Bobbins? Will Stockport Succeed In Turning A Not Spot To A Hot Spot?
Stockport will be the UK's first Mayoral Development Corporation as Metro Mayor Andy Burnham uses his planning powers.
Will it be a game changer for Stockport, where city living has failed to take off and which is regarded with neutrality (at best) by many Greater Manchester office market observers?
Or is this the birth of a south-of-connurbation powerhouse, turning Stockport into the Croydon of the North?
On Friday 11 January, the transformation of Stockport town centre stepped up to the next level. Or so said Stockport council and Greater Manchester Mayor Andy Burnham, who together with the Greater Manchester Combined Authority, took advantage of their regular Friday meeting to approve the creation of a new Mayoral Development Corporation, the UK's first, to lead the regeneration of the Town Centre West area (see explainer below on what a Mayoral Development Corporation is and does).
Their ambition is for Town Centre West to become Greater Manchester’s newest, greenest and coolest affordable urban neighbourhood, one that is ideally placed to meet the challenges and opportunities that the UK's town centres face.
Official reports reveal that a modest budget of £500K, and special site assembly powers, will be granted by government order in autumn 2019. About 3,000 new homes are promised, but the real significance of the move may be less about dwellings completed, and more about the message it sends. The new corporation is the first test of a new model of urban regeneration.
Stockport council admits that the extra punch packed by the new corporation will be invaluable.
"The corporation adds power," Stockport Council Leader Alex Ganotis told Bisnow. "This part of the town centre has been difficult to move forward, it has fragmented land ownership, and despite years of trying we have not yet managed to crack it. Simply, the corporation makes things quicker and simpler, it is streamlined."
Those involved in new residential development welcome the move: Altrincham-based Urbanize is proposing a 22-storey tower, Stockport's tallest, on a car park site at Piccadilly, Stockport.
Those with a close interest in the Urbanize scheme said the corporation's timing is good and are enthusiastic about Stockport's prospects.
“Towns around the periphery of Manchester city centre, including Stockport, will attract more attention — and investment — as the city continues to grow," JMW Solicitors partner Thomas Pearson said. "Stockport is home to a lot of wealth, yet that isn’t reflected in the town, which has, over time, been neglected.
"During our most recent visit to Asia, Stockport was definitely on investors’ ‘hot list’ as an area where they feel they can acquire stock. Indeed, Q4 2018 saw Stockport leapfrog Manchester in the LendInvest Buy-to-Let index.
“In terms of residential projects in Stockport, there are several exciting, large-scale schemes in the pipeline, but the question is how quickly they’ll sell in comparison to those in Manchester city centre," he said.
Does this have implications for the Stockport office market, which is also showing signs of renaissance? You bet.
“Offices and residential property go hand in hand, so an increase in resi development will no doubt have a knock-on effect, with plenty of opportunity for new office development," Pearson said.
Stockport is seeing its first serious speculative office development. Muse Developments, in partnership with the borough council, are now at work on the 60K SF second office phase at Stockport Exchange.
Two Stockport Exchange is anticipated to complete in February 2020. Once complete, the wider Stockport Exchange development will deliver up to 375K SF of office space.
“This development will further reinforce Stockport Exchange as South Manchester’s new leading business location and we’re looking forward to seeing construction progress over the coming months," Muse Joint Managing Director Matt Crompton said.
Cheshire-based Orbit, the dominant landlords in Stockport's second-hand and refurbished market, is cheering them on. Even so, it warned that Stockport's ambitions should be set at a realistic level: this will always be a location for cost-sensitive occupiers, it said.
Orbit has 350K SF of office floorspace in the town centre, with another 500K SF across 33 buildings in Stockport’s suburbs.
The pace of lettings has quickened markedly over the last three years, rising from a modest 20K SF take-up a year to 70K to 80K/SF, thanks to a programme of refurbishment and rethinking. Large chunks of vacant space have vanished and the mood is can-do.
“The biggest issue for Stockport offices is perception among locals," Orbit Leasing Director Rhys Owen said. "The message has got out to businesses beyond the city-region that Stockport really works, it ticks all the boxes and it’s a lot less expensive than Manchester city centre. But the local perception isn’t so good — the message just hasn’t got out.
“We need to get business and residents from the outer parts of the borough, we need that very affluent demographic, to see that Stockport can provide them with offices cheaper than Manchester.”
Rents in Stockport are not stellar: £12 to £13/SF is good, a substantial discount on nearby rivals like Altrincham, but comparable with Old Trafford, an area with a very similar appeal. Owen said he doubted the Muse scheme scores very much higher on rents, its principal aim being to show the town can be a viable office location rather than to set new rental records. Council leader Ganotis agreed with that sentiment.
Owen said success in the Stockport market should, therefore, not be measured in rents but in void rates.
“Today our portfolio is down to 30K SF, or about 10%. Eight years ago it was 200K SF and you can do the maths yourself and see the market has moved a long way,” he said.
"Historically the Stockport office market has suffered from an oversupply of poor quality office accommodation together with an acute lack of demand," MBRE Director Michael Blackshaw said. "However, over the last 24 months, the market has been through a process of rebalancing with a high volume of the poorer 1970s and 1980s office accommodation being converted to residential."
MBRE is a boutique agency specialising in the south Manchester office market, and its diagnosis is that more Grade A floorspace is necessary to lift the market.
"Whilst there have been vast improvements in town centre accommodation and the night-time economy, until these office quality aspects are addressed properly, the town will struggle to bridge the office demand gap," Blackshaw said.
Stockport is on a journey, with both its office and residential markets well placed for growth. Whether Stockport's tired image can be refurbished too is, however, much less certain.
What Is a Mayoral Development Corporation?
A Mayoral Development Corporation is an independent statutory organisation created to bring forward the regeneration of a defined area. They have powers to acquire, develop, hold and dispose of land and property. They also have powers to facilitate the provision of infrastructure.
The proposed establishment of Greater Manchester’s first-ever Mayoral Development Corporation will cover 130 acres of brownfield land in the heart of Stockport. The MDC would help accelerate the transformation of this area in the west of the town centre, creating a new urban village of up to 3,000 homes.
This will be done in partnership with Greater Manchester Combined Authority as part of the Mayor’s Town Centre Challenge commitment to regenerating town centres across Greater Manchester. The Council is working on how the MDC can help drive forward their Town Centre West development by resolving barriers to site development and unlocking financing for schemes, as well as providing a sustainable framework within which the development could be progressed.