MAIDSTONE’S CORE STRATEGY: SELECTING THE RIGHT LOCATIONS ...

J8MAIDSTONE’S CORE STRATEGY:SELECTING THE RIGHT LOCATIONS FOR ECONOMIC GROWTHQUESTIONS AND ANSWERS

Gallagher has land interests in Maidstone and has been researching the distribution centre market.

During this process, Gallagher has consulted with industry experts including AshtonSmith (architects who work for Sainsbury and Tesco), Lambert Smith Hampton (agents specialising in distribution) and Gazeley (developers specialising in distribution).

This document has been produced, with their input, to inform and assist the debate on employment land at M20 Junction 8.

The office element of an existing UK distribution centre

What is proposed at Junction 8?Q1 The site has a gross area of 17 hectares (around 40 acres) and can deliver:

59,000 m » 2 (635,000 sq ft) of employment development8, suitable for logistics companies, creating many hundreds (possibly thousands) of jobs, within a high quality landscaped and screened setting.

The first section of the South East Maidstone »Strategic Link (Leeds-Langley bypass)

The scheme represents a £60 million investment into Maidstone’s economy.

8 A range of building types and sizes could be provided.

Is there a need for the development?Q2 Yes. The Core Strategy process has revealed a clear need for significant additional areas of non-office and non-retail employment land in and around Maidstone.

The latest Annual Monitoring Report shows that there was a net loss of employment floorspace in 2009/10. Of the employment floorspace allocated in the Maidstone Local Plan, only 3.5ha remains available. There is no land available for B8 use.

Maidstone must make a decision about whether it wants to attract investment in high quality logistics developments. To attract such investment the right kind of land must be made available for that use in the right location.

“to attract investment, the right kind of land must be made available in the right location”

Google Earth image showing the site location

How many jobs would be created?Q3 High quality logistics facilities produce a range of jobs covering a range of skills.

“Traditional” distribution centres generate 130 to 150 jobs per 100,000 sq ft of floorspace, which would mean 800+ jobs at J82. For example, the 580,000 sq ft Tesco distribution centre at Dagenham will create 1,200 jobs3.

“Dot.com” distribution centres create far more jobs per square foot. For example, the 120,000 sq ft Tesco.com facility at Priory Park, Aylesford produces approximately 500 jobs in the first year4, with this figure rising in later years. Around 75 of these jobs are in management, administration, IT or HR positions. A further 200 work in the ‘picking’ process (including supervisors) and there are up to 225 drivers.

As well as the jobs created within the site, there will also be indirect job creation and benefits for the rest of Maidstone’s economy.

Does Maidstone need these jobs?Q4 Yes. We need the whole range of jobs spanning the highest level ‘white collar’ jobs (top management, managerial, accountancy, IT, HR etc) to the ‘blue collar’ jobs such as drivers and ‘pickers’.

The range of jobs offered by the distribution, logistics and assembly industries reflects the job market and the people whose jobs are being lost.

New investment of the type described also stimulates wider investment and economic vibrancy.

A clean, modern distribution facility

2 This estimate is supported by reliable independent survey data and employment density calculations used by local authorities including Kent County Council, who recognise a figure of 1 employee per 750 sq ft (70 m2) of B8 warehousing floorspace

3 A ratio of 1 employee per 480 sq ft (44 m2)

4 A ratio of 1 employee per 240 sq ft (22 m2)

A wide range of jobs are available in a modern distribution centre

Myth #1: Distribution jobs are poor quality jobs.

The nature of jobs in the distribution sector has been changing over the last decade, and the sector now offers a wider range of opportunities. Such jobs are ‘clean’ in nature, safe, and come with a wide range of benefits.

In addition to the semi-skilled jobs, a wide range of other opportunities are likely to emerge.

Depending on the occupier, a typical warehouse has the potential to create opportunities for a wide range of skill levels including:

sales »

personal service »

skilled trades »

administration »

associate professionals »

professionals and managers »

EMPLOYMENT IN THE DISTRIBUTION SECTOR:

EXPOSING THE MYTHS

Myth #2: Distribution jobs don’t pay well.

Wage rates within the distribution sector have recently seen significant growth when compared to the manufacturing sector. At the new Sainsbury’s distribution centre at Dartford, an 18 year old will start on a salary of £18,000 per annum and receive a programme of training.

Myth #3: A job in a distribution centre is a dead-end job.

It is also commonplace for occupiers to offer training and career development opportunities, particularly for young staff, as well as employment benefits such as subsidised pensions and medical insurance.

The proposed development is likely to provide job opportunities to the local community throughout the life cycle of the project. During the construction stage, significant short-term and semi-skilled employment will be available for site workers.

During the operational stage, jobs will be of a long-term nature and it is anticipated that a significant proportion of the workforce can be made up of workers who already live in the area.

Such companies create loyalty in their workforce and provide opportunities for career progression.

Myth #4: Distribution centres don’t employ many people.

Warehouse and distribution developments have the capacity to be labour intensive and generate a large number of jobs with a high economic value.

Myth #5: Maidstone only needs highly skilled jobs.

Whilst the sector does employ a significant proportion of workers with elementary and process operative skills, the needs of the local job market must be recognised.

The reductions in employment in the public sector are affecting the entire range of skill levels.

Myth #6: Maidstone would be better off trying to attract jobs in the manufacturing and production sectors.

The British economy has changed. The manufacturing and production sectors are now minority sectors and this is unlikely to change.

It is also worth noting that much existing manufacturing and production is so highly automated that it does not generate a great number or range of jobs. Indeed, frequently fewer jobs than distribution. Many distribution centres are not automated, as operators prefer to have flexibility to use staff rather than automation.

“an 18 year old will start on a salary of £18,000 p.a. and receive a programme of training”

The Maidstone area has already attracted 1. significant investment in logistics. But this has gone to locations outside Maidstone Borough where land was available, such as Tesco at Aylesford, and Brakes at Snodland.

Maidstone is well placed to receive goods 2. from Europe and to serve all of Kent, South East London and Sussex. There are no better locations along the M20, M25 or M26. Land in London is too expensive.

Maidstone is better placed than towns which 3. are actually receiving logistics investment, such as Sittingbourne and the Medway towns. This shows companies will invest in sites with motorway access in inferior locations elsewhere,

rather than accept an unsuitable site in their preferred location. Lorry movement logistics are a priority factor in selecting a location. For example, Royal Mail are establishing a centre at Strood because there were no suitable sites in their preferred location - Maidstone.

Several companies have a requirement 4. for large-scale logistics facilities in Kent. Companies like Amazon and Marks & Spencer are looking for sites. Agents have advised that this site at J8 is one of a very small handful of sites in Kent with the potential to be capable of accommodating this type of building and so meeting this demand.

REASONS WHY MAIDSTONE IS ALREADY MISSING OUT ON LOGISTICS INVESTMENT

A newly completed, modern distribution centre prior to occupation

What drives the investment decisions of Q5 high quality distribution and logistics firms?

Location – is it well placed and accessible for »their market (regional, national or European)?

Does it have good access to infrastructure? »

Employment – is there a good source of »people nearby covering the range and quantity of jobs that must be filled?

Are there restrictions on their operating »hours? They run 24/7 operations and so must not be too close to residential areas.

Is it deliverable? Is the site infrastructure »in or easily put in? Does the site have a planning allocation / designation?

Are there alternative sites »available in the area?

Is it big enough? The industry is now »going for fewer but larger facilities.

Does the site have access to public transport? »

The basic laws of supply & demand have always and will always drive decision making in the private sector.

It doesn’t matter that Maidstone may, for example, prefer offices. There isn’t sufficient demand for the land already allocated for offices and so it will make no difference if more land is allocated for offices. People don’t buy something they don’t need or want.

Conversely, people do buy what they do need or want. There is evidence that distribution and logistics companies are attracted to Maidstone. However there is no land available that meets their criteria. There is demand but no land available and so investment cannot happen.

This land at Junction 8 satisfies, or can be made to satisfy the investment criteria of high quality operators. It must first be granted planning status.

Are large-scale buildings really Q6 necessary?

Large-scale warehouses continue to prove attractive to occupiers and third-party logistics contractors as they are capable of accommodating a larger range of product lines all in one location. This leads to economies of scale for labour recruitment, transport costs and ultimately a more sustainable way of delivering goods to demanding customers and suppliers.

“there is demand for logistics development but no land available, so investment cannot happen”

Where should employment sites be Q7 located? What are the alternatives?

Maidstone Borough Council’s Economic Development Strategy 2008 recognises that:

There is a need for employment sites on the »edge of town, where the market is stronger;

There is a complete lack of good quality, »good sized sites and premises, which makes inward investment impossible;

If Maidstone is to play a bigger role in the »South East, and is not to lose out to the competition, more of its companies need to be serving markets outside the borough, so access to motorway networks is critical.

A previous study undertaken by GVA Grimley as part of the Economic Development Strategy 2008 failed to identify any suitable alternatives to Junction 8 as a potential non-office employment site.

The only other employment sites identified were:

Abbey Court (which now has »permission for office use);

Newnham Court (which now has permission »in part for a new hospital and where a medical campus is now proposed); and

West Abbey Court (a small site not »large enough to accommodate this scale of development)

There is no remaining land at junction 5 in Maidstone Borough and very little remaining at junction 6. At junction 7, Eclipse Park is either built out or permitted for office development, whilst remaining land at Newnham Court is better suited for a medical campus.

It is clear that junction 8 is the only suitable location for logistics development well-related to the motorway network within Maidstone.

“if Maidstone is to play a bigger role in the South East, making land available close to motorway networks is critical”

Example of a modern Tesco distribution warehouse

Why can’t the development go in the Q8 town centre?

Logistics developments are neither suitable nor required to be located in town centres although, in any event, no sites are available in the town centre to accommodate the scale of development proposed.

Logistics sites are best located away from urban areas to avoid potential disturbance from activity and vehicle movements, but with good access to labour.

How about sites that aren’t so well Q9 related to the motorway?

It may be possible to identify sites on other fringes of the town, which aren’t so well related to the motorway. But these won’t attract significant levels of inward-investment from companies looking for good motorway access.

Just as they have done in the past, investors will simply go elsewhere - like the Medway Towns or

Sittingbourne - for sites which better suit their needs, and Maidstone will continue to miss out.

Parkwood has proved to be an unattractive option despite the interest in Maidstone as a location. It has poor road access and would mean lorries having to travel through residential areas.

Why is motorway access important?Q10 Modern distribution facilities are served by a large number of lorries. Retail distributors especially depend on efficient distribution systems, which means strategic locations (well related to motorways) capable of serving regional, national and European markets.

Locations on motorways with good access to national and international markets are therefore prime locations for logistics development. Maidstone’s location on the M20, with its excellent links to European ports and the Channel Tunnel, give it fantastic potential to receive this type of investment.

“Maidstone’s location on the M20 and close to Europegives it fantastic potential for logistics investment”

Maidstone’s location adjacent to the M20 makes it a prime location for investment from the logistics industry

Maidstone is well placed to take advantage - there are no equally well located sites in Kent that could provide this scale and nature of development. But Maidstone can only take advantage if the right sites are allocated.

But aren’t there existing distribution Q11 companies in Maidstone, away from the motorways?

There are successful logistics companies in less accessible locations, like Marden. They are established there for historic reasons, having grown from local roots. But Firmins, a successful and growing business, had to relocate outside the borough in order to grow.

Places like Marden are not attractive to inward investors, looking to set up a new branch of an already-successful national or international operation. If Maidstone wants to attract this sort of investment, it needs to provide accessible locations, which means sites near motorway junctions.

Is there adequate infrastructure to Q12 serve the site?

Yes. Adequate services run along the A20 and can be extended into the site in a viable manner. See Table 1.

Who pays for the infrastructure?Q13 In better times, the public sector would enable large-scale development. This is not realistic for the foreseeable future as central and local government doesn’t have the funding.

So infrastructure must be funded by the development, which therefore needs to be of sufficient scale to justify the investment in infrastructure.

The J8 site is big enough to cover the considerable costs involved in servicing the site with roads, power, water, sewerage etc. This is made possible by the current use of the land and the option agreement that Gallagher has with the land owners, the Rochester Bridge Trust (RBT).

The land currently has agricultural value. The potential value of the developed land leaves enough headroom to pay for infrastructure, including diverting the gas main that crosses the site, leaving sufficient residual uplift for the RBT.

If the numbers do not add up then development will not happen. The numbers do work for the J8 site, given its proximity to the M20 motorway.

Transport Vehicular access is available into the site using a new junction onto the A20 Ashford Road »The local road network can accommodate the development, with only minor alterations to junction 8 »A footway to Bearsted is already in place »The site is within easy reach of a proposed cycle route between Maidstone and Ashford »The site is on a bus route, which can be upgraded on the back of the development »The site is close to Hollingbourne railway station »

Water & Sewage

A sustainable drainage scheme is proposed to deal with surface »water in an environmentally friendly wayFoul sewage infrastructure is in place nearby and can be accessed with local improvements »Adequate water supply exists »

Telecoms Nearby facilities can be extended into the site »Power Existing supply can serve site and be upgraded as required »

Table 1: Infrastructure

Is the site prominent in the Q14 landscape?

No. A previously submitted study shows that the site is not visible – in summer or winter – from Bearsted, Eyhorne Street or Maidstone Services. It is concealed or mostly concealed in short, medium and long range views by topography and/or woodlands. See cross section drawings overleaf.

Will the site have a significant adverse Q15 impact on the local landscape?

No. The site levels will be reduced by up to 15m on the western boundary to create a ‘flat’ development site (the land currently rises by 15m east to west).

By retaining existing boundary levels and planting, bunding will be created that totally hides the development from the west (Bearsted) and substantially hides the development from the north (junction 8 services). With additional bunding and planting, this will ensure that the proposal will not significantly impact upon the local landscape.

The cross-sections on the following pages show how the levels will be reduced, and bunding would be created and planted with native trees, shrubs and acid grassland to minimise the landscape impact of

the proposal. The bunds will be carefully designed to protect the root spread of trees outside the site.

Will trees need to be felled to create Q16 the development?

No.

Will there be ecological harm?Q17 No. The scheme will aim to improve ecological conditions. The existing arable field has little wildlife value. The site perimeters, where there are trees, grassed banks and water courses, will be maintained and could be improved as a wildlife zone, as indicated on the cross sections.

Planted areas within the development will respect the adjoining and surrounding landscape and improve biodiversity. Improvements can be made to the adjoining local woodland and water courses if the LPA consider this appropriate.

The Local Wildlife Site to the south of the site will be fully protected with development set back from it by some distance. Drainage systems will be designed to prevent the potential for contamination.

“The site is mostly concealed in short, medium and long range views by topography and woodlands”

Isn’t this just a different version of Q18 KIG?

No. These proposals bear little resemblance to KIG. The two schemes are very different in their location, scale, visibility and nature.

The proposed KIG rail freight interchange was proposed to be vast, and was totally different in scale and nature to that proposed at Junction 8.

Although it is on a smaller scale, it is anticipated that similar or more job numbers could be created at Junction 8 at a much wider range of skill levels, compared with KIG.

Unlike KIG, the proposals at junction 8 aren’t adjacent to and won’t be visible from Bearsted and so won’t have any of the significant effects on views from properties in that area.

Unlike KIG, it won’t have adverse impacts on any conservation areas.

Unlike KIG, there are no proposals for such vast buildings, or large areas of railway sidings, or 25m high cranes.

KIG J8

Indicative Masterplan Area Over 112ha (2.5 »km wide)

17ha »

Floorspace 300,000 m » 2 59,000 m » 2

Largest Building (possibly) 100,000 m » 2 40,000 m » 2

Jobs 2,600-3,900 (mostly »low skilled)

Up to 2,000 (various »skill levels)

Table 2: Comparison with KIG

Plan showing the proposed KIG location, far bigger than the J8 site and , unlike J8, adjacent to Bearsted vilage

What might these buildings look like?Q19 The images above, and throughout this brochure, demonstrate the high quality nature of modern distribution and logistics buildings, as envisaged to be developed at J8.

The ancillary office, catering and staff welfare facilities are of a high design quality.

Modern distribution buildings, which are

approximately 15m high, are designed to minimise air and noise pollution. External lighting will be designed to minimise energy consumption and light pollution.

Where appropriate, graduated cladding, which uses different shades of colours (as shown above), can be used to minimise the visual impact of large buildings.

What sustainable features can a Q20 modern distribution facility include?

Other distribution centres built recently in the UK have included a wide range of sustainability features to reduce carbon emissions and reduce environmental impact. These include:

Storm-water collection and re-use »

Low-flush WCs »

Use of solar thermal energy »

High levels of air tightness, in »excess of Building Regulations

Increased use of rooflights, to »optimise natural lighting

Use of more sustainable materials, such as »recycled steel, organic paint, carpets with 80% recycled yarn and timber from FSC9 sources

Use of sustainable drainage systems »

Gallaghers would look to make use of these and other sustainable technologies in any development at J8.

9 Forest Stewardship Council

An example of graduated cladding minimising visual impact

Greg Clarke MP’s Written Statement dated 23 March 20118 confirms that:

The Government’s top priority is to »promote sustainable economic growth

Authorities should be pro-active in »driving and supporting growth

Authorities should identify and meet business »and development needs and respond positively to wider opportunities for growth.

This document has demonstrated clearly that:

Maidstone is ideally placed for »logistics development

Distribution companies want to »come to Maidstone, but...

...Maidstone doesn’t have a single suitable »site to accommodate this demand.

8 http://www.communities.gov.uk/statements/newsroom/planningforgrowth

It seems obvious therefore that the Core Strategy should identify suitable sites, close to the motorway network, to meet the need for logistics facilities and reap the rewards of investment, jobs and economic growth.

As shown in this document, there are no suitable sites to accommodate this need at junctions 5, 6 or 7, and locations in other parts of Maidstone are totally unsuitable to attract logistics investment.

Gallagher’s site at J8 is suitable and available. It is one of very few sites in Kent which can accommodate the requirement for larger logistics buildings, yet the topography enables the provision of large buildings without significant adverse visual impact and with no ecological harm.

As part of its employment land review, Maidstone should carefully consider the potentially significant contribution J8 can make to the local economy.

If Maidstone doesn’t grasp its opportunities, then it won’t simply stand still as progress at competing locations in Kent will result in Maidstone going backwards.

CONCLUSIONS

For more information contact: Nick YandleGallagher Group LtdLeitrim HouseLittle PrestonAylesfordME20 7NS

(01622) 716543

Jonathan BuckwellDHA PlanningEclipse HouseSittingbourne RoadMaidstoneME14 3EN

(01622) 776226

Lanat GALLAGHER PROPERTIES LTD

LAND SOUTH OF M20 JUNCTION 8

MAIDSTONE CORE STRATEGYCALL FOR SITES SUBMISSION

JUNE 2012REF JB/6151

GALLAGHER PROPERTIES LTD

LAND SOUTH OF M20 JUNCTION 8, MAIDSTONE

RESPONSE TO MAIDSTONE BOROUGH COUNCIL’S CALL FOR SITES

JUNE 2012

JB/6151

Gallagher Land south of Ashford Road, M20 J8, Maidstone

Call for Sites Submission – June 2012 Page 2 Ref: JB/6151

Contents

1 INTRODUCTION .................................................................................................................. 3

1.1 Purpose of this Document ............................................................................................................................................... 3 1.2 Submission Documents ................................................................................................................................................... 3

2 BACKGROUND .................................................................................................................... 4

2.1 Strategic Employment Allocation at Junction 8 ...................................................................................................... 4 2.2 Need and Demand for Employment Sites ................................................................................................................. 4 2.3 Where should employment sites be located? .......................................................................................................... 5

Developer Interest ............................................................................................................................................. 5

3 SITE DETAILS AND ISSUES ................................................................................................. 8

3.1 The Site................................................................................................................................................................................... 8 3.2 Site Constraints and Considerations ............................................................................................................................ 9

Access / Transport Issues ................................................................................................................................ 9 Access to Services ............................................................................................................................................ 11 Ecology ................................................................................................................................................................ 11 Landscape Impact ........................................................................................................................................... 12 Utilities ................................................................................................................................................................ 13

3.3 The Case for this Site ....................................................................................................................................................... 14 3.4 Draft Policy Wording ....................................................................................................................................................... 15 3.5 Draft Development Brief ................................................................................................................................................ 15

4 CONCLUSIONS .................................................................................................................. 16

4.1 Demand ............................................................................................................................................................................... 16 4.2 Availability .......................................................................................................................................................................... 16 4.3 Deliverability ...................................................................................................................................................................... 16 4.4 Comparison with Alternative Sites ............................................................................................................................. 16 4.5 Sustainability ...................................................................................................................................................................... 17 4.6 Conclusion .......................................................................................................................................................................... 17 APPENDICES 1 Letter from Michael Alderton, Lambert Smith Hampton 2 Letter from Wildlife Matters, June 2012



1 Introduction

1.1 Purpose of this Document

1.1.1 Maidstone Borough Council has recently issued a Call for Sites, to seek information on potential development sites within the Strategic Development Locations identified in the draft Core Strategy.

1.1.2 This document has been prepared by Gallagher Properties Ltd and DHA Planning to support a Call for Sites submission in relation to the proposed employment Strategic Development Location at M20 Junction 8.

1.1.3 It demonstrates that the “Gallagher land”1 is available, quickly deliverable and is the most suitable site in the J8 Strategic Development Location for high quality, sustainable employment development. Strategic allocation of the site would enable Gallagher to offer and deliver a multi-million pound investment into Maidstone’s economy and generate hundreds of jobs, whilst respecting the landscape and ecological considerations.

1.2 Submission Documents

1.2.1 This Call for Sites submission comprises:

• This report;

• Call for Sites form, duly completed;

• Site Location Plan;

• Landscape and Visual Impact Assessment; and

• J8 – Maidstone’s Core Strategy: Selecting the Right Locations for Economic Growth – Questions and Answers, dated March 2011 (previously submitted as part of Core Strategy representations, and included again for completeness)

1 The site is described in detail in section 3



2 Background

2.1 Strategic Employment Allocation at Junction 8

2.1.1 The 2011 Reg.25 draft Core Strategy indicated strategic development locations on its key diagram but did not allocate specific sites. Cabinet has since agreed that strategic sites should be allocated in the Core Strategy2.

2.1.2 A Call for Sites issued on 11 May 2012 invited the submission of available sites within certain strategic development locations, including the strategic employment location for approximately 11ha net at M20 Junction 8.

2.1.3 This is welcomed as it:

(1) Provides potential investors with greater confidence on deliverability; and

(2) Can calm the concerns of people worried about a return of the KIG development that caused great opposition.

2.2 Need and Demand for Employment Sites

2.2.1 As with every town and city in the UK, Maidstone needs to stimulate private-sector investment by attracting good quality sustainable development to create long-term employment at all levels.

2.2.2 Maidstone is highly dependent on public sector employment, giving significant concern in the current climate of severe service cuts. The loss of hundreds or thousands of public sector jobs in the Maidstone area could devastate the local economy. This cannot be ignored. As required by the NPPF3, the Core Strategy must enable sustainable development rather than blocking it.

2.2.3 Maidstone’s competition includes Kings Hill, Ashford, Dartford and Sittingbourne. All have developed or are developing strategies to encourage investment, and represent a significant threat to Maidstone. Therefore Maidstone must beat the competition to ensure that it gets its fair share.

2.2.4 The market perceives that, compared with its competitors, Maidstone is a more difficult place to “get things done”. This perception is a legacy of its past and must be changed. This can be achieved by embracing the Government’s agenda of making planning simpler and easier without compromising quality.

2 See Report of Director of Change, Planning and the Environment, 16 May 2012, http://meetings.maidstone.gov.uk/documents/s22799/Cabinet,%20Council%20or%20Committee%20Report%20for%20Local%20Development%20Scheme%202012-15.pdf 3 National Planning Policy Framework



2.2.5 We are pleased that the Council has recognised the importance of site-specific strategic allocations in the Core Strategy. In order to attract investment, the right kind of land must be made available in the right location. The customer’s (investor’s) view of what is “right” is paramount. The customer/investor must also have confidence that the site is deliverable.

2.2.6 Maidstone currently has no suitable strategic distribution sites available. This is an opportunity to compete in market place taking advantage of Maidstone’s location and multiple motorway junctions.

2.3 Where should employment sites be located?

2.3.1 Maidstone Borough Council’s Economic Development Strategy 2008 (EDS 2008) recognises that inward investors and existing businesses requiring larger premises are looking for:

• Employment sites on the edge of town with good motorway access, enabling companies to serve markets outside the Borough; and

• Good quality, good sized sites and premises (which the EDS 2008 recognised are missing in Maidstone at present, making inward investment impossible).

2.3.2 The strategic employment location at Junction 8 is the right decision to help attract new chances of investment and retain existing employers, but the right site must be allocated within this area in order to maximise success.

2.3.3 This is underlined by a recent survey4 which found that 73% of local authorities have allocated employment sites which have not seen any development within a decade. 60% of these authorities felt the non-delivery was having a significant effect on employment land supply or economic development aims, hampering economic growth.

2.3.4 This report explains that the “Gallagher land” is best placed to meet the needs of the market whilst minimising the effect on environmental quality.

Developer Interest

2.3.5 Question 23 on the Call for Sites form asks whether a developer has expressed interest in the site for employment development. We expand upon our answer to this question below.

Need & Demand

2.3.6 Gallagher Properties Ltd secured the long term option on this land at junction 8 of the M20 six years ago.

2.3.7 The land was always considered too remote from other conurbations to be suited for residential development. At that time the economic climate was buoyant and office buildings were the obvious form of employment development through which to

4 Survey by Nathaniel Lichfield and Partners, reported in Planning, 09 March 2012



maximise land value. The site has never been marketed however people became aware of it through our promotion of the land to Maidstone Borough Council as part of the Core Strategy process.

2.3.8 The economic outlook for the UK changed dramatically and demand for new office developments all but disappeared, over-night.

2.3.9 Gallagher continued to promote the site for employment development whilst researching the market to identify commercially viable demand and it became clear that distribution / logistics operations were a growth area attracting investment and creating demand. One of the drivers for this was rapidly increasing fuel prices creating a situation where businesses were being planned around the cost of transport.

2.3.10 From their research it became clear to Gallagher that blue chip operators wanted sites that included the following features:

• Strategically located – Kent is popular because of the high population and proximity to Europe, London and the UK motorway network;

• Immediate access to the motorway network;

• Ability to operate ‘24/7’;

• Close to a good employment ‘pool’ for the full range of jobs (technical, managerial & manual);

• Clearly deliverable; and

• Of sufficient size to accommodate buildings ranging from 10,000m2 upwards.

2.3.11 Their buildings are well designed and energy efficient – something we saw when we visited the Sainsbury distribution operation at Dartford.

2.3.12 It quickly became clear that although Maidstone is strategically well located, it offers no sites with these characteristics. Operators looking for these kinds of sites go to places like Sittingbourne, Ashford and Dartford.

2.3.13 Without having marketed the site we have received a good number of enquiries. These enquiries and the criteria that lie behind them are the real evidence of need and demand. Real examples include:

(1) Royal Mail Sorting / Distribution in 2008 (consolidation of several operations). Maidstone was considered a good location but failed because nothing was deliverable. The new operation was recently opened at Strood.

(2) The agent for Tesco reported that Maidstone would have been the preferred location but nothing was available. They developed their new ‘dot com’ operation at Quarry Wood Aylesford in spite of access difficulties, for want of other options.



(3) Gazeley Properties are probably the foremost developers of distribution and logistics sites. They recently developed the new Morrison distribution warehouse at Sittingbourne. They have approached Gallagher Properties Ltd to joint venture on the Junction 8 site because they consider it a prime location.

(4) Local company ‘A’ seeking 15,000 m2 of distribution warehouse with large office content. Looking to grow and consolidate operations from 4 buildings to 1 for efficiency. They are considering moving to other parts of Kent if nothing suitable can be provided in Maidstone area. (Subject of current discussion).

(5) Local company ‘B’ seeking 15,000 m2 of manufacturing production & storage with high office content (with ability to extend to 22,500 m2). Transfer of operation to mainland Europe is a risk to Maidstone. (Subject of current discussion).

2.3.14 If Maidstone Borough council were to identify the “Gallagher land” as a strategic employment allocation then Gallaghers would be able to market it, demonstrating that it was deliverable within a given time frame, thereby securing important investment, jobs and significant business rate income to Maidstone Borough.

2.3.15 A letter from Michael Alderton at Lambert Smith Hampton is included at Appendix 1 which sets out this case in further detail. In particular it confirms that:

• The Gallagher land is better suited in terms of location and other key parameters than other existing or potential sites in Kent to provide a logistics facility;

• There is currently existing demand from existing occupiers in the County and region but also other occupiers seeking to relocate in or to the area;

• This demand cannot be satisfied by the existing sites in mid Kent and the wider County, posing a real risk that existing companies could relocate out of the Kent altogether;

• The continued delays with the allocation of this site and bringing it forward for development, creates uncertainty over timing for delivery of buildings.



3 Site Details and Issues

3.1 The Site

3.1.1 The 17ha site5 is being promoted by Gallagher Properties Ltd with the full support of the landowners, the Rochester Bridge Trust, with whom Gallaghers have a long term option agreement. It is currently in agricultural use.

3.1.2 The site is located immediately south of the A20 /M20 link road junction. The Mercure Hotel is to the east, whilst Old Mill Lane, a secondary local access road, is to the west. The site boundary is shown in Figure 3.1.

Figure 3.1: Site Location Plan

3.1.3 The site can accommodate up to 60,000 m2 of employment floorspace, suitable for a variety of B1, B2 and B8 employment uses within a landscaped and screened setting. In its design, it can also deliver the first section of the South East Maidstone Strategic Link (Leeds-Langley bypass).

5 Approximately 13ha of which is net developable



3.2 Site Constraints and Considerations

3.2.1 Information about site constraints and considerations is provided in section 4 of the Call for Sites form. Where necessary, this information is expanded upon below.

Access / Transport Issues

Vehicular Access

3.2.2 The site is highly accessible from the M20, having an extensive frontage to the A20 and being just 250 metres from Junction 8. There is no impediment to the formation of a direct access, either from a modified A20/M20 link road roundabout, or by a left-in, left-out access to the A20 in the eastern part of the site.

Pedestrian Access

3.2.3 A pavement exists along the entire north side of the A20, providing direct pedestrian access to Bearsted, Leeds, Eyhorne Street, Hollingbourne and Harrietsham.

3.2.4 A further footway could be created along the site frontage, which could link to the existing pavement via new crossing points.

Public Transport Access

3.2.5 Most of the site is within 400m of the nearest frequent bus route, which is the target walk distance for access to a bus stop. Route 10X provides an hourly weekly daytime service to Maidstone, Harrietsham, Lenham, Charing and Ashford. Route 13 also passes within 400m of the edge of the site, linking Leeds and Hollingbourne with Maidstone Town Centre every 2 hours. The site is closer to this second bus service than most other potential development sites in the area.

3.2.6 The proposed development would increase demand for public transport services, particularly during the morning and evening peaks, giving bus companies the potential to improve the level of service they provide through increased patronage and viability.



Cycle Access

Figure 3.2: Proposed Cycle Route (Sustrans)

3.2.7 There are no designated cycle routes close to the site, although a route is planned to connect Ashford and Maidstone, via Leeds village and other villages in between. When completed, this route will be within 1km of the site, accessible via Old Mill Road which is lightly trafficked and so suitable for cycle journeys. A direct route to Maidstone town centre through Bearsted would then result utilising the existing off road route running through Mote Park.

Highway Capacity

3.2.8 The 2011 draft Core Strategy acknowledged that M20 Junction 8 is not under pressure from traffic congestion, and that with its location away from the congested Maidstone town centre the general area provides opportunity for growth without adversely impacting on existing highway network pressure points.

Compliance with draft Core Strategy Policy CS7

3.2.9 The three tests set out in draft Core Strategy Policy CS7 can all be met by development of the Gallagher site:

(1) Development access can be achieved through extensive site frontage with the A20 principal route, and can be delivered without impacting on road safety;



(2) Heavy goods vehicle generating employment development would not be expected to adversely impact existing traffic capacity levels; and

(3) All transport needs can be met by development through relatively straight forward upgrade of sustainable transport modes.

Access to Services

3.2.10 Services such as education and health, as listed on the Call for Sites form, are less relevant to employment developments than access to hotels, restaurant and retail facilities and transport.

3.2.11 The site has excellent access to hotels, being adjacent to the Mercure Hotel, whilst the Tudor Marriott Golf & Country Club is also nearby. Restaurant and retail facilities are also available at the M20 services close to the site, and at the Yeoman Lane local shopping area in Bearsted.

3.2.12 The scale of the site and its capacity for development is such that potential exists for on-site facilities to be created for future employees.

Ecology

3.2.13 Development of the site would aim to improve ecological conditions. The existing arable field has little wildlife value. The site perimeters, where there are trees, grassed banks and water courses, will be maintained and improved as a wildlife zone.

3.2.14 Planted areas within the development would respect the adjoining and surrounding landscape and improve biodiversity. Improvements can be made to the adjoining local woodland and water courses if required.

3.2.15 The Local Wildlife Site to the south of the site6 would be fully protected with development set back from it by some distance. Drainage systems would be designed to prevent the potential for contamination.

3.2.16 Initial survey work by Wildlife Matters7 suggests that:

• There are no protected species within the main body of the field;

• 96% of the site is species-poor and devoid of significant biodiversity features;

• The remaining 4%, around the perimeters, contains some common reptiles but these areas can be conserved in situ; and

• The water bodies to the east and south are not suitable for Great Crested Newt.

6 Kent Wildlife Trust site MA14 River Len Millpond and Carr, Leeds 7 See letter at Appendix 2



Landscape Impact

3.2.17 A Landscape and Visual Assessment has been undertaken and is submitted alongside this report. This concludes that the site is not subject to landscape quality designations and is not within the North Downs Special Landscape Area.

3.2.18 It is noted that the landscape immediately surrounding the site is somewhat disturbed, containing a waste transport depot, the A20, a motorway junction and a hotel. The Council’s own Landscape Character Assessment recognises that the area including the site is in very poor condition.

3.2.19 Indicative landscape proposals8 show that development platforms could be created by reducing levels in the western part of the site by up to 15m, meaning that the buildings would be set well below existing ground levels and would not be visible from the west, as they would be screened by the existing bank and vegetation alongside Old Mill Road.

3.2.20 The newly created slopes around the western and northern sides of the site would be densely planted, and planted bunds of between 2 and 6m in height would be provided along the southern and eastern sides of the site, to reinforce the existing screening vegetation.

3.2.21 Whilst it is recognised that there would initially be some moderate adverse effects on the local landscape in winter, these would be reduced in summer and would decrease over time as new planting became established.

3.2.22 Furthermore, the report contains analysis of other potential alternative sites around Junction 8 and concludes that, in landscape terms, the “Gallagher land” has the lowest existing landscape quality, is the least sensitive site and would, in principle, lead to the lowest level of adverse landscape effects. In particular:

• Development of the Gallagher site would have a lower impact on the landscape compared to the development of other sites nearby;

• Unlike some other sites nearby, the Gallagher site is not directly affected by landscape designations;

• Of the potential sites in and around Junction 8, the Gallagher site is the furthest away from the Area of Outstanding Natural Beauty;

• No competitor sites have a lower level of landscape sensitivity than the Gallagher site;

• No competitor sites have a lower level of landscape quality than the Gallagher site;

• Unlike other sites, there would be no significant loss of vegetation or impacts on watercourses;

8 Included as Appendix A to the submitted Landscape and Visual Impact Assessment, June 2012



• Unlike other sites, the alteration of levels within the site would not result in landscape and visual impact problems.

Utilities

3.2.23 Desktop enquiries and surveys have been undertaken with the various utility companies. Adequate services run along the A20 and can be extended into the site in a viable manner.

Foul Drainage

3.2.24 The nearest foul sewers are located in Ashford Road. The requirement to accommodate the foul drainage from the development can be met subject to limited potential reinforcement of the existing drains adjacent to the site.

Surface Water Drainage

3.2.25 As the site is greenfield, a surface water drainage strategy would need to be agreed with the Environment Agency, which is likely to be based on a SUDS9 system. This will be designed to accommodate a 1 in 100 year rainfall event plus a minimum 20% allowance for climate change without causing surface flooding.

3.2.26 This resulting system would protect the capacity of the receiving watercourses in the vicinity of the site. Adequate surface water drainage can be accommodated using appropriate techniques that will not cause off-site problems.

Water Supply

3.2.27 The water supply for the existing area is through a number of operational mains provided by South East Water. Given the existence of trunk mains north of the town, supplies to the area around J8 are understood to be adequate and the site could be supplied using the existing infrastructure.

Telecommunications

3.2.28 Telecommunication services are available locally and BT has confirmed that their facilities would be able to serve the site. Extension of these networks would be possible efficiently and economically.

Power

3.2.29 The existing power supply can serve initial phases of the development site and upgrades can be provided to serve the rest of the site.

9 Sustainable Urban Drainage System



Utility Costs

3.2.30 The initial appraisal carried out by Gallaghers has confirmed that the costs of upgrading utility services to the site are affordable within the parameters of the purchase framework for the site.

3.3 The Case for this Site

3.3.1 A strategic employment allocation should be made on land controlled by Gallagher at M20 Junction 8. The case for such an allocation, has been set out in previous submissions, which are summarised below:

• The site is of an appropriate scale to accommodate the identified need for employment floorspace;

• The site is suitable to accommodate a range of B1/B2/B8 uses, many of which would not be suitable or appropriate in the town centre;

• Strategic vehicular access to the site is readily available without the need for expensive improvements to highway junctions and links;

• In contrast to some other sites locally, the Gallagher site has almost immediate access to the motorway, minimising impacts on the local road network;

• Its location opposite M20 J8 will be attractive to the market, encouraging inward investment, and will minimise detriment to highway amenity;

• The location opposite M20 J8 is ideal for companies requiring access to the Channel Tunnel and docks via the motorway system;

• The site could generate 2000+ jobs covering a wide range of skills and professions;

• The site is well-contained by existing boundaries, with minimal risk of future development creep onto neighbouring sites;

• Development of the site will not adversely impact upon the residents of nearby settlements such as Bearsted, Leeds or Hollingbourne;

• Unlike some other sites, the site is suitable to be used 24 hours a day without detriment to residential amenity, which is an important requirement to many potential occupiers;

• Unlike other sites, this site could help to facilitate future delivery of the South East Maidstone Strategic Link;

• Allocating this site would help to allay locally held fears about the re-emergence of the KIG proposals;



• There is no impediment to the prompt delivery of job-creating development on this site.

3.4 Draft Policy Wording

3.4.1 Suggested wording for the strategic allocation policy is set out below:

Land to the south of M20 Junction 8 is allocated for 17 hectares of employment development to create up to 60,000 m2 of floorspace predominantly for B8 storage and distribution uses.

The Proposals Map shows the boundaries of the strategic allocation.

Development proposals should:

Provide (or make contributions) to on-site or off-site infrastructure requirements associated with the development including highway junction improvements

Provide (or make contributions to) any other on-site or off-site infrastructure requirements which are necessary as a result of the proposals

Safeguard space to allow the future development of the South East Maidstone Strategic Link

Be developed in accordance with a development brief produced and adopted for development management purposes. The brief will provide guidance on such issues as access matters; bulk, height, massing and design of any built structures and will require any application for development to take account of the landscape setting. Additionally the brief will set parameters for the scale of development to come forward and will seek to guide a solution for the complete development. The brief will also set out any work required to protect, enhance and further diversify biodiversity assets.

3.5 Draft Development Brief

3.5.1 The Regulation 25 draft Core Strategy contained a requirement for a development brief to be produced and adapted to guide around Junction 8.

3.5.2 It is important however that whilst the brief should ensure an acceptable scale of development which limits any impact on the surrounding area, the brief should be sufficiently flexible to encourage sustainable economic development to come forward at Junction 8 at the earliest possible opportunity.

3.5.3 We are happy to work with the Council to develop a Development Brief for the site.



4 Conclusions

4.1 Demand

4.1.1 There is demand for B8 logistics and B2 general industrial development but Maidstone does not currently provide any suitable land to satisfy this demand.

4.2 Availability

4.2.1 The site is available for development immediately.

4.3 Deliverability

4.3.1 As demonstrated in this report, economic development on this site is deliverable and, crucially, would be attractive to the market. The site does not have any ownership or infrastructure constraints and Gallaghers have the operational capabilities to deliver development sites and new buildings to meet the requirements of existing and new businesses seeking to invest in the Maidstone economy.

4.3.2 There are no current issues relating to deliverability that would delay the implementation of employment development, and therefore this site gives the opportunity for early employment wins.

4.4 Comparison with Alternative Sites

4.4.1 This report and the accompanying Landscape and Visual Assessment demonstrate that compared to alternative sites in the Junction 8 area, the “Gallagher land”:

• Is the right size to accommodate the identified need;

• Probably has the best and most direct access to the M20, minimising impacts on the local road network, and being an extremely attractive location to the market;

• Would have a lower impact on the landscape compared to other local sites, assisted by the ability to create lower level development platforms;

• Is the furthest site from the AONB;

• Is not affected by landscape designations;

• Has the lowest level of existing landscape quality compared to other sites;

• Has the lowest level of existing landscape sensitivity compared to other sites;

• Would have minimal impacts on residential amenity;



• Would not result in significant loss of vegetation or impacts on watercourses;

• Is a contained site, with well-defined existing boundaries;

• Could help to facilitate future delivery of the South East Maidstone Strategic Link;

• Would help to allay fears about the re-emergence of KIG;

• Is available for development immediately.

4.5 Sustainability

4.5.1 This report has demonstrated that the site is the best available option locally in terms of satisfying the market requirement and minimising landscape and visual impacts as well as effects on ecology.

4.5.2 As has been demonstrated in previously submitted reports, Gallaghers propose to make use of a wide range of sustainability and energy-saving features in any development on this site. Such features could include storm water collection and re-use; low flush WC’s; use of solar thermal energy; high levels of air tightness; increased use of rooflights to optimise natural lighting; use of sustainable drainage systems; and increased use of sustainable materials.

4.5.3 If planning permission is subsequently approved, Gallaghers would be happy to set up a monitoring committee (similar to that set up to monitor the Kent Institute of Medicine and Surgery at Junction 7) to keep Members fully appraised of the detailed development of the site.

4.6 Conclusion

4.6.1 The Core Strategy sets Maidstone’s strategic priorities for the next 15 years. The Council’s decisions now will have a significant part to play in relation to the health of the local economy over this time. Maidstone’s heavy reliance on public sector employment, together with the budget cuts currently being experienced in this sector, have the potential to have significant adverse effects on the local economy.

4.6.2 The Council recognises it must act now to ensure that the private sector can create jobs to replace those being lost elsewhere so that Maidstone’s economy can grow. Development of the “Gallagher site” would help bring new jobs to Maidstone and keep current ones as existing companies grow. At the very least, significant action needs to be taken to ensure that Maidstone doesn’t lose ground to neighbouring towns.

4.6.3 With rising fuel prices, the logistics and distribution industry for blue chip manufacturers and retailers is becoming ever more strategic. Maidstone is strategically well positioned but currently offers no suitable allocations to meet this identified need.

4.6.4 In order to enable economic growth, the strategic allocation of the Gallagher site would enable the delivery of a high quality sustainable, job-generating development within a relatively quick timescale.

1 APPENDIX

Letter from Lambert Smith Hampton

www.lsh.co.uk

Inside this report:

National Industrial & Distribution Market 2012

Executive Summary

Outlook: lack of grade A will tip market back in favour of landlords

Supply of grade A space continued to tighten, falling to its lowest level in five years.

National Office Report 2011National Industrial & Distribution Market 2012

Definitions�

�


Economy

The threat of a double dip recession has intensified

Eurozone crisis impacts UK’s economic recovery

Private sector employment partly fills the gap

Inflation to fall in second half of 2012

Q413(f)

Q313(f)

Q213(f)

Q113(f)

Q412(f)

Q312(f)

Q212(f)

Q112(f)

Q411

Q311

Q211

Q111

Q410

Q310

Q210

Q110

Q409

-0.5

0.0

0.5

1.0

1.5

Figure 1: GDP growth

GDP Manufacturing Private sector investment Exports

-15

-10

-5

0

5

10

15

2014(f)

2013(f)

2012(f)

2011(est)

20102009200820072006

Figure 2: Key indicators of GDP growth

5,800

5,900

6,000

6,100

6,200

6,300

6,400

Private sector Public sector (rhs)

22,250

22,500

22,750

23,000

23,250

23,500

23,750

Q311

Q211

Q111

Q410

Q310

Q210

Q110

Q409

Q309

Q209

Q109

Q408

Q308

Q208

Q108

Figure 3: Private and public sector employment

The impact of the Eurozone crisis has taken its toll on growth expectations.

National Office Report 2011

Market overview: demand

Activity slows in the second half of the year

Distribution warehouse take-up slows

Regional activity moves away from traditional sectors

0

20

40

60

80

100

120

2011201020092008200720062005

All grades Grade B/C Grade A

Figure 4: Take-up

2010 2011

0

5

10

15

20

25

30

35

>100,00050,001-100,00025,001-50,00010,001-25,0005,001-10,000≤5,000

Figure 5: Take-up by size

2010 2011

0

2

4

6

8

10

12

14

16

ScotlandWalesNorthEast

NorthWest

Yorkshire& The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

GreaterLondon

Figure 6: Take-up by region


Take-up in the last six months of 2011 was 17% below the figure for the first half of the year.


Market overview: supply

Supply of grade A stock tightens

Supply of small units increases

Availability peaks despite increases in the Midlands

Grade B/C (lhs) Grade A (lhs) Availability rate (rhs)

0

50

100

150

200

250

300

350

400

2011201020092008200720062005

6

8

10

12

Figure 7: Availability by grade

≤5,000

5,001-10,000

10,001-25,000

25,001-50,000

50,001-100,000

>100,000

11%

12%

20%

16%

16%

25%

Figure 9: Availability by size

2010 2011

0

2

4

6

8

10

12


NorthWest

Yorkshire& The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

Greater London

Figure 8: Grade A availability by region

0 5 10 15 20 25

West Midlands

East Midlands

Scotland

UK average

North West

South East

North East

Greater London

Wales

Yorkshire & The Humber

South West

Eastern

Figure 10: Regional availability rates 2011

Market overview: rents

Prime rents grow for the first time in three years

Prime rents Secondary rents

0

5

10

15

20

25

30

FallingStaticGrowing

Figure 12: Rent movements in LSH locations

Standard industrial Distribution

-8

-6

-4

-2

0

2

4

6

15(f)

14(f)

13(f)

12(f)

111009080706050403020100

Figure 11: Rental growth forecast


27% of the locations surveyed across the UK market have shown an increase in prime rents.


Distribution: demand

Shortage of grade A stock leads to pre-lettings

Retailers and third party logistics dominate demand

Take-up increased in Greater London and South East

Retail/wholesale

Other

Manufacturing

Third party logistics

Internet retailer

Recycling/waste

19%

2%

26%

10%

20%

23%

Figure 14: Large unit take-up by tenant type

0

5

10

15

20

25

30

35

2011201020092008


Figure 13: Large unit take-up by grade

2010 2011

0

1

2

3

4

5

6


NorthWest

Yorkshire & The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

GreaterLondon

Figure 15: Large unit take-up by region

Over the past 12 months there has been an increase in activity for grade A or build to suit space.

Distribution: supply

Availability falls for first time in three years

Acute shortages imminent

Increase in pre-lettings and build to suit


100,000-249,999 sq ft >250,000 sq ft

0

2

4

6

8

10

12

14

16


NorthWest

Yorkshire& The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

GreaterLondon

Figure 17: Large unit availability by region and size

Grade B/C Grade A

0

20

40

60

80

100

120

2011201020092008

Figure 16: Large unit availability by grade

0

2

4

6

8

10

12

14

16

18

20

Yorkshire& The

Humber

WestMids

SouthWest

EastMids

NorthEast

GreaterLondon

South East

NorthWest

ScotlandEasternWales

Months supply UK average

Figure 18: Large unit months supply of grade A floor space by region

Half of the regions in the UK are facing acute shortages of large units grade A availability.


Small and medium sized units

Demand

Take-up of medium sized units strongest

Falling demand in second half of 2012

2010 2011

0

1

2

3

4

5


NorthWest

Yorkshire& The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

GreaterLondon

Figure 20: Take-up of small industrial units

2010 2011

0

1

2

3

4

5

6


NorthWest

Yorkshire& The

Humber

WestMids

EastMids

Eastern SouthWest

SouthEast

GreaterLondon

Figure 19: Take-up of medium industrial units 2010/11

Greater London

South East

Eastern

South West

East Midlands

West Midlands

Yorshire & The Humber

North West

North East

Wales

Scotland

15%

8%

14%8%

7%

8%12%

10%

5%8%

5%

Figure 21: Regional share of take-up of small and medium sized industrial units

Overall activity registered at 64m sq ft, 6% ahead of the total take-up recorded in the previous year.

10


Small and medium sized units

Supply: small unit availability increases

Shortages of grade A stock

Months supply UK average

0

2

4

6

8

10

12

14

16

NorthEast

NorthWest

WalesGreaterLondon

Yorkshire& The

Humber

EasternSouthEast

WestMids

EastMids

SouthWest

Scotland

Figure 23: Small and medium sized industrial units months supply of grade A floor space by region

10,001-50,000 sq ft<10,000 sq ft

0

5

10

15

20

25

30

35

40


NorthWest

Yorkshire& The

Humber

WestMids

EastMids

SouthWest

EasternSouthEast

GreaterLondon

Figure 22: Availability of small and medium sized industrial units

Grade A availability of small and medium sized industrial units across the UK represents 10 months supply of stock.

11


Investment overview

Activity strongest in distribution sector

Yields rise for first time in four quarters

Table 1: Total return comparisons

Total Income Capital Rental return return growth growth

All Property 8.10 6.80 1.20 0.10

Table 2: Net initial yields

Q4 10 Q1 11 Q2 11 Q3 11 Q4 11

All Industrial 8.07 7.79 7.58 7.21 7.46

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2011201020092008200720062005

Figure 24: Industrial sector investment

Table 3: Top five distribution deals

Property Price (£m) Net initial yield (%) Buyer Vendor

Investment overview

Portfolio transactions drive activity

Table 5: Net initial yields

Table 6: Top five estate deals

Property Price (£ms) Net initial yield (%) Buyer Vendor

Table 4: Categorised net sellers in the sector

Investor type Net investment/sales (£ms)


Office Retail Industrial

0

2

4

6

8

10

Q4Q3Q2Q12011

Q4Q3Q2Q12010

Q4Q3Q2Q12009

Q4Q3Q2Q12008

Q4Q3Q2Q12007

Figure 25: Sector transaction yields

Investment into the industrial sector during 2011 fell in line with overall investment market activity.

Regional Industrial and Distribution Markets

NorthEast

NorthWest

Scotland

Yorkshire &The Humber

EastMidlands

Eastern

GreaterLondon

South East

South West

Wales

WestMidlands

ScotlandTake-up was 38% higher. The highest level of activity recorded since 2006.

South EastThe South East had one of the largest increases in take-up.

Greater LondonAvailability fell slightly to 24m sq ft – the lowest it has been in three years.

South WestTake-up remained below the five year average for the region for the third year in a row.

EasternThe availability rate in the Eastern region remains the lowest across the UK at 5.7% of built stock.

WalesThe amount of available stock on the market reduced, the first contraction in availability in five years.

East MidlandsAvailability stood 7.5% higher than the comparable figure in 2010.

North EastThe overall availability rate in the North East stands at 9.1%, up from 8.9% at the end of 2010.

West MidlandsDespite a slowdown in activity, take-up was 25% ahead of the five year average.

North WestThe tightening market for grade A space has pushed prime rents across the region higher.

Yorkshire & The HumberThere is a recognisable shortage of grade A distribution space in West Yorkshire.


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

30,000

20112010200920082007

Availability

2011 2010

0

2

4

6

8

10

12

14

16

Croydon Barking/Dagenham

Thurrock Dartford Enfield Park Royal Heathrow

Rents

0 2 4 6 8 10 12 14

Enfield

Barking/Dagenham

Dartford/Thurrock

Park Royal

Croydon

Heathrow

Greater London availability rate

12.5

10.5

6.3

9.9

9.4

10.3

Availability rate

Key deals by size

Town Building Size Rent (£ per sq ft)/ Tenant/ Deal type (sq ft) Sale price (£) Purchaser

National Office Report 2011Greater London

Take-up

Availability

Rents

Greater London

Croydon

Enfield

Dartford

Thurrock

Barking\Dagenham

Heathrow

Park Royal

Heathrow/Park Royal Enfield

Croydon

Dartford/Thurrock and Barking/Dagenham

Availability fell slightly to 24m sq ft – the lowest it has been in three years.

South East

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

20112010200920082007

Availability

Prime 2011 Secondary 2011 Prime 2010 Secondary 2010

PortsmouthFarehamMiltonKeynes

South’tonGuildfordOxfordSloughReading

0

2

4

6

8

10

12

Rents

0 2 4 6 8 10 12

Oxford

Guildford

Southampton

Portsmouth

Milton Keynes

Slough

Fareham

Reading

South East availability rate

10.7

8.9

3.6

3.7

8.3

5.1

10.2

7.1

Availability rate

Take-up

Availability

Rents

Key deals by size


South East

Milton Keynes

Oxford

Maidenhead

Southampton

Fareham

ReeadingeReading

SloughSSSlough

Guildford

Thames Valley

Milton Keynes

Guildford

Camberley/Farnborough/Frimley

South Coast

The South East had one of the largest increases in take-up.

Eastern

0

2,000

4,000

6,000

8,000

10,000

12,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

20112010200920082007

Availability


0

2

4

6

8

10

ChelmsfordCambridgePeterboroughLutonWatfordHemelHempstead

Bedford

Rents

0 2 4 6 8 10 12 14

Cambridge

Chelmsford

Bedford

Peterborough

HemelHempstead

Luton/Dunstable

Watford

Eastern availability rate

6.0

7.3

12.0

8.8

7.2

3.0

5.7

Availability rate

Take-up

Availability

Rents

Key deals by size


Eastern

Peterborough

Cambridge

Chelmsford

Luton

St Albans

Hemel Hempstead

Watford

Luton/Dunstable

Bedford

Cambridge

The availability rate in the Eastern region remains the lowest across the UK at 5.7% of built stock.

South West

0

2,000

4,000

6,000

8,000

10,000

12,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

20112010200920082007

Availability


Poole/BournemouthPlymouthExeterSwindonBristol

0

1

2

3

4

5

6

7

8

Rents

South West availability rate

0 2 4 6 8 10 12 14

Poole/Bournemouth

Exeter

Bristol

Plymouth

Swindon 13.0

9.8

8.4

5.7

9.1

Availability rate

Take-up

Availability

Rents

Key deals by size


South West

Bristol

Swindon

Plymouth

Exeter

Bristol

Swindon

Plymouth

Exeter

Take-up remained below the five year average for the region for the third year in a row.

0

2,000

4,000

6,000

8,000

10,000

12,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

20112010200920082007

Availability


DerbyNottinghamLeicesterRugbyW’boroughDaventryNorthampton

0

1

2

3

4

5

6

7

Rents

0 2 4 6 8 10 12 14 16 18

Wellingborough

Rugby

Leicester

Derby

Northampton

Daventry

Nottingham

East Midlands availability rate

10.3

12.1

6.0

8.3

9.2

13.8

10.0

Availability rate

Take-up

Availability

Rents

East Midlands

Key deals by size


East Midlands

Northampton

Rugby

NottinghamDerby

Leicester

Northamptonshire/Rugby

Leicester

Nottingham/Derby

Availability stood 7.5% higher than the comparable figure in 2010.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

20112010200920082007


Take-up

Grade B/C Grade A

0

10,000

20,000

30,000

40,000

50,000

60,000

20112010200920082007

Availability


Stoke on TrentBurton on TrentCoventryBirmingham

0

1

2

3

4

5

6

Rents

0 5 10 15 20 25

Burton on Trent(East Staffordshire)

Birmingham

Coventry

Stoke on Trent

West Midlands availability rate

10.6

11.5

6.6

15.8

Availability rate

Take-up

Availability

Rents

West Midlands

Key deals by size


West Midlands

Birmingham

Burton upon Trent

Stoke-on-Trent

Coventry

Worcester

Birmingham Staffordshire

Coventry/Warwickshire

Despite a slowdown in activity, take-up was 25% ahead of the five year average.

0

2,000

4,000

6,000

8,000

10,000

12,000

20112010200920082007


Take-up

Grade B/C Grade A

0

10,000

20,000

30,000

40,000

50,000

20112010200920082007

Availability


0

1

2

3

4

5

6

WakefieldLeedsBradfordHullSheffieldRotherhamDoncaster

Rents

0 2 4 6 8 10

Wakefield

Rotherham

Doncaster

Bradford

Hull

Sheffield

Leeds

Yorkshire & The Humber availability rate

8.7

5.7

9.3

7.2

9.4

9.4

2.0

Availability rate

Take-up

Availability

Rents


Key deals by size



LeedsBradfordHull

Sheffield

Wakefield

York

Doncaster

West Yorkshire & Humberside South Yorkshire

There is a recognisable shortage of grade A distribution space in West Yorkshire.

North West

0

2,000

4,000

6,000

8,000

10,000

12000

14,000

16,000

20112010200920082007


Take-up

Grade B/C Grade A

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

20112010200920082007

Availability


CreweWarringtonLiverpoolManchester

0

1

2

3

4

5

6

7

Rents

0 2 4 6 8 10 12

Manchester

Crewe/Winsford

Liverpool

Warrington/Runcorn

North West availability rate

6.0

10.3

11.7

6.9

Availability rate

Take-up

Availability

Rents

Key deals by size


North West

Manchester

Warrington/Runcorn

Liverpool

Greater Manchester Liverpool/Merseyside

Warrington/Runcorn

The tightening market for grade A space has pushed prime rents across the region higher.

North East

0

1,000

2,000

3,000

4,000

5,000

20112010200920082007


Take-up

Grade B/C Grade A

0

4,000

8,000

12,000

16,000

20,000

20112010200920082007

Availability


0

1

2

3

4

5

6

Middlesbrough/StocktonDarlingtonSunderland/Washington

Newcastle/Gateshead

Rents

0 2 4 6 8 10

Sunderland/Washington

Newcastle/Gateshead

Middlesbrough/Stockton-on-Tees

Darlington

North East availability rate

6.9

6.9

9.2

7.0

Availability rate

Take-up

Availability

Rents

Key deals by size


North East

Newcastle upon Tyne/Gateshead


Darlington Middlesbrough/Stockton-on-Tees

Newcastle/Gateshead


Darlington

Middlesbrough/Stockton-on-Tees

The overall availability rate in the North East stands at 9.1%, up from 8.9% at the end of 2010.

Wales

0

1,500

3,000

4,500

6,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

20112010200920082007

Availability


0

1

2

3

4

5

6

SwanseaNewportCardiff

Rents

0 5 10 15 20

Newport

Cardiff

Swansea

Wales availability rate

10.5

8.9

19.2

Availability rate

Take-up

Availability

Rents

Key deals by size


Wales

Cardiff

NewportSwansea

Cardiff/Newport Swansea

The amount of available stock on the market reduced, the first contraction in availability in five years.

Scotland

0

2,000

4,000

6,000

8,000

10,000

20112010200920082007


Take-up

Grade B/C Grade A

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

20112010200920082007

Availability


0

1

2

3

4

5

6

7

FifeEdinburgh/LothianGlasgow/West of Scotland

Rents

0 5 10 15 20

Fife

Glasgow/West of Scotland

Edinburgh/Lothian

Scotland availability rate

17.5

19.1

14.1

Availability rate

Key deals by size


Take-up

Availability

Rents

Scotland

GlasgowEdinburgh

Edinburgh and Lothian Glasgow

Take-up was 38% higher. The highest level of activity recorded since 2006.

Details of Lambert Smith Hampton can be viewed on our website www.lsh.co.ukDue to space constraints within the report, it has not been possible to include both imperial and metric measurements.

© Lambert Smith Hampton February 2012.

www.lsh.co.uk

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National Industrial and Distribution Market 2012

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2 APPENDIX

Letter from Wildlife Matters

Nick Yandle, Group Chief Executive, Gallagher Group, Leitrim House, Coldharbour Lane, Aylesford, Maidstone, Kent, ME20 7NS

11th June 2012 Dear Mr. Yandle, RE. YOUR SITE SOUTH OF JUNCTION 8, M20. TQ825543 Regarding the large field to the east of Old Mill Lane and west of the Great Danes Hotel, this is to confirm that the current land use is for intensive horticulture (growing rows of raspberries). The field has a history of arable usage, and this year it was entirely ploughed to prepare the soil for crops. On-line imagery confirms its arable land use. Wildlife Matters are in the process of assessing the ecology of the field, and can confirm that there are no EU or UK protected species within the main body of the field. Although the site has two adjacent major water bodies, off-site, to the east and south, it has been recently confirmed by Dr. Lee Brady that these do not appear suitable to support EU protected Great Crested Newts (GCN) and so it is unlikely that there are any GCNs on site. For the avoidance of doubt about 96% of the site is species-poor and devoid of any significant biodiversity features, as might be expected for a working agricultural field, so there are many opportunities for enhancement and sustainable development.

There are, of course, the common reptiles, such as slow worms, common lizards and grass snakes around the perimeter of the field (the remaining 4% of the site), and these, as part of any development can be conserved in situ following appropriate conservation mitigations that do not need licence approvals. These reptiles are also present along the marginal areas of the field, for instance along the wide slopes along Old Mill Lane, and the wide verges that abut the site from the feeder roundabout between the site and Junction 8. In these places the reptiles share the linear corridors provided by today’s infrastructure, and can be accommodated with all developments on both public and private lands where they occur. If you have any queries, please let me know. Yours sincerely, John Dr. John Feltwell

MAIDSTONE’S CORE STRATEGY: SELECTING THE RIGHT LOCATIONS ...

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