Download Annex to Appendix 5 GLA Regeneration Request for funding

Annex to Appendix 5
GLA Regeneration Request for funding contribution to ‘Follow on Space in Industrial Areas’
28 January 2015
Background
Building on completed work on Accommodating Growth in Town centres, Accelerators and Coworking spaces and Artist Workspace Research and working alongside the GLA led Industrial Land
Baseline refresh for London we would like to request a contribution to a proposal to strengthen
growth for SME’s on industrial land and brownfield sites with a particular focus on follow-on
space.
The research will help to deliver Priority 2 Small and Medium Sized Enterprises of the LEP Jobs
and Growth Plan. In line with the workspace strand of interrelated topics it will examine the
changing requirements for workspace provision in industrial areas, for example responding to
demand for move-on space and the role employment led regeneration can play to support growth in
these areas.
By factoring the needs of SMEs into the research it will address comments made at the SME
Working Group on 4 April 14 and in subsequent meetings highlighting the importance of
identifying the need and addressing subsequent provision for follow-on space for companies outgrowing
incubators, and protecting the availability of workspace for SMEs in light of changes to planning policy.
The work will also support the recently published Outer London Commission’s third report
setting out suggestions for how to support London’s ‘trading estates’ (Key Issue 5) , support
London Plan policy and be in line with recommendations from the London Office Policy Review
2012 on hybrid office-industrial workspace1.
By co-commissioning the work with the Planning Team it will address comment made at the SME
Working Group on 20 June 14 that the GLA Planning Team should be engaged to ensure that
planning requirements are taken into account when developing any initiatives.
Research Summary
Incubators, co-working spaces, artist, hacker and maker spaces provide cost-effective shared space
for small businesses to form and grow in inner London areas but there appears to be a particular
shortage of units to move onto, which can mean talented firms having to leave London. A key need
appears to be around the affordable end of hybrid workspace options where desk based space is
combined with more flexible shed space to test, store and make things and increasingly shared
facilities.
Whilst good quality workspace is available across London provided by the private sector in more
central locations e.g. around Tech City and there is a notable increase in flexible co-working
facilities at affordable prices, we have found anecdotal evidence that in Outer London areas like
Harrow, Hayes, Brentford (Golden Mile), Park Royal, Tottenham Hale or Barking there is demand
for employment led regeneration to create affordable workspace in particular for follow-on space in
industrial areas. These areas are often ‘at capacity’ or development on the short to medium term is
constrained by existing uses or mixed use proposals.
There is a need to understand the potential of employment-led regeneration of protected or
unprotected industrial or post-industrial chunks of land of varying sizes using intensification and
diversification as tools. There is more and more support for start-up space but no debate about what
happens to those companies that graduate from it. Where do they go, what do they need? Does the
traditional property market model serve them? Public sector authorities and developers need to
Refer Chapter 9 - http://www.london.gov.uk/priorities/planning/research-reports/technical-and-researchreports/london-office-policy-reviews
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better understand how to create the right kind of environment for these businesses and how to
structure the right deals. There is a presumed market failure in terms of ‘information imperfection’
which needs to be evidenced but can be described as a lack of understanding of the economic value of
providing follow-on space as opposed to single user large speculative sheds that are very sought
after as they need large pieces of land. As there is demand for both but only limited land available
the more secure and risk adverse single shed developments often prevail and many share the view
that SME’s need to find their own spaces when they grow and that supply outweighs demand.
Anecdotal evidence suggests the opposite is happening, there are not enough units in particular in
West London’s industrial land, which has low vacancy rates and a pipeline of release that exceeds
London Plan benchmarks.2
Also, ‘Shed’ typologies have negative connotations as places for dirty and noisy industry. They are
seen as unattractive and unable to relate to increasing urbanisation around pockets of industry.
Innovative design solutions are required to make these appealing to small businesses and there are
good examples around like the Blackhorse Workshop project3 in Waltham Forest. At the same time
there are plenty of cleared post-industrial sites, some of which owned by the Mayor that have been
sitting empty for years awaiting to right market conditions for development.
Perhaps there is a model for shorter lifespan workspace (say 5-10 years), efficiently built, even
demountable and reusable that could bring a return to landowners as well as create jobs. The market
view is often that there is no cost efficient model to build new to create affordable workspace in
particular for artists and also that modular construction often does not stack up financially as the
up-front costs are too high. We would like to challenge this view and test the market and creativity
of London’s design and construction community by targeting appropriate localities defined through
an initial research stage.
There would be great benefits in terms of visibility of Mayor and LEP actively supporting the
discussion around how to help create much needed capacity in terms of follow-on space and help
employment areas prosper.
Methodology
We propose a staged process to firstly define requirements and the case for provision of follow-on
workspace in employment areas followed by outline design development of key types.
1. Identify different types of opportunities in industrial areas to accommodate follow on space by
understanding capacity, rental values (i.e. defining what affordability means) and other costs as well
as spatial and quality requirements and constraints. Investigate locations in terms of access to
facilities, public transport, roads and main market areas. Define spatial and economic requirements
for different sectors for small business workspace, in particular for clustering of workspace and
follow-on space.
2. Once a business case/feasibility is agreed the team should develop 2-4 outline designs which could
cover new built ‘shed’ style light industrial developments as well as modular systems for the
conversion of other types of existing space.
3. Post-completion of the study - GLA officers will work with the media partner and the stakeholder
group to identify private sector partners to implement the prototypes.
Procurement and Steering
All three stages would be commissioned through a competitive process. The team should include
capacity to test the viability, develop a business case and provide innovative and cost effective design
solutions. The LEP SME subgroup would be consulted on suitable candidates. The team would be
procured competitively by an exercise with a media partner (to be chosen up front).
2
3
PBA research for Park Royal ELR draft Jan 2015
http://www.blackhorseworkshop.co.uk/
As a reflection of the interdisciplinary nature of this work the project will be led by the GLA
Regeneration team working with EBPU and the Strategic Planning team. The steering group will
draw in content leads on specific topic such as industrial land, work space, SMEs and the FALP. A
dedicated reference group will present an opportunity for the media partner, LEP, Open
Workspaces Group, Industrial BID group and Mayor of London reps to be represented alongside
developers and industry experts.