Thames Tap’s anonymous Secret Agent was unimpressed by Cllr John Izett’s piece in Thames Tap, which was itself a response to our agent’s view on the office market in Basingstoke. Now the Secret Agent has returned to say changes in Basingstoke and Deane Borough Council’s (B&DBC) policies are needed to attract major occupiers.
Anyone who read the Secret Agent article about the dysfunctionality of the Basingstoke market would have, at once, realised that the correspondent was referring to the office market and not making general reference to every development class with which B&DBC might seek to claim some involvement.
They would therefore have been somewhat surprised and possibly confused by the defence of the council’s record proffered by Cllr John Izett, deputy leader and cabinet member for finance and property, who rambled through a list of ‘achievements’, many of which have no bearing on the office market in the town at all.
Cllr Izett did refer to The Florence Building, the only new speculative office development seen in the town for 15 years and which is likely to remain the only new speculative office development for the next 15 years given the council’s unwillingness to release freehold sites for office development, particularly given their failure to secure funding or developer interest for either of the two 40,000 sq ft office schemes for which they have granted themselves planning consent.
This is not, as is naively opined by Cllr Izett, due to the ‘safety in numbers’ herd instinct of participants in the property industry but due to the highly restrictive ‘Soviet-style’ policies operated by the council to control the ownership of sites in the borough which effectively sterilises the commercial appetite of developers to undertake further office development in the town.
Cllr Izett believes that developers will return once the current downturn resulting from Covid comes and the recession, into which we are now headed, to an end. What he doesn’t appear to appreciate is that there has been a structural shift in demand and it is therefore likely he will be waiting a long time!
The council have failed on numerous occasions to secure pre-lettings through an inability to secure planning in a timely fashion for buildings matching the requirements of potential occupiers who, as a result, have been forced to take secondhand, lower specified space, given the extremely limited supply or to take accommodation out of borough.
There remain several occupiers whose stated preference is to remain in the town but who are likely to be forced to follow suit and take space elsewhere, risking the jobs and livelihoods of residents.
Prompted by the growth in home shopping, the logistics market over the past several years, particularly since the pandemic, has become the favoured asset class of the property industry and the council can therefore claim little credit for having released land to be developed for large scale distribution units in the area.
Similarly, Village Hotels embarked on an aggressive expansion drive several years ago and Basingstoke was an identified location on their M3 shopping list to add to other hotels the operator had already developed at Farnborough and Southampton.
It is therefore through no skill or foresight of the council that a deal was secured with them to take one of the prime sites on Basing View for a new hotel.
Despite the global pandemic, other towns throughout the region, including Reading, Windsor, Maidenhead, Woking, Guildford, Farnborough and even Slough, have all succeeded in attracting major new ‘incomers’ (many having taken pre-lets) to their towns thereby stimulating rental growth and further investment and creating new employment opportunities for residents.
By contrast, Basingstoke & Deane Borough Council have been happy to stick rigidly to their outdated policies and stand idly by as curators of a declining quality office stock which witnessed only 20,000 sq ft of space let in the first quarter of 2022 and resulting in a significant reduction in achievable rents, together with witnessing a further downgrading of the town in the hierarchy of towns in the region.
B&DBC’s main claim to fame is that it has presided over a town that is now at the bottom of the achievable rents league table across the entire South East region. Even The Florence Building, only succeeded in achieving a rent in the ‘low £20s per sq ft’ rather than the mid to late £30s per sq ft, which many buildings in competing locations have achieved.
The recent collapse of the council’s development agreement with Muse Developments who were the council’s selected development partner, appointed to wide acclaim, sounded the death knell for any immediate prospect of any further new office development in the town, leaving Basingstoke seemingly preferring to ‘making do’ with refurbs of 1970s buildings which, although ticking the environmental box, will do little to appeal to office occupiers seeking state of the art space, particularly given the restrictions imposed by the existing building structure.
Rather than grandstanding, it would be more commendable if Cllr Izett could convince his fellow council members to adopt a more enlightened and commercial approach, thereby initiating a renaissance in the fortunes of Basingstoke’s office market and benefitting not only residents, but also the other landlords in the town, the value of whose assets are, by association, negatively impacted by the council’s outdated policies. It appears to be a case of ‘same old people, same old policies, same old Conservatives’.
Opinions in this column are those of individual contributors and not those of UK Property Forums. If you are involved in the property world and wish to contribute an anonymous article, contact Alan Bunce at alan@ukpropertyforums.com.
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