Employment space: where is it going to come from?

Next week we’ll be exploring the stories behind some of the latest developments in the city, at the launch event of ‘Major Developments’. The Preston Barracks, Brighton i360 and Black Rock developments will be the focus of the first event, held in the Founders Room of Brighton Dome on Tuesday 30th June, 5.30 – 8.00pm. We asked Chris Oakley, Executive Chairman of Oakley Commercial, our sponsors for the event, to give his view on employment space in the city. 

Why is there a lack of employment space in Brighton at the moment?​ 

The normal answer is because we are locked between the Sea and the Downs and there is not enough land, but I don't buy this. When we talk employment space we are really talking offices and manufacturing space. The real problem is that we need to re-think our whole employment land strategy. I accept certain businesses have to be centrally located, but many businesses would be better suited closer to the outskirts of the City with good access to the A23, this would open up more opportunity in town centre locations. You have to cater for the market or lose out. This is why through the 1990's we saw a massive exodus of manufacturing up the A23 to Mid Sussex, as land was released there with good A23 access and the market responded by moving to where business wanted to be. Another issue is the Council are sitting on some key sites, such as Patcham Court Farm at the junction of the A23/A27, which could be released as business space. Rents are starting to rise at last so employment space development is becoming more viable, but it is still a very risky form of development on a completely speculative basis and without more valauble uses to subsidise it.

How big is the problem? 

Getting bigger! The market is working against business space at present, as alternative uses such as residential and student accommodation are more valuable in central locations. These sites can be brought forward with a sensible approach to planning, let them be truly mixed use, but the Council must accept the developers can't deliver it all on one go. If they have to build employment space, then relax the requirement for affordable housing on schemes which include employment space. To get things moving the planners need to interpret planning policy with more flexibility.

Are there opportunities to create office space, and if so where? 

It can be delivered in mixed use developments, where higher value uses assist viability, but we must look to where business needs to be in the long term, which is more accessible to the A23 for staff and customers, otherwise we will lose out to other areas.

What do businesses in Brighton look for in employment space? 

We have a drastic shortage of Grade A Office space for the larger companies that we want to retain in the City or encourage to move in. Parking and moving around the City is a massive issue for employers, another good reason to look at the outskirts! Brighton's creative employers are also looking for inspirational space and we are seeing some niche developers react to this and securing premium rents for 'funky' office spaces, so it's important for property owners and developers to understand the market for business space in the City.

Looking further ahead, where is the market going? 

It’s definitely becoming more niche in the office sector, occupiers want more creative workspaces that inspire staff and provide a good quality working environment. Permitted Development Rights, which expire in May 2016 and have allowed offices to convert to residential, apart from in excluded areas of Brighton, have had an impact. This has pushed rents up as less space has been available, so tenants and property owners have had to be more creative. But rents were at a very low level for the City, so it has now made offices a much more desirable investment and developers are now encouraged to include office space in their schemes, as they will get a return. The manufacturing sector has in my view all but packed its bags and left the City some years back. Most of the industrial space we now let tends to cater for storage and distribution users who serve the City.

Do you think there is too much focus on residential development in the city? 

We have many big problems in terms of a limited amount of land, but a lot of people wishing to both work and live here. In my view a balance can be struck, but the buck stops with the City Council, who are responsible for allocating the use of land, encouraging investment in the City and as probably the largest land owner, bringing land forward for regeneration. As such, they have to work with markets, plan ahead, encourage investment and most importantly lead rather than follow, as otherwise they will never catch up.

To find out more about the Major Developments event, click here. 

Thank you to our sponsor Oakley Commercial. Oakley are one of Brighton & Hove's leading commercial and residential property consultancy. They offer a range of estate agency and letting, professional, valuation, property management and land and new homes services, and are at the forefront of advising on major projects within the city.

If you want to contribute to the Chamber blog, contact us on hannah@brightonchamber.co.uk