Download Does Coventry still play second fiddle to Birmingham, or does

MIDLANDS ENGINE COVENTRY CITY TALKS
Growing
pains
NICK BUTTON,
BAND HATTON BUTTON
Does Coventry still play second fiddle to Birmingham,
or does confidence in its growth potential mean the
city has moved on? Lisa Pilkington listens in at EG’s
first Coventry City Talks event
C
oventry needs to be confident
about its growth potential and
stop looking over its shoulder at
Birmingham, according to the
expert panel at EG’s first ever
Coventry City Talks event.
A robust discussion took
place at Coventry’s Ricoh
Arena around the topics of devolution,
development and investment in the
city, with James Brookes, associate
partner at Bromwich Hardy, setting the
tone within the first five minutes of the
debate. Brookes immediately asked
Martin Reeves – chief executive of the
fledgling West Midlands Combined
Authority, which was formed in June, and
Coventry City Council chief executive – if
devolution will actually help the city.
He said: “Will Coventry still struggle
and play second fiddle to Birmingham?
Coventry has been chasing the
development curve for as long as I can
remember. How will devolution help?”
Reeves was taken aback by the direct
questioning, but responded: “There
are clearly some challenges – there’s
massive development taking place in
and around Birmingham with HS2, and
Coventry is trying to develop its city
centre around Friargate, the railway
station and City Centre South, all in a
challenging market with investment
fragility. That is a problem. Are there
some issues out there about perception?
I think it’s more of a reflection of
Coventry being confident about its
growth potential while not looking over
its shoulder at Birmingham.”
He added: “For economic growth, we
need to get over the Birmingham issue
and say far from it being a liability and a
challenge, we’re less than half an hour
from the second city and an hour from
our only global city – what’s not to love?”
With each area of the Midlands
having its own fundamental differences
and issues, an understanding of how
devolution can work at scale is needed
to make it work. Reeves said that the
West Midlands Combined Authority
has worked on a model of economic
growth and impact that has “never been
produced before”.
“This gives us a sense economically
of the impact not just on GVA but also
economic uplift across the entire area.
We’re going in with our eyes wide open
to argue the case about not having a
disproportionate amount of funding
going into either place X or Y.”
But just how much traction does the
Midlands Engine brand have?
As the Midlands is geographically at
the centre of the UK, Reeves believed it
to be pivotal in balancing out the
economy between London and the North.
“The moniker is an artificial construct
and a government minister-led sense of
balance against the Northern
In association with
EDWARD SHAW
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www.estatesgazette.com
Autumn 2016
HENRY BELLFIELD,
BARBERRY
JAMES BROOKES,
BROMWICH HARDY
MARTIN REEVES,
WEST MIDLANDS
COMBINED AUTHORITY
DAVID ARMSTRONG,
WASPS
Autumn 2016
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39
“Unless we’re
ready and are
aware of the risks
and returns, then
we’re stuffed”
hopefully be regenerated back into family
housing too,” he said.
The obvious next area of investment in
Coventry is retail and leisure, and a longawaited announcement on a preferred
development partner for the council is
expected soon. Reeves confirmed the
local authority is in a procurement
process to secure a partner but could not
go into detail.
“There’s a lot going on. A city centre
should be a mix of residential, retail and
leisure, employment and digital meeting
with a café culture, which is not easy to
deliver. The original Jerde city centre
master plan eight years ago was
unrealistic and I said so at the time. This
is our one chance to get it right.”
Further along the development
pipeline is office development,
particularly at Friargate, where the
council has started the development with
a 100,000 sq ft prelet. Estates Gazette
reported a deal with the RICS in 2015, but
since then, no announcement has been
made as to the deal being concluded. EG
pressed Reeves on the matter and he
mentioned frustration in things taking
longer than anticipated, but said talks
are still “lively” for the RICS to take
space within a second building at the
scheme. No deal has yet signed.
Reeves confirmed that via the WMCA,
there is a process with opportunity to
leverage up to £150m as part of a city
deal to accelerate development across
Friargate and the city centre, which could
include further spec development of
offices and a hotel.
JOE TOTH/BPI/REX/SHUTTERSTOCK
Powerhouse. Scale is important.”
Reeves believed the most important
issue for Coventry and Warwickshire is
“making sense of our own identity and
our own proposition for growth”.
“Layer that into the West Midlands
and then into the Midlands Engine,
which is critical to the emerging new
government’s industrial strategy. If we
can get it right through a major swathe
of the UK, we can rebalance the heat
of the economy between London and
the South East with what I believe to be
an overinflated view of the Northern
Powerhouse.”
Panellists and guests were keen to
make the most of their opportunity to
question Reeves on various subjects,
including Brexit. He said that Brexit has
created uncertainty and some turbulence
in the investment sector and said there
was a “pause” in the market. Reeves
believed, however, that it also created
opportunities, with new investment and
new types of private equity and sovereign
funding, including pension funds wanting
to come into Coventry, Warwickshire and
the wider West Midlands area.
However, Reeves warned that Coventry
and Warwickshire needed to be ready
with “proper, investable opportunities”,
and added: “Unless we’re ready and are
aware of the risks and returns, then
we’re stuffed. We’re learning to be more
agile. Working at scale with Birmingham,
the Black Country and other areas across
the Midlands is more important postBrexit than ever.”
Bromwich Hardy’s Brookes added: “As
a result of Brexit, I think we’ll see more
investment from overseas into the UK
because of the exchange rate.”
A lot of investment has already gone
into student housing, with developer
Barberry being one of the major players.
With its £100m Bishop Gate development,
the scheme will bring 1,116 more
student beds into the city in 2018.
Barberry director Henry Bellfield said
the company is now looking for further
investment opportunities in Coventry.
“Coventry has a desperate shortage of
student accommodation. For the two
universities to effectively compete with
other cities for students, it needs quality
accommodation. There are currently
50,000 students here and only 4,000
purpose-built beds. There are schemes
coming through but there’s still a
massive undersupply. Around 25,000
students won’t be able to access
purpose-built space.”
Nick Button, head of commercial
property at law firm Band Hatton Button,
agreed with Bellfield that there needs to
be better provision of purpose-built
student housing in the city. “There’s a lot
of second-rate existing stock which will
WASPS TAKES STING OUT OF INVESTMENT
Wasps is a major inward investor into
Coventry with its acquisition of the
Ricoh Arena in 2014. The rugby team’s
chief executive and City Talks panellist
David Armstrong said the main reason
for coming to the city was the quality of
the Ricoh Arena and the opportunities it
represented.
“It was a difficult decision to move a
professional sports organisation out of
west London up here to Coventry and
hadn’t been done before, especially
mid-season. A lot of it was about the
long-term attractiveness of the region
for us. We looked at the 5.5m population
in terms of both sport and as a music
Autumn 2016
venue as well which is an extraordinarily
large catchment for us.”
Armstrong sees the club as
essentially a real estate business “with
a rugby bit stuck on”. He says: ”We see a
significant opportunity in the immediate
area around us and want up to two
further hotels and more retail space on
site. We’ll spend another £100m-£120m
here in Coventry. Coventry is massively
undersupplied in terms of hotels. We
want to be the pre-eminent music venue
for the Midlands and we want people
to stay here. We’re the third largest
employer in the city and we’re looking
for long-term plays.”
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