4,105

Source: Commercial and Industrial Rateable Value Floorspace Statistics

Around 67% of industrial and warehousing stock in the Core PUSH area is located in Portsmouth,

Southampton and Eastleigh, with a fairly even split between the three, although very slightly more in

Eastleigh at 23%. Gosport has the smallest proportion of industrial and warehousing stock. Yet, over three

quarters (or -226,000 sq m) of the fall in industrial and warehousing stock in the Core PUSH area between

2003 and 2008 is attributable to Gosport.


Page | 17

Figure 17: Stock of Industrial & Warehousing Floorspace – Six Core PUSH Authorities - % and Absolute

Change

Source: Costar, June 2013

There are around 850 existing warehouses and industrial properties in the Core PUSH area. Figure

18illustrates the location of industrial and warehouses in the area.

Figure 18: Location of Industrial and Warehouse in the Core PUSH area



Page | 18

Stock of Vacant Property There is over 185,000 sq m of industrial and warehouse space vacant (as of mid-June 2013), representing

around 4.5% of the 2008 stock of office space in the Core PUSH area. Over a third of vacant industrial and

warehouse space is located in Eastleigh, a further 24% in Portsmouth and 15% in Fareham (see Figure 19).

Vacancy rates are subsequently higher in Eastleigh, Portsmouth and Gosport and lowest in Southampton.

Figure 19: Total Vacant Industrial and Warehouse Floorspace, sq m, June 2013

Eastleigh Portsmouth Fareham Havant Southampton Gosport Core PUSH

Total

Vacant 59,763 44,344 28,283 20,223 17,244 15,460 185,317

Vacancy Rate 12.6 14.9 9.7 10.3 5.5 13.0 11.0

Vacant available 56,267 43,333 23,945 20,101 17,244 15,544 176,433

Vacant available rate 12.5 15.0 8.1 10.0 6.0 13.0 11.0 Source: Costar, 13th June 2013

Vacancy rates and now back at the same level as the first quarter of 2009 (see Figure 20).

Figure 20: Vacancy Rates 2009 to Q1 2013, Core PUSH area

Source: Costar, June 2013

The Employment Land Review for Eastleigh (January 2012) reports that current demand for industrial space

in Eastleigh has remained reasonably strong with demand for premises at all size levels. While enquiries for

smaller units can usually be met there is a shortage of larger distribution units about 18,000 sq m.

One agent consulted notes reasonable availability of 10,000 sq m units, yet there is very limited choice for

an occupier searching for 50,000-70,000 sq ft in the M27 corridor, with only two or three options available

in the whole region. This lack of supply for some occupiers is perceived to be a constraint on business

growth. Portsmouth is identified as one of the areas that lacks availability of larger industrial and

warehouse floorspace.


Page | 19

Around 70% of the vacant industrial and warehouse space is 3 star and taking into account 2 star office

accommodation, brings the percentage up to 100%. Around 53% of vacant industrial and warehousing

space in the Core PUSH area has been on the market for longer than two years.

On average 71% of vacant space in Gosport has been on the market longer than two years with equivalent

figures for Portsmouth being 68% and 67% in Southampton. Space in Eastleigh and Fareham appears to be

taken up quicker, as only 36% and 32% (respectively) of vacant space has been on the market longer than

two years.

Vacancy rates in 2014 and 2015 are forecast by Costar to follow a downward trend at the start of 2013 to

rise steadily in 2014 and 2015 (see Figure 21), but then trend upwards slowly to 12% by late 2015.

Figure 21: Industrial and Warehouse Vacancy Rates – Forecasts, Core PUSH area



Page | 20

Take Up of Industrial and Warehouse Space

Since the start of 2009, some 1.36 million sq m of industrial and warehouse space has been taken up (see

Figure 22), representing an annual average take up of 227,000 sq m pa in industrial and warehousing space

across the Core PUSH area.

Figure 22: Industrial and Warehousing Lettings (Take-Up) 2009- June 2013

No. deals Sq m Average deal size in sq

m Average annual take

up

Eastleigh 81 526,744 6,503 87,791

Fareham 72 275,096 3,821 45,849

Gosport 18 112,558 6,253 18,760

Havant 25 39,658 1,586 6,610

Portsmouth 73 284,258 3,894 47,376

Southampton 43 124,445 2,894 31,111

Core PUSH - Total 312 1,362,759 4,368 227,127 Source: Costar, June 2013

Take up has been highest in Eastleigh at 527,000 sq m followed by Portsmouth and Fareham.

Over the last year (July 2012 to 2013), around 50% of take up has been for industrial and warehouse

floorspace in the size category 101 to 500 sq m; around 70% of lettings in the study area have been for

deals up to 500 sq m as (see Figure 23); whilst 25% of the quantum let has been of size ranging from 501 to

5,700 sq m.

Figure 23: Industrial and Warehouse Lettings (Take-Up) July 2012-2013, Core Push area

Source: Costar, 8th July 2013


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Broken down by year, lettings (take up) peaked in 2009 and 2011 in the Core PUSH area as shown in Figure

24. Take up in the Core PUSH area was driven by Eastleigh, Portsmouth and Fareham accounting for 39%,

21% and 20% of total take up respectively. In Eastleigh, take up was strongest in 2009, 2011 and 2012 and

Portsmouth 2009 and 2011.

Figure 24: Industrial and Warehouse Lettings (Take-Up) 2009- QTD June 2013

Eastleigh Fareham Gosport

No. deals Sq m No. deals Sq m No. deals Sq m

2009 10 174,272 12 35,910 10 28,872

2010 19 29,746 16 56,448 3 23,452

2011 26 178,753 27 71,168 5 60,234

2012 19 128,689 10 24,898 0 -

2013 Q1 5 12,464 4 20,030 0 -

QTD 2 2,820 3 66,642 0 -

Total 81 526,744 72 275,096 18 112,558 Source: Costar, June 2013

Havant Portsmouth Southampton Core PUSH area

No. deals Sq m No. deals Sq m No. deals Sq m No. deals Sq m

2009 3

7,232 18 98,461 53

344,747

2010 1

1,010 15 43,783 54

154,439

2011 9

15,428 24 94,142 16

61,653 107

481,378

2012 7

9,931 12 37,741 20

29,047 68

230,306

2013 Q1 4

5,107 2 5,172 2

19,036 17

61,809

QTD 1

950 2 4,959 5

14,709 13

90,080

Total 25

39,658 73 284,258 43

124,445 312

1,362,759 Source: Costar, June 2013

Future demand for industrial and warehouse were thought by one agent to be similar to present demand

with requirements of 50,000-100,000 sq ft (4,645-9,290 sq m) for conventional, modern industrial sheds. It

was noted that there was always more demand for parking than is allowed by planning.

A trend towards a greater number of small occupiers with demand for low density uses that provide for a

secure external area for storage as well as parking was highlighted. Schemes that performed well were

those that had a good extensive external yard space as well as quality building and parking.


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Sales of Industrial and Warehouse Space

There have been 316 sales of offices from Q3 in 2003 to Q2 in 2013 with the most lucrative sale in 2006 at

around £17 million. There was a sale in 2008 at just under £11 million as illustrated in Figure 25.

Figure 25: Industrial and Warehouse Sale Transactions Q3 2003 to Q2 2013


Figure 26: Industrial and Warehouse Sale Volumes Q3 2003 to Q2 2013


Rentals In the Core PUSH area, rents have been pretty flat declining from £5.80 per sq ft in 2009, but recovering

almost to the same level (£5.80 per sq ft) in quarter 1 of 2013 (See Figure 27). Rents have risen since 2009

in two of the six Core PUSH authorities, these being Havant and Eastleigh. Rental rates for industrial and

warehousing space has remained fairly static in Gosport. One agent highlighted that a brand new industrial

space would rent for around £7.50 per sq ft in the southern corridor.


Page | 23

One agent reported at the low point in the market a 10 year lease a rent free period of 24 months would

have been agreed; in today’s climate the deal would more likely to be 12-18 month’s rent free. Generally

the market is perceived to be in better shape that the office market.

Figure 27: Industrial and Warehouse – Average Rental Rates, Core PUSH area, 2009-Q1 2013


Figure 28: Industrial and Warehousing Rental Rates 2009- June 2013

Approximate Average Industrial and Warehousing Rental Rate

2009 Q1 Peak rental rate during 2009-

2013 Q1 2013 Q1

Eastleigh £4.60 £5.90 £5.90

Fareham £5.90 £6.10 £5.70

Gosport £5.80 £5.80 £5.20

Havant £4.80 £6.00 £6.00

Portsmouth £6.60 £7.20 £6.40

Southampton £5.70 £5.50 £5.60 Source: Costar, 13th June 2013


Page | 24

Employment Land Availability and Completions Core PUSH area The amount of new employment floorspace developed for employment use with use Class B in the Core

PUSH area is shown in Figure 29 for calendar years 2001 to 2003 and financial years 2004/05 to 2012/13

Figure 30 presents the same data as a chart. It is not always possible to determine, from existing data, the

breakdown between the B1 Business Uses into B1a, B1b and B1c use classes. Where this data is available it

has been separated out and the remaining information has been classed as ‘B1’.

Figure 29 shows that over the 12+ years to March 2013 around 655,500 sq m of employment floorspace

has been developed in the Core PUSH area, of which almost 70% was developed between 2001 and 2006/7

and the remaining 30% between 2007/08 and 2012/13. Development in the last four years has tapered off

substantially. Over the period 2001 to 2013 average annual completions of gross additional employment

floorspace has been almost 50,500 sq m pa. As is evident from Figure 25, the annual gross additional

employment floorspace developed in each year has been variable.

Between 2001 and 2013 over 84% of floorspace developed was B1 space, with development concentrated

in the early years of the period, 2001 to 2002, with a peak in 2004/5 and an ongoing high level of

development in 2006-09. Of the total employment floorspace developed, a quarter (25%) is definitely

confirmed as being offices (B1a), but in reality the majority of B1 space developed is likely to have been

office space. Total B1a (as classified) development between 2001 and 2013 was 166,700 sq m.

Development years for offices were 2001-2002 and 2004-2009. New office space (B1a) developed since

2008 amounts to 46,100 sq m an average of 9,220 sq m pa compared to 15,100 sq m in 2000 to 2007.

A further 7.6% of floorspace developed is B2 and nearly 9% B8.


Page | 25

Figure 29: Employment Floorspace Developed in the Core PUSH area 2000 to 2012-13, Sq m

B1 B1A B2 B8 TOTAL

2000 49,995 9,651 9,352 2,503 71,501

2001 36,408 16,603 16,962 2,218 72,191

2002 22,244 21,528 1,656 4,826 50,254

2003 19,398 5,351 8,076 5,191 38,016

FY 2004-05 79,128 15,380 5,414 11,338 111,260

FY 2005-06 12,971 13,332 244 1,499 28,046

FY 2006-07 42,008 11,504 460 20,486 74,458

FY 2007-08 26,016 27,240 3,907 332 57,495

FY 2008-09 37,883 17,012 0 1,492 56,387

FY 2009-10 6,942 12,777 0 453 20,172

FY 2010-11 28,112 7,802 2,526 4,409 42,849

FY 2011-12 7,714 2,488 340 2,505 13,047

FY 2012-13 11,612 6,022 1,128 1,054 19,816

Total 380,431 166,690 50,065 58,306 655,492

Average per year (2000-2012/13) 29,264 12,822 3,851 4,485 50,422

Source: Hampshire County Council

Figure 30: Employment Floorspace Developed in the Core PUSH area, 2000-2012/13, Sq m



Page | 26

As shown in Figure 31, Portsmouth has accounted for a high proportion of B2 and B8 employment

floorspace development in the Core PUSH area during the period 2000-2012/13. Development of

employment floorspace in Southampton in the B use classes has been predominately B1 and B2. B1

development has also been important in Eastleigh over the 12+ year period. In total, Eastleigh,

Southampton and Portsmouth developed 70% of the B1 employment floorspace during 2000-2012/13.

Figure 31: Employment Floorspace Developed in the Core PUSH area, B-use Class, 2000-2012/13, Sq m


The total land available for employment use by B class type is defined as i) sites defined and allocated in

the Adopted Local Plan, and) ii) sites for which planning permission has been granted (including those

within allocated Employment Areas). Figure 32 shows that there is over 313,000 sq m of permissioned

employment floorspace in the Core PUSH area, 87% with permission for B1 use (87.4%).

Geographically, 71% of employment land permissions are located in Portsmouth and Southampton,

accounting for 38% and 33% respectively of all permissions in the Core PUSH area; 90% for the permitted

floorspace in these areas is for B1 space.

Development of over 60% of permitted floorspace has not yet started. For the remaining 36% work is

either part complete/part started or under construction. The great majority (84%) of B2 and B8 planning

permissions have not yet been implemented; the figure for B1 permissions is not significantly lower; 74% of

approved B1 floorspace has not yet begun development.

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

B1 B1a B2 B8

26.0 20.4

0.8

13.2

14.5

6.4

6.4

6.1

7.9

4.5

1.3

0.5

9.6

7.2

7.8

19.4

18.3

24.7

44.4

48.3

23.8

36.9 39.2

12.7

Southampton

Portsmouth

Havant

Gosport

Fareham

Eastleigh


Page | 27

Figure 32: Employment Land with Permissions in the Core PUSH area, 01.04.2013, Sq m

Employment Land Permissions (ELP) (Sq m)

Not started (% of Total ELP)

Part complete/Part not started or under

construction (% of Total ELP)

Under construction (% of Total ELP)

B1 74,202 93.0 7.0 0.0

B1-8 139,757 34.2 41.8 23.9

B1-A 59,752 81.2 0.0 18.8

B1c 420 0.0 100.0 0.0

B2 13,545 93.4 0.0 6.6

B8 26,067 78.7 0.0 21.3

Total 313,743 63.3 20.4 16.3 Source: Hampshire County Council

At the beginning of April 2013 there were 190 hectares of land allocated for employment land developed in

the Core PUSH area (see Figure 33); 29% of total allocations are in Eastleigh, 20% in Fareham, 17% in

Havant and 15% in Portsmouth.

Figure 33: Allocations in the Core PUSH area, 01.04.2013, Sq m

Core PUSH authorities (ha)

Eastleigh (ha)

Fareham (ha) Havant (ha)

Portsmouth (ha) Gosport (ha)

Southampton (ha)

B1 34.14 28 0.37 1.3 4.47 B1-8 151.34 26.5 37.63 31.23 21.8 24.51 9.67

B1a 3.89

0.13 1.42 2.02 0.32

B2 0.24 0.24

B8 0.85

0.85

Total 190.46 54.74 38.0 32.66 28.54 26.53 9.99 Source: Hampshire County Council

In total, 55 hectares of employment land were lost to other uses between 2000 and 2011/2012; the largest

proportion (28 hectares) to residential uses.

Figure 34: Total employment land lost, 2000 – 2011/2012

Total employment land lost to other uses Sq m

In the Core PUSH area 54.9

Total employment land lost to residential Sq m

Total 27.8 Source: Hampshire County Council

Figure 35 summarises the overall supply of employment land and floorspace as of April and June 2013.

Page | 28

Figure 35: Components of Supply of Employment Land and Floorspace, April and June 2013

Components of Supply of Employment Land and Floorspace [June 2013]

Eastleigh Fareham Gosport Havant Portsmouth Southampton Core PUSH

area

Available vacant office (sq m) [13.06.2013] 12,636 9,463 2,005 6,262 20,513 49,483 100,360

Available vacant industrial/warehouse (sq m) [13.06.2013] 56,267 23,945 15,544 20,101 43,333 17,244 176,434

Permissions (sq m) [01.04.2013] 27,353 31,538 3,682 29,359 118,541 103,270 313,743

Allocations (ha) [01.04.2013] 54.74 38 26.53 32.66 28.54 9.99 190.46

Total (sq m) 643,656 444,946 286,531 382,322 467,787 269,897 2,495,137

Total (ha) 64.6 44.5 28.7 38.2 46.8 27.0 249.5 Source: Hampshire County Council

The Welborne Employment Strategy Appendix 2 Strategic Sites Update

Submitted to Fareham Borough Council November 2013 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 M: 07881 348 244 E: [email protected]



Page | 2

1. Introduction

About this Appendix

Fareham Borough Council is continuing to progress with the master planning for Welborne, the New

Community North of Fareham, and a team led by LDA Design and Parsons Brinkerhoff have been appointed

to take forward the master planning process.

Wessex Economics has been appointed as part of the LDA/Parsons Brinkerhoff team to review and update

the Employment Strategy for Welborne, taking into account the publication of the draft Welborne Plan

published in April 2013; and a fresh review of the evidence base relating to the provision of employment

land at Welborne and more generally in the Core PUSH area.

An important element of the review and update of the Employment Strategy for Welborne is to understand

how the proposed development of employment floorspace at Welborne relates to or differs from the offer

of other strategic sites coming forward in the sub-region. This prompts the question ‘what are the other

key strategic sites in the sub-region that Welborne might complement or might compete with in seeking to

attract development?’

This working paper therefore provides an update of the PUSH review of key strategic sites in South

Hampshire that took place in 20101, particularly reviewing the extent to which policy and delivery of these

sites have moved forward since 2010. This work will provide important context if it is proposed to change

the overall quantum of employment floorspace to be provided at Welborne.

The 2010 PUSH review of key strategic sites identified over 40 strategic sites in South Hampshire. This study

focuses on those sites from this long list that the PUSH local authorities identify as being relevant to

decisions on employment floorspace at Welborne. These include sites in the six local authorities entirely in

the PUSH area (the core PUSH authorities) and two of the authorities, Winchester and Test Valley who have

part of their area with the boundaries of PUSH (PUSH Plus).

A total of 21 sites were identified as relevant. Subsequently, information has been gathered from each of

the relevant council regarding each site, updating details on the timescale for each site coming forward, the

volume and type of development or space and highlighting any key uncertainties about timing.

1 Employment sites and Premises Demand and Supply Analysis, DTZ for PUSH, October 2010

Page | 3

2. Strategic Sites Update

Overview Around 865,000 sq m (Figure 2) of B use class employment floorspace could be provided by the 21 strategic

sites identified as relevant to Welborne. It is important to bear in mind this is not the total availability of

land for employment purposes. The 2010 DTZ study identified another 20 sites of significance and

estimated the total strategic supply available in the PUSH area (including then part of New Forest) at

1,650,000 sq m.

In some instances, as noted further below, the employment floorspace estimates set aside for each site

may change/be reduced over the course of the coming years. It is therefore important to stress that the

figures are estimates and could alter as plans progress. The site at West Waterlooville illustrates the point.

It is expected that there may be a reduction in the quantity of employment floorspace at West

Waterlooville over the next couple of years as the demand and need for space is reassessed.

Similarly, in addition to changes in quantum, the timing of when sites come forward for development or are

completed may change.

In a number of cases, it has not been possible to define the exact timing of when a site will come forward

for development. Where this is the case the quantum of floorspace to be developed over the period 2011-

31 has been identified, but no information on phasing is provided. Equally it has not always been possible

at this stage to identify the type of B class use that will be developed on each site, because this has not

been determined. Where this is the case the breakdown into different sub-classes in the B use class has

been left blank.

Figure 1: Location of 21 Strategic Sites

Source: Google maps

Page | 4

Strategic Sites by Use Class and Phasing Period The majority of floorspace proposed is for B1 use. For most sites a breakdown of the B use class into its

separate components (B1, B2, B8) has been possible; though no breakdown is possible for 16% of the total

(141,000 sq m). Of that definable by a B use category, over 60% of development to be brought forward is

likely to be B1 space, a further 32% B2/B8 and the remaining 6% B8.

Figure 2: Phasing Period and Use Class of Strategic Sites

Sq m (Number) %

Phasing Period of Employment Floorspace Development

2011-2016 22,710 3.9

2016-2021 127,780 22.0

2021-2026 236,820 40.9

2026-2031 192,330 33.2

Total quantum given a time schedule 579,640 66.9

Sites with no information about timing 286,305 33.1

2011-2031 (Total Quantum) 865,945

Use Class of Employment Floorspace Development

B1 455,220 62.8

B2/B8 229,520 31.7

B2 - 0.0

B8 40,000 5.5

Total B use class breakdown 724,740 83.7

Sites with no information about B use class 141,205 16.3

2011-2031 (Total Quantum) 865,945

Allocating quantum to a time schedule has been less easy and is not as well defined. Overall, 286,000 sq m

or 33% of the total quantum was not easily categorised into a time bracket due to various uncertainties. Of

the quantity of employment floorspace that could be placed in a time frame, 26% of the floorspace

identified (150,000 sq m) is likely to come forward before 2021, and 74% (429,000 sq m) between 2021 and

2031. The breakdown (where defined) of employment floorspace in this time period (2021-2031), which is

the period probably of most relevance to plans for Welborne, equates to 65% of B1 and 35% of B2/B8.

Further details on each of the 21 strategic sites, key uncertainties around timings and their implications for

Welborne are discussed in further detail in the following section.

Strategic Sites Identified as Relevant to Welborne

Eastleigh

Three of a possible four strategic sites located in Eastleigh are identified as relevant to Welborne; these

comprise Eastleigh River Side, the extension of Botleigh Grange Business Park and development of a

storage distribution/B1 site, potentially within the eastern part of the Borough. Figure 3 presents the

estimated quantum, timing and B use class for each site. The majority of employment floorspace is

expected to be B2/B8, of which over 70% is estimated to come forward during the period 2021-2031.

Page | 5

Expansion of Botleigh Grange Business Park and the development of storage distribution/B1 site is

expected to occur during the Eastleigh Local Plan period up to 2029. Due to the emerging nature of these

two sites, specific timings are not presented. Each of the strategic sites is discussed in more detail below.

Figure 3: Eastleigh Strategic Sites

Eastleigh

Estimated Net Additional Phasing (Sq m) Estimated Net Capacity (Sq m)

2011-2016

2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

1. Eastleigh River Side

i) Railway Land/St Modwen - -

5,000

5,000

10,000 -

10,000 - -

ii) Northern Business Park - -

65,000

66,000

131,600 -

131,600 - -

iii) Land at Prysmian, Chickenhall Lane -

10,000

11,000 -

21,000 -

21,000 - -

2. Botleigh Grange Business Park Extension

10,000

10,000

3. M27 Corridor of Eastleigh Borough (Storage Distribution)

40,000

40,000

EASTLEIGH SITES - TOTAL -

10,000

81,000

71,000

212,600

10,000

162,600

-

40,000


Lying immediately to the east of Eastleigh town centre, close to Junction 5 of the M27, River Side is an area

of approximately 130 hectares, designated as a strategic employment zone with potential to contribute

significantly to economic growth of the South Hampshire sub-region.

Presently, the site comprises a range of land uses including employment, some residential, rail sidings,

Eastleigh railway station, Southampton Airport, a sewage works and pasture land. The area includes

unserviced greenfield land, an existing business estate in need of improvement, and brownfield land

available for regeneration.

River Side is a predominately privately owned site with five major landowners: Legal and General, St

Modwen, Prysmian, Network Rail and BAA. Both public and private sectors are working together in

partnership to deliver the regeneration of the site.

Regeneration of the area aims at offering a mixed use environment providing a range of employment

opportunities. As a site, River Side has been identified as a strategic site for some time and it is expected

the site will come forward for development in the 2020s. Large areas of the site require major

modernisation with significant investment in infrastructure to enable the vision for the area to be realised.

The four main development opportunities include:

A 20 hectare site owned by St Modwen used in the past as a railway works. The railway land

redevelopment and re-intensification of the area, which is currently under used, is very much

dependent on the businesses operating there and their need to make better use of the land. There

Page | 6

is interest in development by these businesses and current discussions are taking place with

Network Rail about a greenfield site that they own to the east of the Railway Land/St Modwen site

and how these two sites could be brought together. The existing site is currently being marketed

for rail freight and engineering uses but with potential for a range of other uses. It was noted in

our discussions that office development is unlikely to be suitable for this site.

The Northern Business Park equates to 32 hectares of unserviced greenfield land and is owned by

Southampton Airport, BAA and Network Rail. It would suitable for a range of uses, including

logistics and businesses that would benefit from proximity to the airport. The site is ‘heavily

constrained’ as there is currently no road access to the Northern Business Park other than a small

agricultural track. The development potential of the site is dependent on delivery of a new link road

through the site, known as the Chickenhall Lane Link Road. However with high development costs

for the link road and constrained public sector funding, there are currently limited mechanisms for

delivery of the site. The site is therefore being viewed as an ‘opportunity’ rather than currently

deliverable and is not being relied on to deliver employment floorspace in the Borough. The site

will remain available and is likely to be used for airport-related uses unless the public road access

issue can be delivered, in which case the site would come forward for other B2 or B8 and at a latter

period than suggested in Figure 3.

The third main area to be developed is around 7 hectares of unserviced greenfield land with

existing access from Chickenhall Lane, owned by Prysmian. This site is suited to heavy/light industry

or logistics operations. There is reported to be some interest in development of the site. Figure 3

sets out likely phasing. The nearby large sewage works probably constrains use to B2/B8 uses.

In terms of the regeneration of the existing industrial estates, options involving development for

offices, technology businesses and new homes, linked into the town centre are being considered.

2. Expansion of Botleigh Grange of Business Park

The proposed development at Botleigh Grange Business Park would be a 2.6 hectares extension of the

existing (2.1 hectares) Botleigh Grange Business Park, located west of Woodhouse Lane on the eastern side

of Eastleigh Borough towards Fareham. This would allow development of an additional 10,000 sq m of high

quality office accommodation (B1a, B1b and B1c). A number of landownership issues will be explored

through consultation of the Draft Local Plan in late September 2013. It is hoped that any issues, including a

small parcel of land identified for residential use, can be are resolved through the Local Plan later this year.

There are no current indications of when the site might be developed.

3. M27 Corridor of Eastleigh Borough (Storage Distribution)

A further 40,000 sq m of employment land is likely to be required as part of Eastleigh’s emerging Local Plan

(yet to be adopted and subject to consultation as a draft plan in September 2013), to compensate for the

anticipated loss of existing employment sites to alternative (residential) use. Whilst no location or site has

been formally identified for this quantum, some interest has been expressed in the eastern part of the

Borough and it is likely that a site close to the M27 would be the most viable option. Other sites within the

Page | 7

Borough will need to be reviewed and may be deemed more suitable. The most likely use is for B8 and B1a

uses. The remaining requirement will be delivered within the Local Plan period and as proposals come

forward, it could marginally exceed the 40,000 sq m.

Fareham Three of a possible six strategic sites in Fareham were identified as significant to Welborne. These are

shown in Figure 4 and include Solent Business Park 2 (Fareham) and two of the four key areas in Solent

Enterprise Zone - Hangers East Mid Area and West. It is anticipated that around 72,000 sq m of

employment floorspace will come forward on these sites in the period up to 2031. Of this around 66% is

likely to be B2/B8 and the remaining 34% B1. Further breakdown of the floorspace quantum was not

possible due to the uncertainties surrounding the three sites.

Figure 4: Fareham Strategic Sites

Fareham


2011-2016

2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

Solent Business Park 2 22,000

22,000

Solent Enterprise Zone (Daedalus) - Hangers East Mid Area

28,300

2,300

26,000

Solent Enterprise Zone (Daedalus) - Hangers West

22,000

22,000

FAREHAM SITES - TOTAL 72,300

24,300

48,000

1. Solent Business Park 2

This site is adjacent to the established Solent Business Park; Solent Business Park 2 is the second phase of

the development. The site is located between Southampton and Portsmouth and accessible from Junction

9 of the M7 motorway. Owned and managed by Goodman, the developers of Solent Business Park, Solent 2

is the most westerly part of Solent Business Park. Solent 2 can provide 44,000 sq m of employment space in

total with an equal share located in Fareham and Winchester. The greenfield site in Fareham has capacity

for 22,000 sq m of development and is identified for B1 use.

The owners Goodman are interested in allocating the Solent 2 (Fareham) to alternative uses to

employment and have explored options such as residential, community and retail uses with Fareham

Borough Council. Goodman’s interest in doing this reflects the significant volume of vacant space at the

Solent 1 Business Park and significant capacity in both Solent 1 and the Winchester part of Solent 2.

However, the Fareham Local Plan stipulates the safeguarding of Solent 2 (Fareham) for B1 use. Hence an

alternative use is unlikely to be allowed. The site is well located and suitable for B1 uses and therefore the

Council has confidence that as the market picks up the site will be attractive. No indication on when the

site would come forward for development was given.

Solent 2 (Fareham) is already serviced with roads and a mini roundabout and ready for development

without need for further funding. The key barriers for the site coming forward include: competition from

Page | 8

existing B1 space in the market; the need for economic conditions to improve; and uncertainty on how the

market will respond to the site as economic conditions pick up.

Office development at Welborne is not perceived by the Council to be in conflict to the Solent 2 (Fareham)

site. Wessex Economics would comment, however, that if both sites are active in the market at the same

time, they are likely to be pursuing the same occupiers. Both are equally well located in terms of the M27,

though Welborne will offer (in the longer term) closer integration with a reasonably substantial District

Centre.

2. Solent Enterprise Zone (Daedalus) – Hangers East Mid Area

Daedalus is located on the Gosport peninsula in Hampshire and occupies a coastal location on the Solent

between the residential communities of Lee-on-the-Solent to the east and Stubbington and Hill Head to the

west. Part of the site is in Gosport Borough and part in Fareham Borough. The main towns of Gosport and

Fareham are located to the east and north respectively.

HMS Daedalus closed in 1996, and the MoD declared it surplus to requirements in 2004. It was

subsequently acquired by SEEDA and the Marine and Coastguard Agency (MCA) in 2006. The site received

some public sector money to keep it ticking over. The MCA have a new building for its Search and Rescue

(SAR) Helicopter Unit at Daedalus with proposals for additional facilities.

The airfield is currently used by a limited number of existing small scale aviation users. The site is also home

to a number of smaller and medium sized businesses that make use of the former hangars and military

buildings on an interim basis until long-term arrangements are developed.

The site was taken over by HCA and in August 2011 Daedalus was designated an Enterprise Zone after a

successful application by the Solent Local Enterprise Partnership (LEP). Development of the EZ is a major

LEP priority. The Enterprise Zone sector focus is on advanced manufacturing (marine, aviation and

aerospace sector) and the site has marine access and retains a private operational runway.

Daedalus can be divided into four key areas: Daedalus Waterfront, Hangers West, Hangers East and the

Airfield. The airfield remains the focus for the site with built development being directed to the areas

around the airfield.

Hangers East and Hangers West are within by Fareham Borough. Proposals for the Hangers East Mid site

are for primarily B2/B8 employment floorspace and some B1 which is most likely to be located at the

entrance of the site. A package of infrastructure projects have been agreed, funded by Growing Places Fund

monies, with a £15 million programme underway to overcome barriers to access and infrastructure to be

delivered largely over the next 18 months.

Page | 9

3. Solent Enterprise Zone (Daedalus) – Hangers West

Hangers West comprises three linked triangles of land formed by the serrated edge of Stubbington, and lies

on the west side of the airfield. It is expected that the site will be developed for 22,000 sq m of B2/B8 space

with a focus on defence and secure aviation. A newly created road access has been put in place as well as a

gate for security ensuring that traffic can enter the site directly. This represents much enhanced access to

the site compared to previous arrangements.

A number of barriers remain to the development of both Hangers East and Hangers West, these being:

Funding (possibly RGF) may be need to get the sites operational and to attract companies to locate

there

The sites are 4 miles from national road access (M27), and therefore road access is seen to be a

problem; an issue which sites on the M27 do not have

An improved image of the site is required. The site has failed to attract development interest for

some time and negative perceptions needs to be addressed. At present a marketing exercise is on-

going by HCA.

Planning permission was agreed in principle for the two Enterprise Zone sites on 29th March 2012 subject to

the signing of a Section 106 agreement, similar to the Daedalus Waterfront site in Gosport (as below).

The first development on site is likely to be a new Centre of Excellence for Engineering, Manufacturing and

Advanced Skills Technology being development by Fareham College. This will comprise around 4,000 sq m

of space to be built by late 2014. At present Fareham Council is in discussions with Solent LEP about

bringing forward other developments at Daedalus such as an incubator to help spur other development in

the next couple of years.

Neither of the two sites at the Enterprise Zone are perceived by FBC to be competing with Welborne, given

that the focus of the EZ will be on advanced manufacturing business. It is hope that the unique feature of

an operational airfield will attract businesses, and those others suppliers will be drawn to co-locate close to

prime manufacturing businesses.

Wessex Economics would take the view that Welborne, along with all the employment sites in the M27

corridor will provide competition to the Solent LEP for any businesses with fairly generic business space

requirements, who wish to have good access to the national motorway network, and whose operations are

dependent on good road access.

Page | 10

Gosport Two of a possible five strategic sites located in Gosport are identified as of relevance to Welborne. These

are presented in Figure 5 and essentially comprise the Enterprise Zone (Daedalus) Waterfront area and the

MoD Married Quarters site. According to Figure 5 the majority of development will occur in the 2020s with

over 50% of the 79,000 sq m due to come forward during the period 2021-2026 and a further 36% in the

latter period 2026-2031. The split in B use type that will be developed is being kept flexible (B1, B2 and B8)

although it is likely that the MoD Married Quarters Site will be B1.

Figure 5: Gosport Strategic Sites

Gosport


2011-2016

2016-2021

2021-2026

2026-2031 2011-2031 B1 B2/B8 B2 B8

Daedalus Waterfront Site

1,000

40,000

29,000

70,000

MoD Married Quarters site

9,000

9,000

9,000

GOSPORT Sites - TOTAL 10,000

40,000

29,000

79,000 9,000

1. Solent Enterprise Zone, Daedalus Waterfront Site

The Daedalus Waterfront Site lies between the seafront, the built up area of Lee-on-the-Solent and the

airfield. This area is the most developed part of the Enterprise Zone at Daedalus and has direct access to

the Solent via the slipway. Planning permission was agreed in principle for the site on 29th March 2012

subject to the signing of a Section 106 agreement. Thus planning permission has still to be issued. There are

a few remaining issues with affordable housing on the site before S106 can be issued; these are unrelated

to the employment element of the site. Consent for planning permission may be issued in Summer 2013.

Whilst highways and infrastructure have been an issue for the site, these have been largely overcome.

Bringing the site forward is dependent on conditions in the wider economy. A lot of interest has been

expressed in developing the site.

The proposed development for the Waterfront site is an employment led mixed use scheme including up to

around 70,000 sq m of commercial floor space in new buildings and re-use of existing buildings with use

classes B1, B2 and B8, including premises suited for advanced manufacturing and technology clusters

including marine, aviation and aerospace uses.

The split between B1, B2 and B8 is flexible; Gosport Borough Council have not been prescriptive of the split

of B use types in the Local Plan or SPD. It is perceived that B1 (B1a will be a smaller proportion, with B1c

light industry of greater importance) and B2 will dominate the site with B8 in support of these uses.

As well as employment uses, the scheme will include up to 1,075 sq m of retail, up to 200 residential units,

up to 32 units of care accommodation, up to 1,839 sq m of community uses, up to 8,320 sq m of hotel use,

up to 2,321 sq m of leisure, new and upgraded vehicular and pedestrian access arrangements

Page | 11

Large commercial buildings occupy the northern part of the area with listed buildings and a conservation

area with internationally important habitats is located within the site.

2. MoD Married Quarters Site

Once owned by the MoD, this site was set aside for MoD housing in the form of married quarters. With no

on-going MOD requirement for housing, the site was sold to HCA. The pocket of land does not have outline

planning consent. The Gosport SPD identifies a residential site to the southern part of the site and to the

north being suited to employment. The Council is currently in pre-application discussions for the site and

around 9,000 sq m of B1 is expected to be developed during the period 2016-2021.

Havant Out of a possible six strategic sites located in Havant, only one Dunsbury Hill Farm is identified as of

relevance to Welborne, see Figure 6. Plans for over 61,000 sq m is expected to be accommodated on the

strategic site in two separate phases. The exact timing of when the site will come forward has not been

determined.

Figure 6: Havant Strategic Site

Havant


2011-2016

2016-2021

2021-2026

2026-2031 2011-2031 B1 B2/B8 B2 B8

Dunsbury Hill Farm 61,779

Havant Sites - TOTAL 61,779

1. Dunsbury Hill Farm

Dunsbury Hill Farm is a key strategic employment site for Havant Borough and the wider sub-region, which

will form a new businesses gateway to South Hampshire from the A3(M). The creation of a high quality

business (focused on knowledge-based) and technology park with first-rate transport connections is

intended to deliver a large number of jobs in close proximity to Leigh Park. Dunsbury Hill Farm is a large

greenfield development site.

Phase 1 of the development, located in the southern and central portions of the site and, in line with the

requirements of the Core Strategy, comprises 13.2 ha of land which will accommodate 46,450m² of

employment floor space (Use Classes B1, B2 and B8). Phase 1 will include 10,000m² for an Enterprise

Centre and 5,574m² of hotel floor space. Phase 1 will also include other ancillary uses required to support

the site and its employment uses.

Phase 2 of the development comprises 7 ha of land and is located in the northern portion of the site. Phase

2 will provide an additional 15,300 m2 of employment floor space with B1, B2 and B8 Uses. In total the site

will provide around a third of the total requirement for new employment in the Borough up to 2026.

Page | 12

The requirements in the Core Strategy set out a maximum of 20% of employment floorspace to be for B8

storage and distribution, with the remainder of the floorspace split flexibly between B1 and B2. B1a uses

will be acceptable on the site providing a sequential test has been carried out to ensure that there are no

suitable sites in the town centres.

In reality, the site is regarded by HBC as being ideally suited to B8 and B2 (advanced manufacturing). It is

envisaged that the site could be very attractive to B8 users, and that this could, if permitted by a change to

the Core Strategy policies, mean that the site is developed for B8 uses, depending who takes on the

development of the site.

The exact timing of the two phasing periods is not established at present. PUSH funding has helped

progress the planning application of the site. It is anticipated that planning permission for the site will be

granted in Summer 2013 (July). Following consent for planning permission it will then be possible for

Portsmouth City Council to begin marketing the site.

The preferred developers identified in 2008 remain interested in the site, but fresh expressions of interest

will be sought by Portsmouth City Council as landowners. The precise type of end users is not yet known as

the site has not been marketed since 2008.

To date, the site is awaiting funding for provision of major infrastructure: a new west to east link road

through the site; and works at the Asda roundabout to the south of the site. Phasing of the development is

linked to the implementation of these two schemes. Once they are completed, development can

commence. Until the link road is put in place development on site is not possible. When the works will be

undertaken is dependent on funding.

A bid for RGF and Local Transport Board funding has been submitted for the Link Road and a funding bid

made by HCC for the Asda roundabout. Other funding sources include Jessica and Growing Places. An

unsuccessful bid for Pinch Point Funding was made. In the next few months feedback on the status of the

funding bids will be known.

The main barriers therefore relate to the two major infrastructure investments required which in turn are

dependent on funding. A steering group of HCC, Havant County Council and Portsmouth County Council are

working in partnership to overcome these challenges. Once unlocked, the development will take up to 20

years to build out.

Employment space at Welborne is seen as competition for occupiers at Dunsbury Hill Farm.

Page | 13

Portsmouth Four of a possible seven strategic sites located in Portsmouth are identified as of relevance to Welborne

and are presented in Figure 7. These four sites are Lakeside Business Park, Trafalgar Wharf, Tipner and

aspirations to regenerate the city centre office market.

Figure 7: Portsmouth Strategic Sites

Portsmouth


2011-2016

2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

1.Lakeside Business Park, land east of IBM, Western Road and off the A27 22,710 14,670 19,020 12,630 69,030 69,030

2.Aspirations to regenerate the city centre office market

5,000 5,000

10,000 10,000

3.Trafalgar Wharf, Southampton Road - 9,920 - - 9,920 - 9,920

2018-2019

4. Tipner - 12,500 12,500 - 25,000 25,000

Portsmouth Sites - TOTAL 22,710 42,090 36,520 12,630 113,950 104,030 9,920

1. Lakeside Business Park

Lakeside Business Park or Lakeside North Harbour is an established office campus covering an area of 40.8

hectares and comprises 55,742 of quality office accommodation, home to UK Headquarters of IBM. The site

is adjacent to Junction 12 of the M27.

A series of iconic buildings are planned including 69,030 sq m of new office space and 21, 140 sq m of other

uses including shops, restaurants, hotel, car dealership and a private hospital.

The site received outline planning permission in December 2009 for a mixed use scheme and it has been

agreed that the development will be phased over 16 years in five phases as follows:

Phase A - Some office, shops, hotel, car dealership and hospital including (second) access road to

Western Road and new footpath/cycleway

Phase B - Office and aparthotel

Phase C - Office and restaurant

Phase D - Office and relocation of IBM parking and (third) access road to Western Road

Phase E - Office and partial relocation of existing IBM parking

Highways infrastructure work in the form of junction improvements are to be completed at various stages

as set out above. Currently there is no bus service along Western Road and there are highway capacity

issues with the A27 around Portsbridge roundabout.

The infrastructure delivery plan sets out in more detail the highway improvements that are needed which

include:

Eastern and western accesses off Western Road;

Page | 14

Improvements to the cycleway on Western Road and carriageway crossing;

Improvements and signalisation of Portsbridge and North Harbour roundabouts; and

Improvements to the Marriott junction

2. Aspirations – City Centre Office Market

As set out in policy PCS11, Portsmouth city centre is one of the city’s key employment areas, particularly for

the office economy and this role will be expanded in the future. There are aspirations for around 10,000 sq

m of offices in the city centre of Portsmouth around the train station and main shopping area.

The City Centre Masterplan identifies a number of sites suitable for this employment space. Furthermore, it

is possible that an additional opportunity of some 10,000 sq m may be added to the original 10,000 sq

proposed and be brought forward. However, this at present is an initial opportunity and therefore has not

been counted in Figure 7.

The 10,000 sq m of office development is likely to come forward before 2021; however it is important to

note that this timing is very indicative. Challenges for development potential include stimulating demand in

the city centre. Competition from other sites that can be accessed by car continues to threaten city centre

demand. Furthermore the type of buildings found in the city centre are such that they would most likely

require redevelopment and demolition.

3. Trafalgar Wharf

Trafalgar Wharf is a set of large industrial units which extend into Portsmouth Harbour, opposite Port

Solent and 5 minutes from the M27. Formerly the old Vosper Thorneycroft site, Trafalgar Wharf took over

the site in late 2008. Employment space within the site is currently underused.

The site is split into two. The northern section is likely to be developed for housing; while the southern

section will be developed for marine employment uses, taking advantage of the site’s waterfront location.

Any proposals for the site will need to make the site safe from flooding. One application for development of

the site has been received comprising residential (163 dwellings) and flood defences as part of a mixed use

scheme and is being considered.

Timing for the development is estimated to be towards the end of the 2016-21 period likely from 2019

onwards. There are no initial uncertainties around the timing of bringing the site forward.

4. Tipner

Tipner is a strategic gateway at the entrance to Portsmouth City located on the M275 motorway. It is one

of the city’s largest regeneration sites. Proposals for Tipner are for a mixed use development to deliver

25,000 sq m of offices, 1,600 new homes and a hotel (17 hectares approximately). The site is brownfield

and currently has a variety of uses, including a greyhound stadium, aggregates wharf and scrap yard and

Page | 15

has three main owners (the city council, the Homes and Communities Agency and the Tipner Regeneration

Company). Large areas of Tipner have been largely derelict for a number of years.

The site is important for nature conservation and there are other issues associated with the site that need

to be overcome before development can come forward, including land contamination, flood risk, the

capacity of the existing sewer system and access to the site. The specific issues that the infrastructure

development plan identifies as required to deliver the regeneration of Tipner are:

motorway interchange and bus lane to M275

flood defences

highway improvements

increased sewer capacity

electricity sub-station

park and ride facilities

public transport links including Bus Rapid Transport

improved cycling and walking links

community facilities including a GP surgery and contributions towards community centre

improvements.

The development of 25,000 sq m of employment floorspace (Tipner West) relies on the provision of the

motorway junction and slip roads prior to any development. The site is currently accessed from Tipner

Lane. To aid deliverability of the whole site the council has received funding from the Department of

Transport towards the cost of the motorway junction and sliproads, providing direct access from the M275

via a new junction.

This transport scheme was given planning permission in April 2010 and work (motorway junction and park

and ride including new Tipner interchange junction on the M275 motorway, 663-space park and ride facility

and southbound bus priority lane on the M275) began in January 2013 and is scheduled for completion by

Spring 2014.

Plans have been approved for part of the site and remediation work has begun. As yet there are no

planning applications for the employment uses on site. Timings for bringing forward the employment

aspects of the site have altered slightly. It is anticipated that 12,500 sq m would come forward in 2018-

2019, with the remaining 12,500 sq m spread evenly over the period 2021-2026.

The Council is in discussions with central government to secure freedoms and flexibility as part of the City

Deal initiative. A successful outcome to these proposals may speed up the development of Tipner.

Currently a piece of work is being undertaken relating to the City Deal and Tipner, the results of which are

likely to be due at the end of July 2013.

Page | 16

Southampton Five of eight possible strategic sites located in Southampton are considered to be of relevance to Welborne

(see Figure 8). These comprise The Bond, Aqua, Royal Pier, Central Station and the Major Development

Quarter. Over 165,000 sq m of B1 development is proposed in and around Southampton, 66% of this is

likely to be brought forward between 2021-2031.

Given the quantum of B1a development planned in Southampton city centre, there is concern by

Southampton City Council (SCC) for any B1a development at Welborne and its consequent impact on the

Southampton city centre’s office offering and take up. It is noted that the B1a provision as set out in

Welborne’s current masterplan (39-44,000 sq m) is higher than figures set out in the South Hampshire

Strategy (34,000 sq m). This is however, due to the fact that the South Hampshire Strategy period extends

to 2026, while the Welborne Masterplan covers five additional years to 2031.

SCC emphasise that any proposals at Welborne need to conform with the National Planning Policy

Framework’s sequential test for the location of office development: city/town centres being the first

choice, then edge-of-centre locations, and only if suitable sites are not available should out-of-centre sites

be considered. SCC also highlight that Welborne would need to take account of the fact that office sites in

Southampton are likely to come forward at the same time as B1a building at Welborne.

Wessex Economics would note that it is hard to define where Welborne sits in relation to these criteria

since it is a new community, not a city, but on the scale of a small town. It can therefore be regarded as an

urban centre on the scale of a market town or an edge of centre location, since there will be functional links

with Fareham.

Figure 8: Southampton Strategic Sites

Portsmouth


2011-2016

2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

2016-2018

1.The Bond

9,570

9,570

9,570

2.Aqua (West Quay Phase 3)

5,600

5,600

5,600

2018-2021

2021-2026

3.Royal Pier

29,200

43,800

73,000

73,000

4. Central Station

1,620

15,800

17,420

17,420

5.Major Development Quarter (Western Gateway & West Quay Retail Park)

60,000

60,000

60,000

Southampton Sites - TOTAL -

45,990

59,600

60,000

165,590

165,590

-

-

-

Page | 17

1. The Bond

The Bond will be located in the centre of Southampton’s business district and is one of two cleared vacant

sites available for office development in the city centre (the other being Aqua). The site has yet to be built

due to lack of demand for offices. The site is for medium term delivery and is likely to come forward in the

next five years potentially between 2016-18. There are no real issues for the site other than a lack of

market demand and this will determine when the site is developed. It was felt appropriate that this office

development (as well as Aqua below) would be taken up before Welborne could start building any B1a.

2. Aqua (West Quay, Phase 3)

Aqua is the second of two cleared vacant sites available for office development in Southampton city centre.

The West Quay Phase 3 is allocated for mixed use development comprising retail, food and drink, offices

and residential with leisure, including a multi-purpose sports and leisure facility.

The site is for development in the medium term and is likely to come forward in the next five years around

2016-2018. The site has been cleared and the hotel built; however no office development has been built to

date due to a lack of market demand. No issues for the site are evident other than a lack of market

demand.

3. Royal Pier

The Royal Pier is a £450 million mixed use development that aims to transform the landscape of

Southampton’s waterfront. Owned by Southampton City Council, the Crown Estate and Associated British

Ports (ABP). The Royal Pier is one of two longer term key office development sites in the city (the other

being Central Station). Proposals for the site include recreation and extension of Mayflower Park, speciality

shops, offices, leisure venues, apartments and waterside attractions. Around 73,000 sq m of office space is

planned for the site, with the majority (60%) coming forward in 2021-2026.

Morgan Sindall Investments Limited (MSIL) is the preferred developer for this major development. At

present, the Council is negotiating legal requirements for the development with its partners MSIL, ABP and

Crown Estate. Public consultations on the proposals will begin following the signing of agreements in 2014.

The development is expected to take place in five phases.

Currently, the development of offices is being held back by the Mayflower Park Extension which is being

developed as part of the office offering. Funding is being sought for the park extension and possible sources

include funding from a large casino (which may be part of the Royal Pier development) as well as grant

funding – neither of which have been secured.

Infrastructure issues exist for the site and are included in a wider package to develop the site.

Page | 18

4. Central Station

The second long term key office development site in Southampton is Central Station Quarter which

includes the redevelopment of both the northern and southern sides of Central Station and major

refurbishment of the station.

The improvements have been undertaken as part of the Department for Transport-backed National

Stations Improvement Programme (NSIP), and managed by Network Rail and the South West Trains with a

contribution of £800,000 from Southampton City Council towards the total £2.4 million cost.

Redevelopment and improvements works to the northern side of the Central Station are now on-going. In

the period 2018-2021 work is expected to commence on the southern side which plans for a major

redevelopment to create a new Central Business District comprising high density office development with

links to the waterfront and main shopping area. The first phase of the work will focus on new shops, small

business space and a hotel. The first phase of work does not require infrastructure, with 1,620 sq m of B1a

expected to come forward.

The majority (phase two) of office space of 15,800 sq m is likely to come forward in 2021-2016 alongside

existing offices, including the Revenue Policy Headquarters. As part of the second phase of work there is a

need to narrow down the dual carriage way (which is currently underutilised); modelling work on this

change is on-going and the Council have submitted a bid to the Local Transport Board for funding of this

improvement. It was felt that there was a reasonable prospect of receiving the funding. Funding is also

being sought from CIL.

5. Major Development Quarter (Western Gateway and West Quay Retail Park)

The Western Gateway Quarter and West Quay Retail Park are both long term redevelopment proposals and

likely to be brought forward post 2026.

The Western Gateway Quarter is the most westerly quarter of the city centre and includes what is currently

the City Industrial Park, the Leisureworld complex, John Lewis warehouse and car showrooms. Currently

the area is of low employment density. The Quarter is very prominent on the western approaches to the

centre. In the short to medium term development of existing or similar leisure/industrial uses is set to

continue.

In the long term there are plans for a comprehensive new mixed-use scheme and redevelopment to

provide a landmark entrance to the city centre which could include new prestigious offices/leisure uses and

residential/hotel uses where appropriate. Redevelopment is not restricted to the long term should a

developer wish to bring this site forward at an earlier date.

The Quarter has an important relationship to the Station Quarter to the north and the Royal Pier

Waterfront to the south and the redevelopment represents an opportunity to create a high profile new

Page | 19

urban quarter linking through to the waterfront and replace or relocate lower order industrial and

commercial uses.

The Council owns much of the Quarter. There is noted interest in the development of the site. However,

the development of the site remains a long term prospect. The summary above sets out the current

expectations which will need to be revisited in the future.

The second element of the site is West Quay Retail Park which may bring forward B1a development. Similar

to the Western Gateway Quarter the site is long term and likely to come forward, if at all, post 2026. The

site will need to be revisited in the future, given the long term nature, it is difficult to project.

Test Valley One of two possible strategic sites located in Test Valley was identified as of relevance to Welborne as

presented in Figure 9. The site is Adanac Park, Nursling and is expected to bring forward over 59,000 sq m

of B1 development evenly spread over three periods from 2016 to 2031.

Figure 9: Test Valley Strategic Site

Test Valley


2011-2016 2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

Adanac Park, Nursling 19,700 19,700

19,700 59,100 59,100

Test Valley Sites - Total 19,700 19,700 19,700 59,100 59,100

1. Adanac Park, Nursling

Situated adjacent to the M271/M27 Junction 3 interchange at Nursling, the business complex of Adanac

Park sits to the west of Southampton.

The site is of particular importance to the sub-regional economy in terms of size and location adjoining the

M271. It has been safeguarded for some time as a high quality office/research/manufacturing development

for either a single user or a small number of users. There are few sites within south Hampshire which have

similar characteristics and present similar opportunities. This supports the approach of a policy restricting

its use to those uses which require large sites with good access to the strategic road network.

Future development would be highly visible from the highway network and would therefore need to be

designed to a high standard. The coverage of the site with buildings needs to be limited in order to

continue to ensure a prestige development and retain the attraction to high quality firms with a clear

corporate identity.

The entire site has outline planning permission restricted to five plots (originally intended for one user)

with detailed permission for one plot. The latter has been implemented with new offices that are the HQ of

the Ordnance Survey. Outline planning consents provide for office, research and manufacturing space. The

Page | 20

remaining four plots have the capacity to become the site for a number of leading organisations. Plot 1

provides for smaller campus style office units, whilst Plot 2, 3 and 5 are for single users. Plot 5 is located at

the entrance of the site.

In Autumn 2011 an appeal was submitted to widen the permitted planning to include D1 medical and

health services. Following this the applicant had a year to submit on reserve matters. However no further

application was made. This appeal has now lapsed; however this remains a material matter.

Adanac Park is a large greenfield site that is available; the allocation is for B1 use, although other health

related uses may be allowed. There is access onto the motorway and services are in place, there is a need

for a Section 106 junction improvement.

It is expected that development will not occur before 2016, but this depends on when an organisation

comes forward with interest. The Council is generally not seeking other uses (than B1) unless a compelling

case comes forward. In some sense Adanac Park may be an alternative or competition for Welborne, if

developed in the short to medium term, or in parallel with Welborne.

Winchester Both of the possible strategic sites located in Winchester were identified as of relevance to Welborne as

presented in Figure 10. The sites include West Waterlooville MDA (Brambles Farm) and Solent 2 East Area

(Winchester City Council).

Figure 10: Winchester Strategic Sites

Winchester


2011-2016

2016-2021

2021-2026

2026-2031

2011-2031 B1 B2/B8 B2 B8

West Waterlooville MDA (Brambles Farm)

85,000

Solent Business Park 2 East Area (WCC)

22,200

22,200

Winchester Sites - TOTAL 107,200

22,200

1. West Waterlooville MDA (Brambles Farm)

As part of the new community proposed at West of Waterlooville around 85,000 sq m of B1, B2 and B8

employment space was proposed for development (a very indicative figure at the time). A total allocation

of 32 hectares was made, and half of this (15 hectares) has been aggressively marketed for B1/B2/B8 for

the last 7 to 8 years with little interest even in the areas where there is planning permission. Outline

planning permission was granted for B1/B2/B8 in early 2009.

The site is split into two employment sites, one to the north on Taylor Wimpey land, where all

infrastructure and services are in place; the second on Grainger land. Grainger are currently on site putting

in place infrastructure and starting to market half of the site in a month or so. Services to the second site

Page | 21

will be in place by the end of 2013. Taylor Wimpey continue to actively look for interest for the

employment space. There is consent on some of the land for intensive care use.

The site is ready to come forward if demand materialises. Consent for development is in place and

therefore this is not an element that is holding the site back. Discussions with the landowners around

alternative uses for the site has been explored. It is likely that the quantum of proposed space will be

reduced over the next two years. It is at this time difficult to project how much of the employment use will

remain. The key factor is the demand for the site; timing of delivery on the site is strictly geared to the

market. The site is available.

It is felt that Welborne is a very different offer and not in competition with development at West

Waterlooville. The existing Brambles Business Park provides for general employment uses, not high tech or

top end in terms of floorspace and it is anticipated that take up would be similarly of traditional, broadly

based business users. The focus at West Waterlooville is job creation with no specific strategy to squeeze

floorspace into the narrow B1/B2 definition.

2. Solent Business Park 2 East Area (WCC)

Adjacent to the established Solent Business Park, Solent Business Park 2 forms the second phase of

development. The site is located between Southampton and Portsmouth and accessible from Junction 9 of

the M7 motorway. The site is owned and managed by Goodman, the developers of Solent Business Park.

Solent 2 is the most westerly part of Solent Business Park. Solent 2 on the east area in Winchester has been

partly developed for B1a and B1c uses equating to 19,646 sq m. The remaining part of the site (16,010 sq

m) is ready for development but currently being held back by a depressed market.

One impetus for the site is additional housing and schools in North Whiteley likely to be consented next

year and in the Adopted Local Plan Part 1. A planning application for 3,500 homes is expected later this year

for the new North Whiteley community. The district Centre of Whiteley has recently been regenerated and

the retail offer improved.

Furthermore, as part of the development of the 3,500 homes, the Whiteley Way will be completed giving

links to the north and west and improving access to Whiteley considerably. Part of the transport package

measures for the new homes is greatly enhanced bus services from Hedge End and Botley through to

Fareham via Whiteley. It is hoped that this will improve access and attractiveness to the area and stimulate

the employment provision and offer.

Page | 22

ANNEX A

Eastleigh


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8


Railway Land/St Modwen - -

5,000

5,000

10,000 -

10,000 - -

Northern Business Park - -

65,000

66,000

131,600 -

131,600 - -

Land at Prysmian, Chickenhall Lane -

10,000

11,000 -

21,000 -

21,000 - -

2.Botleigh Grange Business Park

10,000

10,000

3. M27 Corridor of Eastleigh Borough (Storage Distribution

40,000

40,000

EASTLEIGH SITES - TOTAL - 10,000

81,000

71,000

212,600

10,000

162,600

-

40,000

Fareham


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

4.Solent Business Park 2 22,000

22,000

5.Solent Enterprise Zone - Hangers East Mid Area 28,300

2,300

26,000

6.Solent Enterprise Zone - Hangers West 22,000

22,000

FAREHAM SITES - TOTAL 72,300

24,300

48,000

Gosport


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

7.Daedalus Waterfront Site

1,000

40,000

29,000

70,000

8.MoD Married Quarters Site

9,000

9,000

9,000

Gosport Sites - TOTAL 10,000

40,000

29,000

79,000

70,000

9,000

-

-

Page | 24

Havant


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

8.Dunsbury Hill Farm

56,205

Havant Sites - TOTAL 56,205

Portsmouth


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

Lakeside Business Park, land east of IBM, Western Road and off the A27

22,710

14,670

19,020

12,630

69,030

69,030

Aspirations to regenerate the city centre office market 5,000

5,000

10,000

10,000

Trafalgar Wharf, Southampton Road - 9,920 - -

9,920 -

9,920

2018-2019

Tipner - 12,500

12,500 -

25,000

25,000

Portsmouth Sites - TOTAL 22,710

42,090

36,520

12,630

113,950

104,030

9,920

Portsmouth


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

2016-2018

The Bond

9,570

9,570

9,570

Aqua (West Quay Phase 3)

5,600

5,600

5,600

2018-2021 2021-2026

Royal Pier

29,200

43,800

73,000

73,000

Central Station

1,620

15,800

17,420

17,420

Major Development Quarter (Western Gateway & West Quay Retail Park)

60,000

60,000

60,000

Page | 25

Southampton Sites - TOTAL - 45,990

59,600

60,000

165,590

165,590

-

-

-

Test Valley


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

Adanac Park, Nursling 19,700 19,700 19,700 59,100 59,100

Test Valley Sites - Total 19,700 19,700 19,700 59,100 59,100

Winchester


2011-2016 2016-2021 2021-2026 2026-2031

2011-2031 B1 B2/B8 B2 B8

West Waterlooville MDA (Brambles Farm) 85,000

Solent 2 East Area (WCC) 16,010

16,010

Winchester Sites - TOTAL 107,200

22,200

ALL SITES - TOTAL 22,710 127,780 236,820 192,330 865,945 455,220 229,520 40,000

The Welborne Employment Strategy Appendix 3 Employment Forecasts and Floorspace Requirements

Submitted to Fareham Borough Council September 2013 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 M: 07881 348 244 E: [email protected]




Page | 2

1. Introduction

This Appendix examines the pattern of employment change over the period 2006-11 in South Hampshire; and

then presents up to date forecasts of likely employment change up to 2026. This analysis informs an

assessment of the requirement for employment land in South Hampshire as a whole; the likely split of demand

in terms of offices and industrial and warehouse space. It also compares demand with previous assessment of

overall availability of land to meet employment floorspace requirements.

Employment Change in South Hampshire 2006-11

The PUSH Economic Strategy was refreshed in 2010. The most up to date data on employment available for

the updated Economic Strategy was the 2008 Annual Business Inquiry. Data on patterns of employment

change in the PUSH area are now available upto 2011. Figure 1 summarises data for the 9 PUSH authorities

and New Forest District (which was formerly part of the PUSH area) over the period since 2006. It should be

noted that the data for the PUSH Plus authorities is for the whole local authority area, not just that part of the

authority’s area in PUSH.

Figure 1: Employment Change in South Hampshire 2006-11

Source: BRES, ABI, Wessex Economics

Key points to note from the analysis presented in Figure 1 are as follows:

In the Core PUSH area employment has fallen by a total of 3,000 jobs over the period 2006-11. Job

losses over the period 2008-11 have amounted to 9,200 jobs, but in looking at the period 2006-11 this

was offset by growth of around 6,200 jobs between 2006-07

In contrast employment in the PUSH Plus authorities (whole authorities) increased by 7,200 jobs over

the entire period 2006-11, despite losing 3,500 jobs over the period 2008-11. The PUSH Plus authorities

have therefore out-performed the Core PUSH authorities in terms of employment growth 2006-11.

Over the period 2006-11, Southampton has suffered a particularly large loss of jobs, Gosport has

experience a small loss of jobs and employment in Fareham has remained unchanged. Portsmouth,

Eastleigh and Havant have all experienced an increase in jobs 2006-11


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Among the PUSH Plus authorities, Winchester has significantly outperformed the other authorities in

terms of job growth in the period 2006-11, followed by East Hampshire. New Forest has the weakest

employment growth and is the only one of these authorities that experienced jobs losses 2008-11.

The general pattern of employment change over the period 2006-11 has therefore been that the Core PUSH

area has performed less well than the PUSH Plus authorities. Fareham not only has, by some way, the

smallest employment base of the 6 Core PUSH authorities, but has failed to grow its employment base. Not

surprisingly given its small employment base, it has the highest level of out-commuting of any of the Core

PUSH authorities.

Forecast Employment Growth 2011-26

Wessex Economics has prepared indicative employment forecasts by industry for the whole of the PUSH area

(the Core PUSH authorities, and those parts of the PUSH plus authorities (not New Forest) that fall within the

PUSH area) up to 2026. The methodology used to prepare these forecasts can be summarised as follows:

Baseline employment in 2011 for the PUSH area, broken down by SIC section is based on 2011 Business

Register and Employment Survey data

For those authorities that fall within Hampshire County, it is assumed that employment in each sector

will grow at the same rate as 2012 forecasts for the County as a whole.

For the unitary authorities of Southampton and Portsmouth sector specific employment growth rates

have been applied based on 2012 forecasts.

Figure 2 shows the pattern of forecast employment change for the PUSH area as a whole based on these

forecasts. Forecasts for the entire PUSH area are more robust than at local authority level because the PUSH

area is a single functional economic area. This is recognised in the fact that there is a single economic strategy

for the area and the decision to have a single Local Enterprise Partnership for the entire area.

Key points to note from the forecasts are:

Total employment is forecast to grow by around 40,000-41,000 jobs over the period 2011-26.

Employment growth of 52,700 jobs across 11 sectors is forecast, while there are an anticipated 12,100

job losses across just four sectors.

The sector forecast to have the largest growth is the administrative and support services sector which

comprises a large range of outsourced or contracted activities including office administration and

support, building maintenance, security and travel services, employment services and rental and leasing

activities.

The next largest sectors in terms of employment growth are: the retail and wholesale sector;

professional, scientific and technical services sector; accommodation and food services, and then

information and communications.

Significant job losses are forecast in the manufacturing, education and public administration and

defence sectors.


Page | 4

Figure 2: Forecast Employment Growth 2011-26

Source: Wessex Economics

It is worth noting that employment change by sector can be somewhat misleading in terms of the real pattern

of change. For example one reason for the growth of employment in administrative and support services

activities is likely to be result of increased outsourcing of non-core activities by different organisations in both

the public and private sector. Every prison that ceases to be run by the Prison Service and which is taken over

by a private contractor shifts employment from the public sector to the administrative and support services

sector.

It is important also to bear in mind that employment and the value of output in a sector are different things. It

is possible for the value of manufacturing output in an area to increase while employment in that sector falls.

This would imply that productivity is increasing, and increasing productivity is seen as of vital importance to

maintaining the international competitiveness of the UK’s manufacturing industry. Innovation and enhanced

efficiency will often both increase output and reduce the need for staff. In contrast service industries are less

amenable to labour saving efficiency, which is why service sector employment has grown over time.

It is worth drawing attention to the fact that the forecast increase in employment of 40,500 is very similar to

41,300 baseline forecast for employment growth 2006-26 for the PUSH area set out in refreshed PUSH

Economic Strategy published in 20101. However, that strategy increased the overall target for employment

growth to 51,200 for the same period 2006-26. It may seem surprising that the baseline forecast of

employment growth has not changed significantly, but a common feature of many long term forecasting

1 PUSH Preferred Growth Strategy, June 2010, Figure 5


Page | 5

models is that, when recession hits, they forecast a swift recovery (when it comes) to former levels of

employment and then a continuation of long term trend rates of growth, until labour supply constraints kick

in.

The broad sectoral pattern of employment growth set out in the new forecasts above is also similar to that

presented in the 2010 PUSH Economic Strategy report, though the sectoral definitions have undergone some

change. Figure 3 reproduces a chart from the PUSH Preferred Growth Strategy Report, June 2010, which

shows the anticipated sectoral pattern of employment growth over the period 2006-26. Business services

account for the great majority of employment growth, with wholesale and retail contributing to growth along

with health and social work (mainly health sector employment).

Figure 3: Employment by Broad Sector in the PUSH Area, 2006-26

Source: PUSH Preferred Growth Strategy Report, DTZ, June 2010


Page | 6

The same PUSH report unpacks the major sources of anticipated employment growth in the business services

sector (see Figure 4). These are much the same services as now incorporated in the latest forecasts in the

Administrative and Support Services sector identified in the 2012 forecasts as the major source of new jobs in

the PUSH area between 2011 and 2026.

Figure 4: Business Services Sub-Sectoral Employment Growth

Source: PUSH Preferred Growth Strategy Report, DTZ, June 2010

For the purposes of this report, employment space requirements have been assessed on the basis of the

forecast increase in employment over the period 2011-26 of 40,500 jobs. The 2011 PUSH Economic Strategy

has not been revised downwards, so the target of 50,200 additional jobs over the period 2011-26 still stands.

However given that economic growth continues to be below the long term trend rate of growth, it seems

sensible for the purposes of this study to analyse the implications associated with the baseline forecast of job

growth.

Future Employment Floorspace Requirements

This section of the report essentially replicates the methodology for assessing future employment floorspace

requirements as set out in the DTZ report prepared for PUSH ‘Employment Sites and Premises Demand and

Supply Analysis’ dated October 2010. The methodology follows good practice in the preparation of

Employment Land Reviews, as set out in ‘Employment Land Reviews: Guidance Note’ published by ODPM in

December 2004, but incorporates the refinements to the methodology agreed with PUSH in connection with

the 2010 study.

Figure 5 outlines the approach used to calculate future floorspace requirements by use class, focusing on B1,

B2 and B8 floorspace. The approach entails making allowance:

for the forecast changes in employment by sector, to allow a larger workforce to be accommodated

for replacement of existing B class premises, to reflect the need to ensure older properties that are no

longer fit for purpose are replaced with new business space

for sufficient headroom above the requirement projected to ensure that developers have a choice of

sites in which they can invest and that occupiers have a choice of locations and premises


Page | 7

Figure 5: The Approach to Estimating Future Floorspace Requirements

Source: PUSH Employment Sites and Premises Demand and Supply Analysis, DTZ, October 2010

Accommodating Projected Employment Change

The first step in the approach set out in Figure 5 is set out in the previous section of this Appendix. It is the

figures for employment change by sector over the period 2006-26 that is the starting point of the quantitative

analysis.

The second step is to identify how many jobs will be accommodated in different sorts of premises

distinguished by use class. Wessex Economics has used, with some amendments the same Sector to Use Class

Conversion Matrix2 as used by DTZ in 2010 Employment Sites and Premises Study undertaken for PUSH. The

matrix used is presented in Annex 1.

The amendments made by Wessex Economics have entailed:

generating new lines in the matrix where the definition of sectors have changed between the studies

amending some of the DTZ assumptions where analysis of employment by sub-sector in Hampshire,

Portsmouth and Southampton leads us to believe that a different ratio should be applied

Figure 6 shows the estimates of the number of additional jobs that will require to be accommodated in office

(B1a), industrial (including B1b and B1c), and warehouse (B8 premises). Figures of the additional jobs to be

accommodated in premises in other use classes are also given for completeness, but these have not been

translated into floorspace assumptions.

It is important to note, however, that in recent years significant volumes of Sui Generis and D class used have

been developed in former industrial or trading estates and on new employment land developments.

Comparable figures from the 2010 DTZ study are presented to help identify changes in the estimate in

requirements since 2010.

The updated analysis presents a substantially different picture of future floorspace requirements to the

assessment made in 2010. In particular there is a very large reduction in the requirement for office B1 space

(from 540,000 sq m to 196,000 sq m), but a major increase in the requirement for warehousing space (B8)

from 50,000 to 248,000. The overall floorspace requirements across the PUSH have been reduced by some

146,000 sq m.

2 Appendix A1 of Employment Sites and Premises Demand and Supply Analysis, DTZ for PUSH, October 2010


Page | 8

Figure 6: Office and Warehouse/Industrial Floorspace Requirement to Accommodate Job Growth in the

PUSH Sub-Region 2011-26


Given the scale of change between the 2010 forecasts and the 2013 forecasts of floorspace requirement using

essentially the same methodology it is important to seek to distil why there has been such a substantial shift

away from a requirement for office floorspace to warehousing space. The key changes that have affected the

outcome of this calculation are:

The overall level of anticipated job growth has been reduced from 53,000 to 40,600. However the

overall increase in jobs assumed to contribute to demand for B space has not fallen significantly, falling

from 20,500 jobs to 18,400. The reduction in forecast job growth is very largely associated with

reduction in demand for activities that do not require B class floorspace.

The requirement for office space has fallen because the projected growth in employment of activities

that would require office space have fallen by 65%; and because use of the most recent floorspace per

worker data shows that floorspace per worker has fallen by 20%, an indication that business is using

office space significantly more efficiently than in the past.

The anticipated growth of jobs in sectors that give rise to warehousing demand has increased

significantly from the 2010 data. Thus a much higher proportion (18%) of job growth in activities

requiring B space is now anticipated to be associated with jobs in warehousing space, compared to just

2% of such growth in the 2010 study.

At the same time use of the most up to data shows that on average more sq m are associated with each

worker in the warehousing sector than was assumed in the 2010. Therefore for every 100 additional

jobs in sectors generating demand for B8 space, 7,500 sq m are now generally required, where the 2010

estimates assumed that only 6,500 sq m would be required.


Page | 9

Lastly sectoral classification of employment has changed between the 2010 study and this study, and

this will have led to potentially significant revisions in the sector based forecasts; for a number of

important sectors it has been necessary to generate new assumptions about how employment is spread

across the use classes.

There are aspects of the methodology used here that could be debated, but the message that requirements

for warehousing space is increasing while demand for offices is languishing accords with current market

intelligence.

A major factor in the growth of demand for warehousing is the shift to on-line shopping which is bringing a

revolution in distribution channels with a requirement for additional warehouse accommodation. There is an

expectation that the value of on-line non-food consumer expenditure will shortly exceed that of in-store

expenditure. This trend would not have been picked up in the 2010 forecasts to their full extent, but can be

expected to be reflected in the more recent forecasts used for this study.

Allowance for Replacement and Choice The 2010 DTZ study in assessing the overall future requirements for employment space in the PUSH area not

only identified additional demand for employment space arising from employment growth; it also estimated

requirements for new employment space to replace outdated stock, and made an allowance to ensure that

developers and occupiers have a choice of possible sites and premises.

This study has not entailed updating the 2010 assessment, but the conclusions of the 2010 work are presented

below since an overall assessment of the requirement for employment land necessarily needs to consider

these factors. Figure 7 shows the mid-point of the range of floorspace deemed to be required to replace

floorspace that is not renewed on existing sites, and hence requires supply of additional land.

One caveat that should be borne in mind in assessing these figures is the evidence that where replacement is

required of offices, on the basis of the most up to date information only 80 sq m is required to house the same

number as people as would formerly have been accommodated in 100 sq m. In contrast on average 115 sq m

of B8 space will be required to accommodate the same number workers as previously.

An additional uplift of 10% was also applied in the 2010 to the total requirement for new floorspace to ensure

that occupiers have choice, in terms of location, the type of site and property; and to ensure that there is

sufficient capacity in the market to allow occupiers to move, and for turnover in stock. Figure 7 shows the

amount off additional floorspace to be provided to make provision for choice.

The full methodology adopted in arriving at these figures is set out in Sections 2.3 and 2.4, and in Appendix 1

of the report ‘Employment Sites and Premises Demand and Supply Analysis’ prepared by DTZ for PUSH, dated

October 2010, and accessible via the PUSH website.


Page | 10

Overall B Class Floorspace Requirements in the PUSH Area 2011-26

Figure 7 sets out the overall requirement for B class floorspace in the PUSH area over the period 2011-26. This

incorporates the revised estimates of the requirement for floorspace arising from anticipated job growth

2011-26, and the mid-points of previous estimates of the requirement for replacement of existing floorspace

on new sites. The total requirement is somewhat less than 1.4 million sq m. Roughly one third of the

floorspace required is for offices (B1a), one quarter for industrial space (B1b, B1b, B1c, B2), and 40% for

warehousing space (B8).

Figure 7: Overall B Class Floorspace Requirements in the PUSH Area 2011-26


Supply and Past Take Up of Employment Land

The overall requirement for employment land needs to be compared with the projected supply of

employment land to determine if there is an adequate provision across the PUSH area of employment sites.

This part of the Appendix summarises the findings of the DTZ report prepared in 2010 for PUSH entitled

‘Employment Sites and Premises Demand and Supply Analysis’ regarding the supply of employment land and

floorspace. It also examines past development rates of employment space and outstanding consents and

allocated employment land. This allows an assessment of how important the allocation of land at Welborne

for employment purposes is to the overall PUSH Economic Strategy in terms of the quantitative provision of

sites and premises.

Figure 8 presents the key findings of the DTZ analysis. The analysis was undertaken for the period 2006-26. In

order to estimate the scale of land and potential floorspace still available for development in the period 2011-

26, floorspace completed in the period 2006-11 has been deducted; and the windfall supply figure reduced by

25% to allow for the passage of 5 years.


Page | 11

Figure 8: Floorspace Capacity on Identified Sites plus Windfall 2011-26


The overall capacity for development of employment floorspace on identified sites in the PUSH area amounts

to over 2 million sq m of space. The overall floorspace requirement (including allowance for replacement

giving rise to new demand and an allowance for choice and churn), does not exceed 1.4 million sq m. Overall

capacity for employment floorspace development exceeds requirements by over 40%.

In this context the draft Welborne Plan proposal to provide 78,650 sq m of employment floorspace represents

just 3.8% of the overall supply of employment space that could be developed on identified sites and sites

arising through windfall development.

The implication is that in purely quantitative terms a reduction or an increase in the amount of employment

land provided at Welborne would not be strategically significant for the economy of the PUSH area.

Annex 1: Sector to Use Class Conversion Matrix

Page | 1

The Welborne Employment Strategy Appendix 4 Employment Land Trajectory

Submitted to Fareham Borough Council October 2013 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 M: 07881 348 244 E: [email protected]




Page | 2

About this Appendix

This Appendix develops an indicative trajectory for the development of employment floorspace at

Welborne. Linked to this is a trajectory for the build-up of employment associated with the development

of offices, industrial and warehousing properties.

Planned Provision of Employment Floorspace

Section 8 of the main report sets out the anticipated quantum of employment floorspace to be provided at

Welborne and associated areas of land. In summary the recommendations for provision of employment

floorspace are as follows.

Development of up to 24,000 sq m (net internal area) of office space on 3 ha of land clustered

around the proposed location of the District Centre

Development of up to 33,250 sq m of B1c (clean tech) and B2 (industrial) floorspace on 7 ha of land,

located to the north of the M27, with the bulk of the land allocation to the west of the A32 Wickham

Road

Development of up to 40,000 sq m (gross external area) of B8 warehousing floorspace on 10 ha of

land, located to the north of the M27, with the bulk of the land allocation to the west of the A32

Wickham Road

The plan therefore anticipates provision of a total of 97,250 sq m (based on GIA for offices and B1c/B2

floorspace and B1 gross external floorspace). It is estimated that there is around 13,860 sq m of existing

employment floorspace on the site which will be lost of the development period. Thus the net additional

provision of employment floorspace amounts to 83,390 sq m of floorspace.

Assumptions for the Employment Floorspace Trajectory

It has been assumed that little new employment floorspace will be developed before 2022, based on the

assumption that occupiers are unlikely to commit to taking floorspace until the works required to make

Junction 10 on the M27 an ‘all moves’ junction are completed. This is currently not expected before 2020.

It has been assumed that it is only once the junction is complete that the site can be seriously marketed,

and planning applications submitted.

On the basis of the above assumption, significant volumes of completions only start in 2022, though the

trajectory does allow for some small scale development over 2018-2021 which is not dependent on delivery

of an ‘all moves’ Junction 10 and which could be accessed from the existing network. The most likely focus

for development would be around Dean Farm or off Pook Lane on land identified in the Master Plan for

employment purposes. The bulk of the floorspace provision has been modelled over the 19 year period

2022-2040.


Page | 3

The ambition is to develop out the entirety of the employment space allocated by 2040, by which time the

residential development is anticipated to be completed. There is no reason to expect that employment

floorspace will be built out at the same rate as new homes, given that the demand and supply

characteristics of the two markets are so different. Allowance has been made for the likely quantum of

floorspace that be delivered in any year, and for the cyclical nature of the market. But forecasting over the

25 years into the future is subject to high levels of uncertainty.

The expectation is that in the earlier years of development from 2022, development will be biased to

development of B1c/B2 space and B8 space; though most of this period is more than a decade away, the

current position in South Hampshire is that there is a very large amount of land allocated for B1 uses, and a

huge volume of outstanding permissions (see Appendix 1 for details). This means that the requirements of

the sub-region for B1 (predominantly B1a uses) is well provided for over many years to come.

In contrast levels of development of B8 and B2 schemes have been much lower in the region in the past,

and the volume of outstanding permissions and allocated land for such schemes is much less than for B1

uses. The comparatively low level of development in recent years is likely to be an indicator of the need in

due course for significant renewal of outdated stock of warehouse and industrial premises, and the need

for new development suited to the requirements of the day. It is likely that when the need for replacement

premises emerges, this will be associated with significant changes in locational preferences within the sub-

region, not least to allow efficient movement of commercial vehicles and staff.

It is these considerations that have informed the development of the trajectory. However, to endeavour to

forecast the pattern and volume of commercial development 10 years hence in 2023 is fraught with

difficulty, let alone the requirement to forecast take up through to 2040, 27 years in the future. One

wonders whether forecasts made in 1986 accurately foresaw the pattern of demand for commercial

premises in 2013!

What has been built into the trajectory, however, is the near certainty that there will be a significant

downturn in the property market before 2040. The UK economy and the property market has always

followed a cyclical pattern, with downturns every 12 to 20 years. For the purposes of illustration the next

downturn in the commercial property market is shown as arising in 2031-2032, some 18-19 years into the

future.

Figure 1 shows the overall trajectory as graph, while Annex 1 presents the actual figures. It should be noted

that the 13,860 sq m of floorspace that already exists on the site is assumed to be demolished between

2027 and 2029, and has been netted off the total floorspace delivered.


Page | 4

Figure 1: Net Employment Floorspace in sq m Completed at Welborne 2018-2040

Comparison with Historic Rates of Floorspace Completions

Figure 2 shows the overall quantum of floorspace delivered year by year since 2000 across the whole of the

Core PUSH area, and Figure 3 shows the variability in floorspace completions year by year since the year

2000. It is particularly apparent from Figure 3 how the development of office floorspace has dominated

new supply of B class buildings. Figure 2 shows how B1 class space has accounted for 83% of all new

floorspace provision in the past. The lack of renewals and replacement of B2 and B8 space over the past 13

years is one reason why there is an expectation that there will be a requirement for relatively more B1c, B2

and B8 space in coming years, and why a significant indicative allocation has been made for provision of

such space at Welborne.


Page | 5

Figure 2: Employment Floorspace Developed in the Core PUSH area 2000 to 2012-13, Sq m

B1 B1A B2 B8 TOTAL

2000 49,995 9,651 9,352 2,503 71,501

2001 36,408 16,603 16,962 2,218 72,191

2002 22,244 21,528 1,656 4,826 50,254

2003 19,398 5,351 8,076 5,191 38,016

FY 2004-05 79,128 15,380 5,414 11,338 111,260

FY 2005-06 12,971 13,332 244 1,499 28,046

FY 2006-07 42,008 11,504 460 20,486 74,458

FY 2007-08 26,016 27,240 3,907 332 57,495

FY 2008-09 37,883 17,012 0 1,492 56,387

FY 2009-10 6,942 12,777 0 453 20,172

FY 2010-11 28,112 7,802 2,526 4,409 42,849

FY 2011-12 7,714 2,488 340 2,505 13,047

FY 2012-13 11,612 6,022 1,128 1,054 19,816

Total 380,431 166,690 50,065 58,306 655,492

Average per year (2000-2012/13) 29,264 12,822 3,851 4,485 50,422


Figure 3: Employment Floorspace Developed in the Core PUSH area, 2000-2012/13, Sq m



Page | 6

It is helpful to compare the average annual rates of completions by B use class category over the period

2022-2040 with the average annual rates of completions across the Core PUSH area over the 13 years

2000-2013. Figure 4 shows that, were annual completions across the Core PUSH area continue at the same

average level pa through to 2040, planned provision 2022-40 at Welborne would account for:

Just 3% of B1a and B1b completions across the Core PUSH area 2022-40

Around a fifth (22%) of B1c and B2 completions across the Core PUSH area 2022-40

Almost half (46%) of B8 completions across the Core PUSH area 2022-40

In setting out these comparisons it should be noted that the assumption has been made that 10% of all B1

completions in the Core PUSH area between 2000 and 2013 have been for B1c properties.

Figure 4: Comparison of Delivery Rates 2000-13 in the Core PUSH Area and Forecast Delivery Rates at

Welborne 2022-40

This analysis of course assumes that the pattern of property provision in the period 2022-2040 will mirror

that of the 13 year period 2000-13. It is in fact unlikely that this will be the case, because of changes to

patterns of sectoral growth, changing patterns of distribution (eg the move to distribution networks based

on on-line sales), and other changes in occupier requirements.

It is very hard to forecast the nature of the property market 10 years hence, let alone 20 years hence (in

2033), but Wessex Economics anticipates that there will be an increasing requirement in future years for

the re-provision of warehouse and industrial space (of which there has been relatively little over the period

2000-13). This will produce something of a swing away from office provision (of which there has been a

great deal over the period 2000-13) to industrial and warehouse properties, though as noted elsewhere it is

anticipated that the use classes become increasingly blurred with the development of multifunctional

buildings.

The implication of the analysis above is that Welborne is a strategic employment site in the context of the

PUSH area post 2022 for all forms of non-office based employment uses.

Page | 7

Annex 1 a) Welborne Employment Floorspace Completions by Year 2018-2040

Annex 1 b) Welborne Jobs Associated with Employment Floorspace Completions by Year 2018-2040

the welborne employment strategy - fareham...region in the medium to long term future, providing...

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