PARKING LEVY PROMPTS FIRMS TO CONSIDER NEW LOCATIONS


May 30, 2012

Office News

Evidence is emerging that some businesses are considering locating outside Nottingham City Centre as a result of the introduction of the City’s Workplace Parking Levy, according to the Midlands property consultancy FHP.

It says that some companies who are currently looking at moving are examining options outside the zone covered by the levy, which was introduced in April partly to help pay for the extension of Nottingham’s tram network with two new lines to Clifton and Chilwell.  James Hartley, of FHP’s office and industrial team, says that though the City Centre retains significant appeal for certain occupiers, some small to medium-sized companies for whom a central location is not crucial are now looking at locations like West Bridgford, Wilford and Ruddington.

James Hartley commented:

“No business likes additional costs, and the unfortunate fact is that though the WPL was planned sometime ago it has come into force at the worst possible moment.  Trading conditions remain extremely tough, businesses have been struggling with rising raw material prices and economic confidence is low.  The last thing they want is an additional cost and a change in location is one way to avoid it.

We shouldn’t lose sight of the fact that the City Centre remains a very attractive location for all sorts of reasons, including, of course, its good transport links, and some businesses are in a position to grin and bear the levy.  However, there has been a clear trend in some recent inquiries that FHP has been handling for occupiers to ask about locations outside the City in places where rents are lower and there is no levy to pay.”

In the past few months, FHP has handled a number of inquiries where occupiers who could have taken space in the City have instead decided to move to locations like Bournston Development’s striking The Point office complex in West Bridgford and The Apex Business Park in Wilford.

James Hartley said:

“Since April, we have seen a surge of deals in locations outside the City.  At The Point in West Bridgford we have seen approximately 11,000 sq ft of office transactions complete, with one of the occupiers moving from Castle Marina where they would have been facing an occupation cost increase in the region of £10,000-£15,000 a year, a figure which is set to increase annually.

We are seeing this trend repeated in a number of offices we market.  At Apex Business Park in Wilford we have 9,330 sq ft and 3,700 sq ft of space on Wheatcroft Business Park ‘under offer’ both to occupiers moving out of the City Centre.  You can also look at schemes such as Bradmore Business Park in Bunny where there is strong interest in two of the units. This scheme has been completed but empty for a number of years and is now starting to see interest increase.”

Hartley says that the appeal of these sites goes beyond their position outside the WPL zone.  He believes the widening of the A46 and the prospect of major improvement to the A453 is making high-quality out-of-city locations more viable, with the strength of the retail and leisure offer in places like West Bridgford providing attractive support facilities.

He added:

“I don’t believe that the WPL will prevent major occupiers from moving into Nottingham provided all the other key criteria they look at are satisfied. The City’s economy has distinctive strengths which will always stand it in good stead and, WPL aside, I think businesses are broadly supportive of the tram.

That said, the evidence I have seen in the last few months tells me that some SME businesses who are looking at expanding or relocating feel that the WPL may be one cost too many in the current economic climate.  Some are specifically asking us to prioritise options outside the WPL zone.  Fortunately, we have been able to demonstrate that there are some very strong alternatives available to them which offer the kind of business environment they are happy with at more cost-effective levels.”

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