Employment Land Study Update Report

Transcription

1 Update Report DTZ Marchmount House Dumfries Place Cardiff CF10 3RJ

2 Contents Page 1 Introduction 1 2 Study Approach Report Structure 2 3 Background and Policy Context Policy Context Summary 7 4 Market Context National Market Overview Regional Office Market Torfaen County Borough s Office Market Summary Recent Industrial Market Trends Regional Industrial Market Torfaen County Borough s Industrial Market Summary 19 5 Existing Portfolio Analysis Employment Land Allocations Additional Employment Land Employment Land Take Up Analysis of Existing Business Parks and Industrial Estates Analysis of Unimplemented Employment Allocations Analysis of Potential New Allocations Summary of Supply 25 6 Demand Economic and Employment Land Forecasts Regeneration Proposals in Cwmbran Gap Assessment 30 7 Supply Analysis Addressing the Forecast Requirement Accommodating the Displaced Businesses Summary 38 8 Conclusion Market Overview Future Trends Future Land Requirement Supply Portfolio of Sites Accommodating Displaced Businesses Future Role of Cwmbran Recommendations 42

3 Appendices I II III IV Existing Industrial Estates and Business Parks Assessment Summary Unimplemented Employment Land Allocations Assessment Summary Potential New Employment Allocations 2003/04 Assessment Summary Potential Brownfield Site Opportunities Assessment Summary

4 1 Introduction Torfaen County Borough Council (TCBC) has appointed DTZ to update the Employment Land Study (2006) in light of a number of significant changes since that time. This report updates the forecast demand for employment land in Torfaen up to 2021 in light of the recession, proposed redevelopment and regeneration in Cwmbran and re-assesses the suitability of the proposed employment land allocations in the emerging Local Development Plan (LDP). Significant regeneration is planned for Cwmbran Town Centre which will have important consequences for the displacement of existing businesses and the provision of new employment space in Cwmbran. More is now known about the implications, with CBRE having completed reports assessing the potential of the Eastern Strip Central area. We have therefore, revisited the land supply and recommendations for Cwmbran. This report presents the findings of our research and draws together the conclusions. In completing the above exercise, the following tasks have been undertaken: A review of the national and regional industrial and office property markets, identifying implications for the future provision of space within the County Borough; A review of the industrial and office property markets in the County Borough, identifying key trends in terms of type and location of units/sites in demand; A critique of existing forecasts for employment land requirements in the County Borough; The identification of future demand for employment land by undertaking a forecasting exercise of the future level and nature of demand for employment land up to 2021, including any additional demand created by businesses displaced by regeneration efforts in Cwmbran Town Centre; A strategic overview of current supply against future demand; and Identification of a new portfolio of sites. 1

5 2 Study Approach In line with the recommendations of the guidance note commissioned by the Office of the Deputy Prime Minister (ODPM), Employment Land Reviews Guidance Note (2004), our approach combines both a qualitative and quantitative method in assessing the current supply and future need for employment land within Torfaen. Our approach has included the following: Market Appraisal The first stage of the study involved an assessment of the industrial and office markets at the national, regional and Torfaen levels. This assessment has drawn on a number of data sources including: DTZ in-house market knowledge; Consultation with commercial agents; and Local Authority data and Welsh Assembly Government data Employment Modelling Following the market assessment, an economic modelling exercise was undertaken, using Cambridge Econometric data. The forecasts have been used as a basis for projecting the demand for employment land to In addition, a review of past take up has also been undertaken. This modelling has been has been subject to self-analysis and re-consideration in light of the recession and downturn in the property market. We have also considered the impact of regeneration proposals in Cwmbran Town Centre upon the demand figure identified by the modelling undertaken and the potential need for additional land to accommodate any businesses displaced by the regeneration proposals Supply Audit A critical review of the existing supply of employment sites has drawn on information provided by the planning policy/ economic development departments, discussion with commercial agents and our in-house knowledge, and site inspections Portfolio Analysis This final exercise has identified the existing portfolio of sites and any issues which need to be addressed with the allocations. Recommendations on planning policies have also been made and in particular the future employment role of Cwmbran. 2.2 Report Structure Our report is structured as follows: Section Three provides a background and policy context to this Employment Land Study; Section Four contains an appraisal of the office and industrial markets at the national, regional and Torfaen levels; Section Five analyses the existing portfolio of employment land; Section Six provides a summary of the forecast level of employment up to 2021 and hence the requirement for additional employment land and assesses the gaps between the existing stock and the forecast demand; Section Seven analyses the key land supply issues and changes, with particular reference to Cwmbran, and; Section Eight identifies and justifies the proposed new employment allocations and sets out the future employment role of Cwmbran. 2

6 3 Background and Policy Context TCBC is required under Section 6 of the Planning and Compulsory Purchase Act 2004, and the Town and Country Planning (Local Development Plan) (Wales) Regulations, to prepare a LDP which will illustrate how Torfaen s future need for new jobs, homes, community and transport facilities will be met, whilst also adopting sustainable principles. In response to this requirement, TCBC is currently preparing the LDP for This will establish the planning framework for the County Borough until The LDP Deposit is currently being prepared and due to be published for public consultation in Spring A key role of the LDP will be to provide opportunities for investment, economic development and to increase the quality and quantity of jobs within the County Borough. This is essential to grow the local economy and raise the standard of living in the area but has to be undertaken in a way that is consistent with the principle of sustainable development and the need to protect and enhance the environment. Throughout the LDP preparation process, employment allocations compete with other land uses including residential, retail and leisure uses, which offer higher land values for suitable sites. The problem of providing suitable employment sites is becoming increasingly more difficult as the demands of modern occupiers alter. Traditional employment sites are often no longer suitable for modern employment uses because of changing requirements in terms of specification and location. Modern occupiers demand prestigious sites in high quality easily accessible locations. Throughout the LDP process TCBC must ensure that suitable and sufficient land is provided for existing employment sectors and to promote the development of the emerging and growth sectors, to safeguard employment opportunities and ensure local economic prosperity. The aims of this study are therefore to: Provide a comprehensive economic assessment of future employment land needs in the County Borough; Determine Torfaen s regional and sub-regional role in capturing mobile economic investment and the potential to diversify local opportunities; Assess the suitability of current and potential future employment sites to meet the identified needs and which can also be defended through Planning Inquiry; and Assist in the preparation of appropriate future employment policies and proposals in the emerging LDP. 3.1 Policy Context People, Places, Futures - Wales Spatial Plan 2008 Update The Wales Spatial Plan Update, published in 2008, sets out the national planning guidance for Wales. The Plan s guidance on economic development states that: We need an innovative, high value economy for Wales which utilises and develops the skills and knowledge of our people: an economy which both creates wealth and allows that prosperity to be spread throughout Wales: an economy which adds to the quality of people s lives as well as their living and working environments. Each area of Wales has its own distinctive response within the Spatial Plan to assist in achieving the national vision. South East Wales is identified as: An innovative skilled area offering a high quality of life international yet distinctively Welsh. It will compete internationally by increasing its global visibility through stronger links between the Valleys and the coast and with the UK and 3

7 Europe, helping to spread prosperity within the area and benefiting other parts of Wales. The South East of Wales has many employment opportunities, including knowledge-based opportunities. The area benefits from the presence of a number of higher education and further education facilities, with Cardiff University identified as playing a major role in providing employment opportunities and attracting and retaining talent to the area. The South East of Wales is also identified as having the ability to operate a successful cityregion model. The success of this model depends on the ability of Cardiff to develop its capital functions, the surrounding towns and areas to successfully complement Cardiff s growth Planning Policy Wales (4 th Edition 2011) With regard to ensuring a supply of employment land paragraph states that local planning authorities should ensure that: sufficient land suitable for development for enterprise and employment uses and well served by infrastructure is designated for employment so as to meet both identified and as yet unidentified needs; and that new development for enterprise and employment uses is located and implemented in accordance with sustainability principles. The typical method to ensure that suitable land is provided is to identify individual sites in a local planning authority s development plan. Paragraph advises that: Key employment locations (key sites) should be selected in line with sustainable development principles, with preference for the use of previously developed land, proximity to existing urban developments, good accessibility to the public transport and primary road network and good quality telecommunications. Our assessment of sites has taken the above factors plus other issues into consideration. Planning Policy Wales also supports the role of town centres for employment use and the ability of a mix of uses in town centres to create vibrancy South East Wales Development Strategy This strategy outlines the comprehensive vision for the area as: A region on the way to becoming one of the most prosperous in Europe, and providing opportunities for every individual, enterprise and community to share in that prosperity. The strategy identifies the key features that influence the economy of the South East of Wales. These include: High rates of joblessness; Lower GDP per head than other European regions; Higher population densities than the Welsh average; High economic growth in the coastal plain; and Topography often-constraining development potential. Taking the above into consideration, the Development Strategy for South East Wales aims to realise the economic vision through: Developing strong links to the high-growth, high-innovation and knowledge economies of Europe; 4

8 Seeing the emergence of a limited number of key sectors and innovative firms within 10 years of the Spatial Plan; Business services, tourism and manufacturing becoming key sectors of the future; Using the region s university and research establishments to encourage research talent to locate into the region; Improved levels of qualifications among adults; and Cardiff being regarded as a true European capital, with an international reputation and outlook Five Counties Regeneration Framework 2002 The Five Counties Regeneration Framework was prepared in February 2002 and sets out a clear direction to achieve economic growth and regeneration in the counties of Blaenau Gwent, Caerphilly, Monmouth, Newport and Torfaen. The vision identifies four principles to guide decision-making. These are to: Create a sustainable knowledge-based economy; Establish an integrated and well connected sub-region; Build a lifelong learning culture; and Re-establish our towns as centres of economic activity. The Framework identifies that whilst there is a considerable quantity of industrial land within the Five Counties region, the area suffers from a lack of high quality sites and premises that are suitable for the modern occupier. The problem is further enhanced by a proportion of the employment land supply not being readily available for development. The Framework identifies a 5-year development programme and a selection criteria for priority sites and premises which has particular regard to: Maximising the economic potential of the sub-regions most competitive locations, without compromising sustainability objectives; Improving the existing supply of sites and premises; Meeting the needs of expanding industries already located within the sub-region; Facilitating the growth of the knowledge economy; and Improving the quality of the property offer in areas north of the M4 corridor. The development programme identifies: The need for a single flagship business park; Key existing development proposals; Office provision on key sites; Industrial/ business space provision; A modernisation/ management scheme to upgrade existing business and industrial premises which will include Llantarnam, Springvale, Pontnewynydd, Gilchrist Thomas, South Pontypool / Polo Grounds and Avondale industrial estates; and A network of key strategic sites. The following development targets were identified in the Framework for Torfaen during the plan period (until 2007): To develop 1,390 sq.m (14,962 sq. ft) of new office accommodation within Cwmbran Town Centre; To develop 1,860 sq.m (20,021 sq.ft) of new office accommodation in Pontypool at Clarence Corner; To develop 1,390 sq. m (14,962 sq. ft) of mid-range business and industrial accommodation in Llantarnam; 5

9 To develop 2,780 sq.m (29,925 sq. ft) of mid-range business and industrial accommodation in Mamhilad; and To develop 1,390 sq. m (14,962 sq. ft) of small business and industrial accommodation at Gilchrist Thomas Industrial Estate. The Framework also identified the following five strategic employment sites within Torfaen: Llantarnam, Cottage Farm/ Malthouse Lane (20.23 Ha) Mamhilad Technology Park (9.3 Ha) Uskvale, Pontypool (5.7 Ha) Craig-y-Felin (16.2 Ha) Blaenavon (8.9 ha) Craig-y-Felin is identified as a strategic site with the greatest potential for securing future high quality employment in Torfaen. In terms of the wider region, the Framework outlines the preferred growth scenario, which places Newport as the growth engine for the Five Counties sub-region. It states that by 2011, Newport could be a major office and retail centre, attracting up to ten new information services companies, who will employ over 3,000 people. The aspiration is for Celtic Springs, Old Town Docks, and Cleppa Park to have become successful business parks. The result of the increased business activity in Newport will be a growing population, which is fuelled by the young population in Newport staying within the City, rather than moving away, and purchasers finding homes in Newport of exceptional value for money. The Newport Growth Strategy Economic Forecast (2003) supported the view that Newport will be the regional growth centre for the Five Counties region stating that as Newport becomes established in its new City status it is anticipated to build on its current role as a regional centre for the Gwent Valleys. Whilst Newport is expected to be the growth machine for the Five Counties, the preferred growth scenario will see significant growth for Torfaen. This will be fuelled partly due to the success seen in Newport. The aspiration is for the Craig-y-Felin site to be developed and fully occupied. Commercial properties in Torfaen will have rising rents and capital values, including those which are in areas that are located significantly away from the M4 such as Mamhilad Commercial Assessment of Cwmbran Town Centre Expansion- Eastern Strip Central 2011 CBRE prepared a report in 2011 to assess the commercially viable land uses, which could be accommodated in the area defined as the Eastern Strip Central. The findings of the report will be used by the Council to inform the allocation of the site in the Deposit LDP. CBRE identify that Cwmbran Town Centre has the potential to be an attractive office location, despite being a secondary office location with little stock available. Cwmbran can offer potential cost savings for occupiers who are flexible in terms of location and the Centre benefits from good connectivity and amenities offered by Cwmbran Shopping Centre and the location of the bus and train stations for example. The possible location of new offices for TCBC and Gwent Police in the town could stimulate development activity and in the long-term, act as a catalyst in attracting other office occupiers and also contribute to the enhancement of the economic viability of the Town Centre. The report identifies that the supply of in-town office accommodation, is dated and poor in terms of quality. CBRE also identify that it is questionable as to whether this office space, once vacant, would be viable for refurbishment to meet modern requirements. The lack of 6

10 quality Grade A supply, available sites and new stock has deterred occupiers from coming into the Town Centre or registering enquiries for Cwmbran. Without high quality new office space within the Town Centre to boost the supply side, it is unlikely that any significant office enquiries will be converted into delivery of new office development. In terms of uses, an office core is envisaged for the Eastern Strip Central. CBRE suggest that the creation of a new in-town office park would create an identity for Cwmbran and secure an economic base for the future. It is recognised that this type of product would compete with Llantarnam Park. 3.2 Summary The above policy guidance and strategies identify the importance of having an adequate supply of employment land in Torfaen to assist the local economy in its growth. The emerging LDP will be an important tool in ensuring that an appropriate and adequate supply of land is available within Torfaen to ensure that economic policies can be implemented and that economic growth ensues. It is evident that Cwmbran has an increasingly important employment role in terms of ongoing development at Llantarnam Park, the future location of employment land and the redevelopment proposals for Cwmbran Town Centre. 7

11 4 Market Context The Market Context (as at February 2010) establishes the key factors affecting the office and industrial markets nationally, regionally and within the Torfaen area. The trends identified and key characteristics of the local market set the context within which growth will need to be accommodated and will therefore, inform policy. It is well documented that the service sector is forecast to grow, whilst the manufacturing sector is forecast to decline. However, within the industrial sector certain sub-sectors are forecast to grow, whilst many of the more traditional sectors are forecast to decline. The changing nature of the office and industrial sectors is altering the sites and premises requirements of potential occupiers. This is creating a mismatch between the supply of sites and the demand as detailed below. The credit crunch and subsequent recession has clearly had a significant impact on the property market since the previous study in The market context considers the impact and implications of the recession on the current and future property market. 4.1 National Market Overview The Office Market Until relatively recently, the demand for office space has been relatively high throughout the UK with the continued growth of the service sector. A seemingly stable UK economy and an improving financial market were the main factors for the strong performance of the office sector in the UK during 2006 and most of During this period of growth, legal, financial and professional firms, and the public sector fuelled the demand for office space. This was in part due to the Lyons Report on the relocation of Government offices from London and the South East. During the last eighteen months, however, there has been a major fall in demand for office accommodation, a fall which was been led by the central London market. There has been a significant fall in demand in the UK as a whole and rental values have been driven down by the decline in demand. Businesses across the UK have scaled back their operations to reduce costs. Continuing and sustained deterioration in business activity, therefore, will result in further rationalisation and is likely to lead to a net release of floorspace in However, it is anticipated that 2010 will begin a period of stabilisation and longer term recovery. It is suspected that there may be a lot of churn during the economic recovery as businesses consider their own recovery strategies and look to take advantage of the fall in rental values when their pre-recession leases expire. In terms of the type of product which has been in demand over the last five years, changing working patterns have meant that developers have had to bring forward increasingly innovative formats to satisfy occupier demand. Advances in ICT have promoted the growth of home working and hot-desking. Whilst hot-desking has not significantly influenced the general quantum of space required, it does influence the format of that space. Demand for new schemes has fallen in the last 18 months and developers have been finding it difficult to raise the necessary finance to fund new developments. New accommodation will therefore be scarce in the short term and, on the whole, evidence suggests that increases in supply have been attributed to the availability of second hand space rather than the development of new schemes. 8

12 4.1.2 Demand Drivers for Office Space Whilst the demand for office accommodation has been affected detrimentally by the current economic situation, the demand which does exist and that which will return in the medium term will be influenced by: Decreasing space requirements through company rationalisation, new technology and improved communications; The globalisation of markets providing service sector companies with increasing flexibility over location; Lease structures becoming more flexible and diverse to cater for the growing SME market and long term uncertainty; Growth in demand for owner-occupation from some smaller businesses, particularly to benefit from pension allowances; The growth in the virtual organisation with ICT advancements allowing outsourcing of business functions such as payroll, customer billing, banking activities and basic procurement is increasing; Call centre and other back office functions increasingly being relocated overseas (although there is some anecdotal evidence of this trend reversing); The emerging sustainability agenda and green technologies sector; and The growth in the serviced offices market. The impacts of the above vary between different sectors, and will affect the level and nature of demand for office space. The changing nature of demand within the office market is altering the requirements of potential occupiers. These drivers and the extent to which sites fulfil demand will become increasingly important in the next couple of years because firms looking to expand or relocate will find themselves with a greater choice of supply with more affordable and flexible lease terms. Even before the recession, unsuitable, dated premises had become hard to let, creating a mismatch between the supply of premises and demand. This trend is reflected in many areas of South East Wales and Cardiff in particular, where pre-recession, there has been an undersupply of high-quality, modern office space. Modern occupiers, especially high value occupiers, are interested in prestige developments in prestige locations. The traditional office market in towns and cities often does not fulfil this requirement, which again creates a mismatch between supply and demand. The lack of prestige premises can therefore create an economic disadvantage for towns, cities and regions and this is currently true of Cwmbran town centre. High value occupiers will look for premises with characteristics that include: High accessibility; High quality specification; Good communication linkages ICT, access to universities; High quality landscaping and infrastructure; Prestige location; and High quality surrounding environment. In terms of space requirements, there has been a general shift from large requirements fuelled by inward investment projects, to a greater demand for smaller offices fuelled by indigenous business start-ups and business relocations / expansions. Flexible accommodation, serviced offices, virtual office assistants and shared reception and meeting areas are pushing down space requirements. 9

13 4.2 Regional Office Market Within South Wales, the commercial office market is focused on the Capital City of Cardiff and along the M4 corridor. This area has experienced significant growth in its office stock over recent years. Prior to the recession there was a shortage of grade A office space in Cardiff, as much of the stock is centred on the Newport Road area and is older, second hand stock. The acknowledged office area has now shifted its focus closer to the rail station more recently, where Grade A stock was built. Schemes conceived and implemented prior to the recession included phase 2 of Callaghan Square which broke the 20 per square foot barrier for the first time in Cardiff and Fusion Point II. The economic climate has caused development to stall but if all the schemes proposed in Cardiff at 2006 were successfully developed, this could place an additional 102,190 sq.m (1.1 million sq.ft) of office accommodation on the market. The out-of-town office market in Cardiff was very healthy prior to the recession, with good levels of occupier activity at key sites such as Cardiff Gate, St. Mellons and Green Meadow Springs business parks. However, the level of demand from inward investment occupiers with large requirements has fallen due to the increasing globalisation of markets and the current economic climate. However, whilst take up has declined modern out of town office space remains an attractive product and opportunity to those occupiers still in the market. Outside of Cardiff, business parks have developed along the main arterial routes including the southern sections of the A470 and at junctions on the M4. Pre-recession schemes in South Wales include the development of office space at SA1 Swansea (Cyprium), Talbot Gateway, Port Talbot (4,000 sq. m.), and The Pavilions, Cwmbran (2,884 sq.m). Newport and Swansea have increasingly emerged as popular office locations in this decade, particularly as a result of the lack of space in Cardiff, proximity to the M4 and previous grant funding opportunities. The office market within Newport continues to be dominated by the out-of-town market at the Celtic Springs Business Park and Langstone Business Park, both of which are located in close proximity to the M4. Rents in this location had reached per sq.ft by late 2007, fuelled by the lack of supply of in-town office provision. Current quoted rents are still similar, but rent free periods are being offered which reduces the overall cost. It is expected that the demand for office accommodation in Newport will encourage the development of office accommodation in Newport City Centre once the market returns. The recent George Street development in Newport City Centre was the first scheme in the City Centre for approximately 30 years. With Newport successfully acting as a regional growth centre, other adjacent local authorities such as Torfaen could benefit from investment. The dynamics of the office market were changing with smaller requirements becoming the norm and larger companies becoming less dominant prior to the recession. The fall in inward investment has meant that the office market in the region has been fuelled by regional indigenous businesses rather than foreign investment. The typical office requirement of an indigenous company is for space up to 464 sq. m. (5,000 sq. ft.), with freehold units popular at present due to the low rates of borrowing. Demand for units over 2, sq.m (25,001-50,000 sq ft), is usually required by the public sector, or for regional offices for national companies. It is predicted that this trend will continue when the market returns, but potentially not at pre-credit crunch levels in the short to medium term. One of the main features of the office market in South Wales outside Cardiff has been the demand for new offices from the public sector, including the Welsh Assembly Government, which continues to encourage public sector office requirements to focus on areas other than Cardiff. This has provided other areas within the region with the opportunity to attract large occupiers. Large-scale lettings in South Wales have included the Prison Service and Office of National Statistics in Newport, and Companies House in Nantgarw. However, 10

14 throughout the rest of South Wales, the office market in the smaller towns is predominately fuelled by demand from local professional firms and indigenous business expansion Current Stock and Age Figure 1 sets out the total stock of office space in Wales and Local Authorities in South East Wales, including Torfaen, at 2004 which is the most up to date information. The table shows that Torfaen has a higher than average proportion of its office stock that is pre However, it is likely that this proportion has reduced since 2004 as a result of the construction of relatively large office schemes, predominantly at Llantarnam Park, such as Lakeside Court, The Pavillions and the Springboard Innovation Centre. Figure 1: Current Age and Stock of Office Premises CURRENT STOCK SQ.M. CURRENT STOCK SQ. FT. % OF OFFICE STOCK PRE 1980 WALES 3,843,000 41,365, Blaenau Gwent 35, , Caerphilly 126,000 1,358, Cardiff 1,113,000 11,976, Merthyr Tydfil 63, , Monmouthshire 61, , Newport 231,000 2,490, Powys 121,000 1,305, Rhondda, Cynon, Taff 288,000 3,102, Swansea 399,000 4,299, Torfaen 121,000 1,306, Source: Local Authority Office Space: Commercial and Industrial Floorspace and Rateable Value Statistics (ODPM). 4.3 Torfaen County Borough s Office Market The commercial office market in Torfaen is centred on the southern area of the County Borough and particularly Llantarnam Park. The provision of offices in the town centres, such as Cwmbran, Pontypool and Blaenavon is generally occupied by local commercial firms. Much of the office market activity seen in recent years in Cwmbran has been on Llantarnam Park, off the A4042. More recent developments include The Pavilions (2,884 sq.m / 31,043 sq.ft) and the Torfaen Innovation Centre (2,601 sq.m / 28,000 sq.ft), which can accommodate up to 60 businesses. Much of the attraction of Llantarnam Park has been the availability of new modern office accommodation and generous parking ratios of around 1 space per 26 sq.m. (280 sq.ft.). Llantarnam Park is also easily accessible by road from Cardiff, Newport and the M4, via the A

15 4.3.1 Supply Analysing historic take-up and discussions with commercial agents confirmed that the demand for office space within Torfaen is concentrated in this location, with demand reducing as you move further north within the County Borough. Much of the office stock within Cwmbran Town Centre is located in Gwent House, Powys House and Pendragon House, within self-contained purpose built office buildings. However, these are becoming tired. Gwent Police headquarters and Torfaen and Monmouthshire Council s occupy large premises outside the Town Centre. A number of large individual office blocks are currently vacant and provide a significant amount of space. Vantage Point House is mostly let, but has planning permission for a 150,000 sq ft extension. Commercial agents have suggested that any new office development in the town centre needs reasonable car parking provision to have a realistic chance of achieving success. CBRE s Commercial Assessment of Cwmbran Town Centre Expansion Eastern Strip Central 2011, identified an insufficient supply of Grade A office accommodation in Cwmbran. Indeed, there is very little office accommodation in general in the Town Centre following the relocation of a number of occupiers previously occupying office accommodation on what is now the Asda supermarket site. The paucity of accommodation is also highlighted in the Council s Industrial and Commercial Property Register, October Office provision in Pontypool, Abersychan and Blaenavon town centres is largely secondary accommodation and located on the 1 st and 2 nd floors of buildings above retail units and provides space for small indigenous firms. Modern office units in the north of the County Borough are found within the Torfaen Business Centre and Victoria House, Blaenavon. Both buildings are located on the Gilchrist Thomas Industrial Estate. Units at this site provide accommodation for business start-ups. Office accommodation in the north east of the County Borough is confined to Mamhilad Park, but office units here are dated and of varying sizes. TCBC s office requirement has reduced significantly to between 15,000 20,000 sq ft and Gwent Police s office requirement is approximately 35,000 sq ft. Furthermore, public sector investment/occupation is considered crucial as a catalyst for private sector investment. Cwmbran does however have potential as an office location. But as a secondary location, it must secure the correct product. In their 2011 report CBRE refer to an in-town office park. This description seems to suggest medium density offices with the relatively generous car parking that DTZ and other market agents envisage may be successful in Cwmbran. High density office development with limited or no car parking is not likely to attract occupiers. Figure 2 summarises the current availability of office premises in South Wales and Torfaen. It shows that Torfaen has about 5% of the total office stock for South Wales. Figure 2: Current Stock of Vacant Office Premises at October 2009 VACANT FLOORPSACE VACANT FLOORPSACE (SQ (SQ FT) M) South Wales 3,443, ,908 Office Supply Torfaen Office 190,719 17,718 Supply Source: WAG Property Register In terms of available supply, as at October 2009 the Welsh Assembly Government property register indicates a total of 17,718 sq m (190,719 sq ft) of vacant office space, down about 20% from May 2006 when data from TCBC s Property Register indicated a total of 22,278 sq.m (236,809 sq.ft.) of available office space in Torfaen. 12

16 An Estates Gazette Property Link search (October 2009) of Cwmbran has revealed 6,432 sq m (69,230 sq ft) of vacant office space in Cwmbran. This is mainly concentrated at Pendragon House and Gwent House in the Town Centre and sites at Llantarnam Park. Pendragon and Gwent House are both outdated office blocks that are unpopular and unattractive to occupiers. The majority of the new built stock is to be found at out of town business parks in the south of the County Borough such as Llantarnam Park. Speculative schemes such as Lakeside Court at Llantarnam, which were commenced prior to the credit crunch have struggled to find occupiers. However, such development has delivered good quality out of town space and will prove popular over the LDP Plan Period when the market returns. 4.4 Summary The Torfaen office market has altered in line with national and regional trends, with a major downturn over the last 2 years. However, sites in the south of Torfaen, such as Llantarnam Park continue, to be relatively popular with occupiers who are looking for a more affordable location close to Newport, Cardiff and the M4. Areas in the north of the County Borough had been less popular with occupiers prior to the recession and this trend is likely to continue in the short term after the recession, particularly as occupiers will have a greater choice of space available. The proposals to regenerate Cwmbran Town Centre through developing office accommodation should be supported. If Torfaen is to attract high-value occupiers and better compete with other local authorities, the redevelopment of some dated office accommodation is required along with the development of modern office accommodation e.g. as part of the development of the Eastern Strip Central. This is becoming increasingly important as occupiers look to take advantage of the market drop and move to better quality space at a reduced cost. This trend is likely to accelerate when confidence returns to the market and firms look to forward plan their businesses. 4.5 Recent Industrial Market Trends Nationally, during the last decade the industrial sector has experienced difficulties. The performance of the industrial property market is directly linked to the performance of industry and over recent years it has reflected the recession in manufacturing and industrial output overall. An improvement in domestic conditions assisted national business confidence in the last quarter of 2006, which stabilised 18 months of decline in the industrial property market. The chemical, man-made fibres and metals manufacturing sectors performed strongly. Notwithstanding this, 2007 and the first half of 2008 saw sustained demand for new industrial accommodation which has still been required due to the changing nature of occupier requirements and the extent of dated stock within the industrial property portfolio. Since then however, the economic decline and recession has seen the demand for industrial space fall dramatically. The global and domestic recession is expected to continue in the short term and is likely to impact significantly on the UK Industrial sector into Reduced output and employment growth will have the effect of reducing demand for additional logistics and manufacturing space, in particular. Against this backdrop of reduced demand, there is a significant number of regional industrial markets that will be required to absorb a large amount of newly completed industrial floorspace. This is likely to further exacerbate downward pressure on rents in the short term. Over the medium term, a depreciating exchange rate is likely to provide support for the industrial sector, leading to an increase in demand for industrial space in the UK. The 13

17 upturn, which is forecast to begin in 2010, should bring new opportunities. Government and EU regulation and legislation may also bring about new opportunities. For example, rising land fill taxes and restrictions, the need to manage waste and the pursuit of green technologies such as waste to energy are generating very large space requirements for waste disposal/management companies High Value Sectors The industrial property market has altered significantly over the last 25 years, aided by the decline of the traditional manufacturing sectors, and the emergence of new manufacturing sectors. It is likely that the decline of the traditional sub-sectors of manufacturing will continue as lower costs can be achieved in other parts of the world, while some higher value subsectors within manufacturing have the potential for growth. These potential growth areas will have different requirements to those of the traditional industrial activities. These differing requirements will depend on a range of factors including skills and technology, which directly impact on requirements for sites and premises. Emerging growth sectors in the UK according to DTZ Research include: Food and drink; Textiles; Chemicals; Pharmaceuticals; Electronics; Automotive; ICT; Advanced Engineering; Green technologies and waste to energy; and Distribution. Due to the current economic climate, the likelihood of significant growth in any sector is limited in the short term. However, in the medium to long term the sectors are considered to have growth potential. The automotive industry has been hit very hard by the current economic climate, along with electronics. Food and drink and pharmaceuticals have fared slightly better. There are also signs that the distribution sector is experiencing difficulties due to falls in retail sales which were previously driving growth. The renewable energy/low carbon technologies industry is likely to emerge as a growth sector and employment generator in the next Plan Period Drivers of Demand for Industrial Space As stated above, the demand for industrial sites and premises varies by sector. The key UK market trends influencing the demand for industrial space include: Declining demand from manufacturing businesses; The impacts of the credit crunch and recession; Sophisticated supply chains; Large manufacturing processes requiring significant labour resources continuing to be relocated overseas; Flexible lease terms becoming the norm for contract-based occupiers; The continuing growth in managed workspace supported by the public sector; Growth in demand for owner-occupation from smaller businesses, particularly to benefit from pension allowances; 14

18 Technological advances improving the efficiency of manufacturing firms, reducing the amount of space they require; Growth in recycling industry including waste to energy; and Rail freight providing a long-term distribution opportunity in the UK. The above factors are changing the nature of the industrial market in the UK with traditional sectors declining and new sectors emerging. The new sectors tend to have different site and premises requirements to traditional occupiers, creating a general mismatch between the supply and demand of industrial premises. This is a major issue for the sector, with many older industrial premises and units becoming obsolete, both functionally and economically. Like the office sector, the nature of the sites / accommodation required by occupiers is mainly related to the function of the facility rather than the property sector. The key functions required of industrial property are currently: Research and Development; Light Manufacturing; Heaving Manufacturing; and Distribution. Figure 3 below summarises the function of space and site characteristics that are required to permit a function to operate efficiently. Figure 3: Function of Space and Site Characteristics FUNCTION FACILITY Research Development OF and Research and Development Light Manufacturing Light Manufacturing Light/Heavy Manufacturing Distribution Distribution Source: DTZ 4.6 Regional Industrial Market SITE CHARACTERISTICS Prestigious Site Proximity/linkages to University or Research and Development Centre Driven by University or Private Company Visual, high profile site Accessible High environmental quality Accessible High quality space Good communication linkages Lower environmental quality Accessible Accessible The national trend in the decline of the manufacturing sector has been mirrored in South Wales, which has seen a number of key business and unit closures in the past few years. The most noticeable closures have included the Sony plant in Bridgend (72,834 sq.m / 784,000 sq.ft), Panasonic in Cardiff (32,515 sq.m / 350,000 sq.ft), Diaplastics in Bridgend (28,799 sq.m / 310,000 sq.ft) and Hoover in Merthyr Tydfil. This decline has led to a considerable amount of vacant industrial space (around 6223,478 sq m/6,711,058 sq ft) in the region at October The vacant industrial land had gathered interest from a number of property speculators, who were purchasing the units with a view to undertaking refurbishment and subdividing, to produce smaller units to meet market demand. Key players in the refurbishment market 15

19 include Curzon Properties, PMG Developments, Dovey Estates, PH Properties and Garrison Barclay Estates. The decline in the market and lack of confidence in the manufacturing sector means much of this space remains vacant and this activity has almost completely ceased. The oversupply of existing industrial land in the regional market had been under increasing pressure to be redeveloped for alternative uses, particularly residential before the recession. Planning policy encourages local authorities to make a more rigorous examination of employment sites and locate a high proportion of development on brownfield land. This has led to former industrial sites such as the Pirelli site in Newport being allocated for residential use. This trend is likely to return as the economic climate improves as although the recession and mortgage availability have depressed the residential market, housing demand remains high compared to supply. There are signs that the large house builders are again looking to purchase sites in the region. However, residential values are not expected to return to 2007 levels for some time which may ease pressure to develop some industrial sites. The past 18 months has seen a dramatic fall in take-up of industrial space. Demand has been strongest along the M4 corridor, for units below 929 sq.m (10,000 sq.ft). As the market begins to stabilise and improve, there is likely to be a lot of churn as occupiers look to take advantage of the market opportunities and move to better quality accommodation on lease terms which may often be more favourable than those of their current accommodation. This means that primary locations are likely to recover first and we will see particularly healthy demand for good quality industrial space that meets modern requirements. The distribution sector has been the major growth sector in South Wales in recent years. Companies such as Aldi in Cardiff, Amazon in Swansea, Lidl in Bridgend, and Tesco and Wilkinson at Gwent Euro Park in Newport have opened regional distribution centres in a response to rising fuel prices, the European Union s working time directive and increasing congestion. The focus of the distribution sector in South Wales has altered from being located in Monmouthshire, to focusing in central South Wales. Much has been made of the success in attracting Amazon to Swansea and the potential role of South Wales to compete as a UK wide distribution centre. However, some market commentators consider Amazon a red herring because they currently use the Royal Mail for onward distribution so those costs are standard no matter which UK location they are in. Nevertheless the distribution market is expected to be an important sector after the recession. However, the future location of distribution facilities is expected to be increasingly related to access to rail and sea ports in the long term. Roads are becoming ever busier, and the use of rail and water to transport freight is being promoted through the direct application of grant schemes and infrastructure development, although to date, the use of water has been negligible Current Age and Stock Figure 4 summaries the total stock of factory premises in Wales, Torfaen and the surrounding authorities. The table shows that Newport has the largest stock of factory floorspace. The local authorities surrounding Cardiff have the highest levels of factory floorspace, due to the number of available employees, the proximity to major road networks and other historic factors such as land availability and public sector grants. Torfaen has significantly lower levels of factory floorspace (around 20% of Newport s offer). Figure 4 also demonstrates that South East Wales has a large proportion of factory stock constructed before 1980, when demands from industrial occupiers in relation to unit specification were significantly different. 16

20 Figure 4: Age and Current Stock of Factories CURRENT STOCK (SQ.M) CURRENT STOCK (SQ.FT) % OF STOCK PRE 1980 WALES 17,672, ,226, Blaenau Gwent 518,000 5,575, Bridgend 1,027,000 11,054, Caerphilly 1,293,000 13,918, Cardiff 1,082,000 11,646, Merthyr Tydfil 394,000 4,241, Monmouthshire 479,000 5,156, Newport 1,372,000 14,768, Powys 858,000 9,235, Rhondda, Cynon, Taff 1,270,000 13,670, Torfaen 273,000 2,938, Source: Local Authority Industrial Space: Commercial and Industrial Floorspace and Rateable Value Statistics (ODPM) Nationally, Wales has a lower amount of warehouse/general industrial floorspace than factory floorspace. Figure 5 demonstrates that the majority of warehouse floorspace is clustered in South Wales, particularly around the M4, and in the local authorities of Cardiff and Newport. The region has an ageing supply of warehouses, with the most modern stock located within Newport, such as Gwent Euro Park. Figure 5: Age and Current Stock of Warehouses CURRENT STOCK (SQ.M) CURRENT STOCK (SQ.FT) % OF STOCK PRE 1980 WALES 7,304,000 78,622, Blaenau Gwent 133,000 1,431, Bridgend 175,000 1,883, Caerphilly 370,000 3,982, Cardiff 780,000 8,396, Merthyr Tydfil 104,000 1,119, Monmouthshire 292,000 3,143,

21 Newport 587,000 6,318, Powys 388,000 4,176, Rhondda, Cynon, Taff 366,000 3,939, Torfaen 207,000 2,228, Source: Local Authority Industrial Space: Commercial and Industrial Floorspace ad Rateable Value Statistics (ODPM) Figures 4 and 5 demonstrate that the total stock of factories within Torfaen currently lies in the region of 273,000 sq.m (2,938,644 sq.ft), with the total floorspace of warehousing being 207,000 sq.m (2,228,000 sq.ft). Torfaen has the youngest stock of factory units amongst neighbouring local authorities, with only 36.6% of factory stock being constructed before 1980, but a third built before The supply of warehousing within Torfaen is significantly older, with 63.8% being constructed before Due to their age, specification and type of construction, many buildings within the current stock are reaching functional obsolescence. There is the opportunity for stock modernisation of existing units, making the properties more attractive but this is not the solution to attract modern occupiers. New developments will be required. 4.7 Torfaen County Borough s Industrial Market The industrial market in Torfaen has clearly been hit by the recession with less schemes being built and the amount of available space has increased compared to at However, in comparison to other Welsh authorities the market is considered to be relatively strong, especially towards the southern end of the County Borough, with Llantarnam Park to the south of Cwmbran acting as the focal point of the industrial/business park market. Whilst the recession has clearly impacted upon overall demand the location is popular with those still in the market. To the north of Pontypool, demand had been fuelled by indigenous business growth or business start-ups, locating in smaller units and this trend is expected to continue during the upturn. The stock of industrial premises throughout the County Borough is of varying quality and cost. The industrial market in Cwmbran is centred upon a number of industrial estates and areas including Ty Coch Way, Llantarnam Park, Somerset Road, Springvale Industrial Estate, Avondale Industrial Estate and Forgehammer Industrial Estate. Llantarnam provides a prestige location for industrial occupiers, though the location is aimed more at B1 users. Ty Coch Way consists of medium and large industrial units with reasonable access off Cwmbran Drive but the layout and character of the area and proximity to residential uses suggests that its development as an industrial location has been sporadic and evolved over a long period of time. The Eastern Strip Central area is adjacent to the Town Centre and consists of a very large unit occupied by ArvinMeritor. Springvale Industrial Estate in the Town offers small to medium sized units whilst Avondale and Forgehammer Industrial Estates provide typically smaller units occupied by businesses serving the sub-regional and local markets. In general, units within Cwmbran are tired and outdated. Speculative development which has been undertaken is mainly concentrated to the south of the Cwmbran, where demand is highest. Other local industrial estate schemes constructed in the County Borough before the recession include the Pavilions Industrial Estate in Pontynewydd, and the Abersychan Industrial Estate. The South East Wales industrial property market has been suffering as a consequence of the decline in manufacturing seen on a national scale. Smaller, indigenous, light manufacturing firms drive the industrial market in Torfaen. The demand from this sector is 18

22 4.7.1 Supply for smaller units, around ( sq.m / 2,000-3,000sq.ft). The so called industrial legacy sites such as Panteg Steelworks, and The British site, do not currently provide suitable accommodation for modern occupiers, but offer redevelopment opportunities to attract higher value occupiers. Indigenous firms are likely to remain the main source of demand during the plan period and even after the upturn the viability of previous redevelopment opportunities may be tenuous, particularly as high value occupiers will have more choice in primary locations. The development of the Heads of the Valleys Road to the north of Torfaen may create the opportunity for distribution warehouse development to occur on industrial estates around Blaenavon, and particularly the Kays and Kearns Industrial Estate. This could also act as a catalyst for the stock modernisation of the Gilchrist Thomas Industrial Estate. The Welsh Assembly Government Commercial Property Register (October 2009) indicates that there is currently 121,303 sq m (1,305,701 sq ft) of available industrial accommodation in Torfaen and 623,477 sq m (6,711,058 sq ft) in South Wales. About 19% of all vacant industrial space in South Wales is in Torfaen. Figure 6: Current Stock of Vacant Industrial Premises at October 2009 VACANT FLOORPSACE VACANT (SQ FT) (SQ M) South Wales 6,711, ,477 Industrial Supply Torfaen Industrial 1,305, ,303 Supply Source: WAG Property Register FLOORPSACE A search on Estates Gazette Property Link (October 2009) reveals about 57,309 sq m (616,874 sq ft) of vacant industrial space in Cwmbran, over half of the space in the entire Borough. Key sources of supply in Cwmbran include Llantarnam, Springvale Industrial Estate and Avondale Industrial Estate. Outside Cwmbran other key sources of supply are the Polo Grounds Industrial Estate, Mamhilad Park and Usk Valley industrial estates in Pontypool. 4.8 Summary The industrial market within Torfaen continues to change in line with national and regional trends. More recently, the recession has caused the fall of the industrial property market, as across the whole of the UK. Once the market returns the trends witnessed prior to the onset of the credit crunch are expected to continue. Modern occupiers require different types of site than traditional occupiers, with traditional manufacturing sites providing redevelopment opportunities. If Torfaen is to become home to higher-value sectors, and share in the success of surrounding local authorities including Newport, an appropriate range of sites and premises must be provided. This must involve the development of new sites, redevelopment of existing sites and stock modernisation. 19

23 5 Existing Portfolio Analysis The existing supply of employment sites in Torfaen has been analysed in detail. Our review provides a summary of the quantitative and qualitative attributes of the existing supply identified in the Local Plan for the County Borough of Torfaen , adopted July 2000 (The Local Plan) and potential new sites identified by the Council. 5.1 Employment Land Allocations To ensure that the growth of Torfaen s economy was not constrained by a lack of appropriate employment sites, a range of sites was identified throughout the County Borough. The sites allocated in the Local Plan were grouped into four categories, each of which has particular attributes for the industry that is proposed to be sited on it. The four categories are: Prestige industrial sites located in prime locations with good communications to the M4 motorway, characterised by their high quality of development and likely to attract B1(a) office development; High quality industrial sites located in attractive surroundings that are well positioned in relation to the county s principal road network; Local industrial sites located in close proximity to the primary road network, adjacent to existing settlements; Neighbourhood industrial sites located within the existing built up areas, within, or in close proximity to, residential areas. In terms of specific uses, prestige industrial sites are typically for high quality employment uses that fall primarily within class B1(a) for office. Some high quality research and development, technology or other knowledge based industries could also be accommodated at prestige sites. High quality industrial and local industrial sites are allocated for general industrial uses within classes B1, B2 and B8. Neighbourhood industrial sites are allocated for light industrial uses. The table below identifies the allocation of employment land by category and as presented in the Torfaen Local Plan. Figure 7: Torfaen Local Plan Employment Land Allocation ALLOCATION LAND ALLOCATED (HA) Prestige 62 High Quality 13.6 Local Neighbourhood 3.7 TOTAL Source: Torfaen C.B.C Local Plan (2000) The table clearly shows that of the 107 hectares allocated for employment use, almost 60% (62 hectares) is allocated for prestige employment use and that only 3.5% (3.7 hectares) is allocated for neighbourhood employment sites. Some of the allocated land has already been developed but 83.54ha remains undeveloped. This report considers the future contribution of the undeveloped allocated sites in terms of delivery and marketability and recommends whether the allocations should be rolled forward into the next LDP Plan Period. 20

24 5.2 Additional Employment Land TCBC previously identified a further 66.6 hectares of potential employment land in 2003/2004 that was not included in the Local Plan. The table below depicts the potential new allocations by the same categories as used in the preparation of the Torfaen Local Plan. Figure 8: Potential Additional Employment Land Allocations Identified 2003/3004 ALLOCATION LAND ALLOCATED (HA) Prestige 6.07 High Quality 35.7 Local Neighbourhood 0 TOTAL 66.6 Source: DTZ and Torfaen County Borough Council None of the potential new employment allocations were classified as neighbourhood employment land. The Council s search for potential new employment land allocations highlighted three factors. Firstly, the Council s belief that there was a need to provide additional allocations for high quality and local employment sites. Secondly, the fact that there was already a significant allocation of prestige employment land in the Local Plan and thirdly, that the majority of unallocated land within Torfaen County Borough was unsuitable for the development of prestige employment sites. 5.3 Employment Land Take Up Since 1991 when the Torfaen Local Plan was first put out to consultation, a number of allocated sites and segments of allocated sites have been developed. During the late 1980s and very early 1990s a significant amount of development took place at Llantarnam when the second phase of development was undertaken at Llantarnam Park. However, very little development was undertaken during 1993 and Consequently, it was not until 1995 that significant allocations in the Local Plan began to be developed. The table below highlights the take up of employment land between 1995 and 2008 in Torfaen County Borough. No new land was taken up in 2006/2007 and 1.35 hectares was taken up in 2007/2008. This consisted of unallocated land for Loseleys Ice Cream and Brecon Court, both at Llantarnam Park. Figure 9: Historic Employment Land Take-up in Torfaen Year Hectares Year Hectares 1995/ / / / / / / / / / / / / TOTAL Source: Torfaen County Borough Council Economic Development 2006 and

25 5.4 Analysis of Existing Business Parks and Industrial Estates A detailed analysis of the principal business parks and industrial estates located throughout the County Borough has been undertaken. A site assessment proforma for each location has been prepared which provides comments upon various criteria including land availability, vacant accommodation, constraints, market viability, vulnerability to change of use, proximity to road networks and general perception. All the site assessment proforma have been provided in a separate Technical Appendix. The following conclusions have been drawn from our analysis: Approximately 21.5 hectares of allocated developable employment land is available to be developed within the existing boundaries of business parks and industrial estates; In the region of 11.5 hectares of allocated developable employment land is available on high quality industrial estates and approximately 8.5 hectares is situated on local industrial estates; Employment development land on existing prestige industrial estates, including business parks is sparse throughout the County Borough. Whilst there is a considerable allocation of undeveloped prestige industrial employment land within the County Borough, virtually all of this land is outside the boundaries of existing estates. This is particularly the case at Llantarnam; Using the four definitions and categories of employment land as set out in the Torfaen Local Plan, the existing industrial estates and business parks have been assessed in terms of type. Our analysis has shown that there is only one existing prestige estate and that is Llantarnam. Throughout the County Borough there are seven high quality estates, 22 local estates and only two neighbourhood estates; There are no high quality estates located to the north of Pontypool and only six local estates, two of which are located at Blaenavon. All the County Borough s neighbourhood estates are located to the north of Pontypool; The majority of the high quality estate accommodation is located at Mamhilad. Many industrial locations in Cwmbran (Forgehammer, Forgeside and Avondale business parks) are in need of refurbishment. A summary of the advantages and disadvantages of existing business parks and industrial estates based on their suitability for employment use is enclosed at Appendix I. The conclusions, which can be drawn from this assessment, are summarised below: Cwmbran A high proportion of old accommodation is located close to Cwmbran Town Centre. Their lack of appeal to the current market is highlighted by the high vacancy rates on these estates i.e. Springvale, Somerset Road, Oldbury Road and Avondale Industrial Estates. These estates also suffer from poor road access due to their location in relation to the A4042(T). Forgehammer Industrial Estate can contribute to the redevelopment under the proposals for Cwmbran Town Centre. Forgeside Industrial Estate, together with the Somerset Road Industrial Estate can also make a similar contribution. Accommodation located in close proximity to the east of Cwmbran Town Centre is in the form of large manufacturing/factory units. Provision of office accommodation in Cwmbran Town Centre is poor in terms of quantity and quality of existing stock. Llantarnam Park is the only existing prestige location in Torfaen. The Park is very accessible, provides a pleasant working environment and benefits from good infrastructure. 22

26 Pontypool Current provision of employment estates north of Lower Mill is poor though vacancy rates are low. This indicates an under supply of such accommodation at this location. The majority of accommodation in this region requires refurbishment and vandalism is becoming an important issue. Pontnewynedd is an important employment area in this region. There is very little capacity in local industrial estates located south of Pontypool and New Inn. Blaenavon The local estates located at Blaenavon are hampered and prevented from being classed as high quality estates due to their poor local infrastructure. Improvements to the enhanced Heads of the Valleys Road must become priority to improve the standard of this location. It is important to maintain a choice and variety of industrial land in Torfaen and a need to protect existing employment areas from alternative uses when and where it is in short supply 5.5 Analysis of Unimplemented Employment Allocations A detailed analysis of all the unimplemented employment allocations in the Local Plan has been carried out. A site assessment proforma for each site has been prepared and are presented in the Technical Appendix. A summary table highlighting the advantages and disadvantages of each site is attached at Appendix II. The following conclusions have been drawn from our analysis: Approximately 84 hectares of allocated employment land remained undeveloped as at The table below highlights the approximate extent of undeveloped allocated employment land by category of use. Figure 10: Unimplemented Allocated Employment Land 2009 ALLOCATION LAND ALLOCATED (HA) Prestige High Quality Local Neighbourhood 3.70 TOTAL Source: DTZ The above table highlights the extent of allocated employment land which remains undeveloped in Torfaen, including the Craig-Y-Felin site. Based on the average take up experienced in Torfaen over the last 13 years, the unimplemented employment land allocations equate to approximately 46 years of supply of employment land. The Craig-Y-Felin site (21.5 ha) is unlikely to be developed for general employment purposes in the LDP period. We understand that the site is to be reserved for any projects of regional significance that come about in the LDP Plan Period, which whislt creating jobs may not necessarily fall within the B use classes. Such uses 23

27 could include healthcare or education facilities. The site will not therefore contribute as a source of general employment land supply in the emerging LDP and many jobs created at the site will be outside the forecasts. When removed, this leaves a potential supply of general employment land of ha. However, as discussed above not all current sites are likely to be deliverable and some allocations may no longer be relevant. Individual sites have been assessed in terms of their future contribution to the land supply in the LDP. The table below shows the location of the unimplemented employment allocations by category. Figure 11: Unimplemented Employment Land Allocations by Category and Location (including Craig Y Felin) LOCATION PRESTIGE HIGH QUALITY LOCAL INDUSTRIAL NEIGHBOURHOOD INDUSTRIAL TOTAL Cwmbran Pontypool Blaenavon TOTAL Source: DTZ The above table clearly shows a concentration of prestige estates around Cwmbran and a significant allocation of high quality estate land around Pontypool at Mamhilad. There is a significant allocation of local estate employment land in the northern Blaenavon region adjacent to Kays and Kears and Gilchrist Thomas Industrial Estate. Craig-Y-Felin (21.5 ha) is currently allocated for employment use and is a prestige site but is now envisaged as a high quality site that can accommodate regionally significant projects not falling within the B use classes but which create a substantial number of jobs and investment. 5.6 Analysis of Potential New Allocations A detailed analysis of all the potential new employment allocation sites identified by the Council, but which are not included in the Local Plan has been undertaken. A site assessment proforma for each site has been prepared and are presented in the Technical Appendix. A summary table highlighting the advantages and disadvantages of each site is attached at Appendix III. Approximately 87 hectares of potential new employment land allocations has been identified. Figure 12: Potential New Employment Land Allocations by Category CATEGORY LAND (HA) Prestige 6.07 High Quality 55.7 Local Neighbourhood 0 TOTAL 86.6 Source: DTZ 24

28 The table above highlights the extent of potential new employment allocations that have been identified in Torfaen. The only sites which have been identified for prestige employment are in the south of the County Borough, at the Central Recreation Area and The Alders both in close proximity to the A4042 (T). 5.7 Summary of Supply In terms of current employment land supply, there is approximately 62 hectares of unimplemented allocated employment land in the current Local Plan, excluding Craig-Y- Felin. Furthermore, an additional 86 hectares of potential new employment land has been identified. The comprehensive redevelopment of the ArvinMeritor site with the provision and upgrade of employment land near the town centre and bus and rail stations will provide an additional well connected prestige site and is welcomed. However, at this stage it is evident that there may be a gap in terms of the supply of prestige land available as a result of Craig-Y-Felin not being available for general employment use. Prestige land is considered the most suitable for B1(a) (office) development and a shortage may restrict Torfaen s ability to attract development and the growth industries. 25

29 6 Demand 6.1 Economic and Employment Land Forecasts DTZ prepared a separate report entitled Employment Land Review: Economic Baseline and Forecasting Report which provides the economic analysis to support the Torfaen Employment Land review in The report reviews the current economic baseline position in Torfaen and analyses the economic forecasts for the County Borough based on current economic drivers. The report also provides forecasts for employment land requirements in Torfaen based on a range of calculation methods. We have reconsidered the validity and robustness of the above forecasts in the context of the credit crunch and current recession. We conclude that the forecasts should not be adjusted for the following reasons: The plan period is 15 years whilst the recession is estimated to last about 18 months in total. The long term approach of forecasting employment land allows for fluctuations in take-up; Unexpected events will occur over the plan period. For example, a single major investment may increase, or decrease, the amount of land required and therefore, the total amount of land available needs to have a reasonable degree of flexibility; The upturn may bring a period of high take up as relatively healthy businesses who have shielded themselves during the recession look to expand; and The price of property had outperformed economic growth before the credit crunch. Rental and land prices are not predicted to return to 2006 levels for some time, and this may aid take up of land to some extent. A summary of the main conclusions of the report is provided below. The two methods of forecasting adopted involved the analysis of net employment growth and the historic performance of economic sectors. Both these methods have their limitations but knowing their limitations has enabled us to take a view on the emerging trends to provide an indication of future requirements. Analysis of net employment growth by sector in the Torfaen economy inevitably masks the underlying pattern of gross employment restructuring and replacement demand as occupiers seek improved facilities. Historic performance of economic sectors also ignores the regeneration efforts to change the prospects of the underlying economy and the need to maintain and enhance the quality of land supply in the market. Analysis of floorspace development suggests a minimum requirement of 1.3 ha per annum over the 15 year period to Whilst recent land take-up rates indicate around ha per annum which will build-in an element of forward supply of floorspace. These projections are based on recent historic trends when the Torfaen economy has not performed particularly well. Employment declined as did the total population. However, there are significant drives for enhanced sub-regional economic performance with Newport acting as a major engine for growth, stimulating wider spin-off potential. Torfaen will also benefit to the north as well from the economic and community push behind the Heads of the Valleys Turning Heads Strategy. Torfaen is also aiming to play a much greater role in meeting the needs of future housing and population growth in the subregion. 26

30 These may not just be aspirations as there are early signs of improved performance such as recent rises in employment and economic activity rates, strong employment growth in the service sector, and improving business start-up performance. In addition Torfaen falls within the West Wales and the Valleys region, which has qualified for the next round of EU Structural Funds This will allow for continued investment in the area to boost economic performance. It is important, therefore, that the planning process does not act as a brake on economic growth potential and therefore sufficient land needs to be allocated to accommodate future development. Growth of around hectares per annum should, therefore, be treated as a baseline level necessary to maintain current market activity. Plans to stimulate the office market in Cwmbran should be seen as additional allocations providing a supply-led impetus to higher quality investment. As the Torfaen and wider sub-regional economy can be expected to strengthen towards the second half of the plan period to 2021 sufficient capacity should be retained to accommodate additional growth in the economy At this stage, we estimate that an additional 25% - 50% uplift in employment land requirements would be appropriate for forward planning purposes in the period subject to an ongoing programme of monitoring and management to meet market demand. The total quantums of employment land are therefore summarised in the Table below. Figure 13: Employment Land Projections PERIOD AVERAGE ANNUAL REQUIREMENT (HA) TOTAL REQUIREMENT (HA) Source: DTZ Summary In light of the fact that 1.35 hectares of employment land has been taken up since 2006, the total forecast requirement equates to up to 46 hectares of employment land to Regeneration Proposals in Cwmbran Significant regeneration is proposed in Cwmbran Town Centre and the adjacent Eastern Strip Central. TCBC appointed CBRE to assess the commercially viable land uses which could be accommodated on the area defined as the Eastern Strip Central. The findings of the report will be used by the Council to inform the allocation of the site in the Deposit LDP. The Commercial Assessment of Cwmbran Town Centre Expansion Eastern Strip Central Report produced by CBRE, identifies that the provision of land for offices, as part of the comprehensive redevelopment of the Eastern Strip Central site, could form part of a commercially viable scheme for the comprehensive redevelopment of the site which would offer regenerative and economic benefits e.g. promote usage of the Town Centre and its amenities as part of an office park (of medium density) with generous car parking. However, to facilitate the regeneration plans businesses will be displaced from their current premises at Somerset Road, Forgehammer and Forgeside Industrial Estate s and will require relocation to new premises. This will have implications for the supply/demand of employment land. 27

31 6.2.1 Somerset Road The Somerset Road Industrial Estate is located just to the north east of the Town Centre. The rail station and Stagecoach bus depot are at the southern end of the site and are separated by Somerset Road which runs north to south and divides the estate into two distinct areas. The western portion consists of Stagecoach s depot, Fox the Movers and two former factory sites which are now cleared and vacant ready for development. We understand that Stagecoach has signed a long lease on their site, the Fox site is owner occupied and the Welsh Assembly Government are freeholders of the vacant and cleared factory sites. It seems relatively certain that this area is prime for development and that, excluding the Stagecoach site, the relocation implications are limited. Oaktree Motor Company occupies a site to the rear of the Stagecoach depot which is owned by a private individual and leased to Oaktree Motor Company. The eastern portion of the site consists of low quality industrial units with parking to their frontage. Most of the units are vacant although some appear to be used for very low key storage. Just Rollers own and occupy units The company manufactures rubber and polyurethane rollers and employs 75 staff. A company press release indicates that exports have trebled in the last 7 years. This indicates that the company is expanding and may be amenable to relocation. The Newtown Motors dealership at the north of the eastern portion is owner occupied. We also understand that they own units to the rear. Unit 13 is currently used for storage relating to the car dealership and unit 16 is let to a firework sales company. Units were acquired from Just Rollers about 4 years ago. Figure 14: Somerset Road Industrial Estate Occupiers UNIT NUMBER (SOMERSET RD) OCCUPIER PROBABLE LAND USE LAND DISPLACED (HA) Canalside 1 Oak Tree Motor Car sales 0.08 Company Cleared sites N/a B2 (1.5) No displacement, no employment space and the sites can be included as part of the churn element of the forecasting exercise Fox the Mover Fox the Mover 0.3 Showroom Newtown Motors B2 (0.53). plus Just Rollers B1/B Total 1.63 The Canalside area includes the Forgehammer and Forgeside Industrial Estates. The Forgehammer estate consists of small poor quality units arranged at a right angle to the estate road with parking to the front of units. The units are generally well let to a range of occupiers including The Window Doctor, Read Racing, Bob Dowen Motorsport, Auto Centre Tyres, Forgeway Engineering, Beckhill Engineering Ltd, Rushes Ltd, Cwmbran Beer Supplies and Allmake Rollers. Hutchings and Thomas are currently marketing 6 units to let at Forgehammer Industrial Estate that total 1,996 sq m (21,500 sq ft). 28

32 Figure 15: Forgehammer Industrial Estate Occupiers UNIT NUMBER (FORGEHAMMER) OCCUPIER LIKELY LAND USE 1 Vacant B2 2 Forgeway Limited B2 3 Forgeway Limited B2 4 Read Racing B2 5 Vacant B2 6 Vacant B2 7 Motafit Autocare B2 8 Motafit Autocare B2 9 Autocentres B2 10 Autocentres B2 11 Bob Dowen B2 Motorsport 12 Checker Cars Sui generis 13 The Window Doctor B2 14 Pine-it B2 15 St Davids Tyres B2 16 Beckhill Engineering B2 17 Cwmbran Motorcycles B2 18 Vacant B2 19 Cwmbran Tuning B2 Service Station 20 Allmake Rollers B2 21 Vacant B2 22 Vacant B2 23 Rushes Furniture B2 24 Cwmbran Beer B8 Supplies LAND DISPLACED (HA) 1 hectare (approx 0.04 ha per unit) Forgehammer Industrial Estate provides a type of unit that fits the requirements of a range of general industrial occupiers. However, it is considered that these requirements can be accommodated elsewhere in Cwmbran, such as Avondale Industrial Estate. The occupiers present suggests that they could operate from other similar premises and that Forgehammer is a general industrial estate that does not offer any sector specific advantage or other special reason to occupy the premises such as proximity to airports, universities or major employment creating uses. Forgeside Industrial Estate is well let with occupiers including Croft Engineering, G L Auto, Premier Autocare, DJ Decorators and Roofing and Forgeside Lines Ltd. The units at Forgeside are similar to those at Forgehammer in terms of age, size and quality. The type of occupier is also similar. 29

33 Figure 16: Forgeside Industrial Estate Occupiers UNIT NUMBER (FORGESIDE) OCCUPIER 1 G L Auto B2 2 DJ Decorators and B8 Roofing 3 Second Hand A1 Furniture 4 Avondale Auto B2 Services 5 Premier Autocare B2 6 I L Slade (UPVC) B2 7 Vacant B2 8 Croft Engineering B2 9 Croft Engineering B2 10 Forgeside Lines Ltd B2 LIKELY LAND USE LAND DISPLACED (HA) 0.4 hectares Meeting the Needs of Displaced Businesses On the face of it the relocation of businesses will result in a need for an additional 3.03 ha of land suitable for B2 use, 1.63 ha to accommodate businesses from the Somerset Road area and 1.4 ha from the Canalside area. However, to speed up the process of relocation, relocating businesses to existing suitable vacant buildings is considered the most appropriate option before building new premises which would involve land take. Potential relocation premises are identified and analysed in section Gap Assessment The forecast employment land requirement has identified a need of up to 47.5 hectares between 2006 and 2021, the next Plan period. However, 1.35 hectares has been taken up since 2006, so the resultant demand equates to up to 46 hectares. In addition, a further 3 hectares of demand could be created by businesses which are displaced as part of the implications of regeneration proposals if suitable relocation premises cannot be identified. It is considered to be unlikely that all businesses will be successfully relocated so there will need to be some flexibility in the supply. 30

34 7 Supply Analysis 7.1 Addressing the Forecast Requirement In light of the potential oversupply of land, sites have been assessed and a number of existing allocated and potential new sites have been excluded from the recommended land supply All the unimplemented employment land allocations were ranked according to their degree of importance to the County Borough. The ranking has been determined by a number of factors including the ease with which they can be brought forward for development by the market and the importance of the sites contribution towards the delivery of regional economic strategy. The ranking of each site can be seen in the table in Appendix I. New sites were also assessed and further details are in Appendix III Proposed Employment Allocations SITE Lakeside Sites, Llantarnam Park Figure 17 sets out the recommended sites that should be allocated in the LDP and form the employment land supply over the period 2006 to The sites are grouped by the Cwmbran, Pontypool and Blaenavon areas. In addition to stating why the sites are recommended for inclusion the potential contribution of sites in terms of likely future occupiers has also been considered in order to help achieve a balanced supply of land. It is important that land is available that will attract the key growth sectors. Figure 17: Proposed Employment Sites CURRENT HA QUALITY REASONS POTENTIAL CONTRIBUTION ALLOCATION ED1/4 (i), (ii), R7/3, C3/1 2.5 Prestige Ready for development and free from site assembly constraints. Infill sites. Access via existing infrastructure. Ty Coch Lane ED1/1 2.2 Prestige Prominent location adjacent to Llantarnam Park. Suitable access can be achieved through existing Lakeside Close (ED1/4(ii)). Cottage Farm ED1/2 9 Prestige Prominent employment site adjoining Llantarnam Park. Ty Coch Lane will need to be upgraded. Land suitable for out of town B1 office occupiers, although offices should be directed to Cwmbran town centre. Also likely to be suitable for some B2 uses, particularly the high growth sectors such as R&D or green technologies. The site requires some levelling and may not be suitable for large floor plates but could attract regional sized B1 office occupiers. Strategic extension to Llantarnam Park to accommodate high quality occupiers falling predominantly in B1/B2 uses. Site is part of Llantarnam Action Area and part of site will potentially accommodate housing land. 31

35 Ty Coch Way, Two Locks Land East of A4042/ Caerleon Road Land north of Clawdd-Du Bungalow ED3/7 1.4 Local Industrial Site 4.8 High Quality 1.2 High Quality Ty Coch Tip 14 High Quality Cwmbran Town Centre and Eastern Strip Central CWMBRAN TOTAL Usk Vale, Mamhilad Mamhilad (Usk Road) Lower Mill Field Roundabout South n/a. No new land Prestige ED2/2 6.7 High Quality ED2/1 3.0 High Quality 0.5 High Quality Infill site Good access from A4042, good relationship with new hospital which will create opportunities. Extension to Llantarnam Park. Help provide required land supply, good access, close to Cwmbran and close to Llantarnam park. Redevelopment to take advantage of town centre location and rail station etc Owned by WAG. Good access off new roundabout on A472 and on site infrastructure in place. Partly developed site. Benefits from a new major roundabout providing access to the development. Providing access issues can be resolved with the adjacent owner, this would be a highly visible employment site adjacent to recent development at the junction with of the A4042 and the A4272. General industrial site for B2 occupiers. Could provide land for tenants relocated following implementation of town centre regeneration proposals. General employment site but could accommodate spin-off businesses from the new hospital, some of which may fall within healthcare (D1) uses rather than traditional B class uses, but which should be supported. Elongated site probably most suited to small self contained office suites or industrial units for local occupiers Suitable for range of occupiers. Characteristics of eventual occupiers likely to depend on success of Llantarnam park in retaining its prestige function and the redevelopment of Cwmbran town centre. Provide high quality office space (B1) as part of a comprehensive mixed use development. Similar occupiers as current. B1/B2 Similar occupiers as current. B1/B2 This site would provide for high quality development adjacent to existing offices. 32

36 Lower Mill Field Roundabout North Former Gasworks Site, Land South of Travel Lodge 1.2 High Quality 2.1 Local Industrial Site 2.1 High Quality Gwenallt ED 4/2 0.9 Neighbo urhood PONTYPOOL TOTAL 16.5 Gilchrist Thomas ED 3/4 1.2 Local Industrial Site Kays and Kears ED 3/5 6.0 Local Industrial Site Is an undeveloped plateau within the existing employment area. This is a successful employment area due to good access to the Trunk road network. The eastern edge is close to the Afon Lwyd River and associated ecological corridor. Provides a logical extension to the Polo Grounds employment area. The site is adjacent to a hotel and located between the A4042 dual carriageway and the railway. This is a successful employment area due to good access to the Trunk road network. Appropriate landscape screening and soundproofing will be required. Whilst there are existing poorly presented employment units there is potential to expand and regenerate this facility. Development has been undertaken at this site during the current plan period. Ideally located to capitalise on opportunities brought about by the Heads of the Valley road improvements. Sequential development adjacent to the existing industrial estate. Ideally located to capitalise on the The site is in close proximity to hotel and B1 office users with access through these areas meaning the site provides an appropriate opportunity for B1 development. Land adjacent to council depot and there is potential for providing servicing with expansion of council facility.the site has some contamination issues and this constraint will need to be addressed dependant on proposed use. B2 Uses B2 uses B2 uses 33

37 Varteg Road ED4/1 0.8 Neighbo urhood BLAENAVON TOTAL TOTAL improved Heads of the Valley Road. Although access is poor this site is required to help stimulate local demand north of Pontypool B2 and B8 uses The above table recommends a land supply of 59.6 ha compared to a forecast requirement of a 46 ha requirement and will therefore, meet the employment needs of Torfaen over the period 2006 to In addition, the supply figure does not include the land take of office development in Cwmbran Town Centre. The recommended land supply is 13.6 hectares over the requirement and as such represents an oversupply. However, we do not consider that this will put sites under pressure from alternative uses, such as residential for the following reasons: Some of the 13.6ha may need to be taken up by businesses displaced by the Cwmbran Town Centre regeneration proposals if they cannot be successfully relocated. Some flexibility in the land supply protects against unforeseen circumstances, should any sites prove not to be deliverable for instance and; Site areas are gross and the eventual take up is likely to be lower. For example, the Cottage Farm site at Llantarnam has a high pressure gas main which requires a nobuild zone around it. The Ty Coch site is a large allocation which would provide a large accessible strategic employment site. This site could potentially be retained for development projects for which there is a wider regional or national need. Figure 18 highlights the category and location of the proposed employment allocations. There is employment land in all 3 areas and in general, the supply and type of mix is considered to be a good fit with market demand, the role and function of settlements/areas and the future potential of areas based on market demand, growth market sectors and infrastructure for example. Figure 18: Retained/New Employment Land Allocations by Category and Location LOCATION PRESTIGE HIGH QUALITY LOCAL INDUSTRIAL NEIGHBOURHOOD INDUSRTIAL TOTAL Cwmbran Pontypool Blaenavon TOTAL Figure 18 could suggest a lack of prestige sites in Torfaen but we consider that the proposed supply reflects Torfaen s role in comparison to office and industrial markets such as Newport and Cardiff, and gives the Council a realistic and manageable amount of sites with which to work with landowners, developers and proposed occupiers to facilitate their development. It must also be noted that the Cwmbran Town Centre proposals can deliver 34

38 significant office development that, due to its town centre location, mix of uses and location near to the rail station, is expected to create good quality employment space. Overall, the proposed supply of land is considered adequate in terms of providing Torfaen with the quantity and quality of employment land it requires in order to achieve its economic aims and objectives Sites Identified for De-allocation The following unimplemented employment allocations have been identified for de-allocation: Figure 19: Sites to be De-Allocated SITE ALLOCATION HA REASONS Craig-Y-Felin ED1/ Landowner not bringing site forward TRW Sports Ground, New Inn ED3/6 2.6 Although the site is a logical extension to the Polo Grounds Estate, public funding has been used to develop the site as a sports ground. Development of the site would therefore be controversial Bryntovey ED2/3 6.7 There are severe constraints to the development of this site including a very steep topography and a brook running through the centre of the site. Would recommend that only part of this allocation is de-allocated as the western end of the site could be used for small development. Malthouse Lane, Llantarnam Fibreglass Site, Pontyfelin Cwmbran Gateway, Pontyfelin ED1/3 9.3 Steeply sloping site (1:15) which would be difficult to develop. A number of overhead power lines traverse the south west of the site. A new roundabout would be required on Newport Road to provide vehicle access and significant improvements would be required to the junction to the south. Due to the topography, development on the site will impact on the amenity of adjoining residential units. ED3/1 6.3 This site is well located and has the potential to form part of a wide employment area and link in with Craigy-Felin. However, there are a number of constraints to development. Two public sewers run under the middle of the site as does a water main. There are approximately 11 electricity pylons situated on the site and a number of underground transformers. ED3/ Four power lines traverse this site. There are 10 pylons and two underground transformers. This is a small narrow site which would be particularly affected by these constraints. Furthermore, access to the site which must be shared with Western Power Distribution is unsuitable for HGV 35

39 traffic. TOTAL Surplus Potential New Allocations The following potential new allocations are considered unsuitable for inclusion in the Local Plan Figure 20: Surplus Potential New Employment Land Allocations SITE HA REASONS The Alders, Llanfrechfra Way Central Recreational Area East of Roundabout, A4042 North of Ashbridge Inn 1.74 The site is close to residential uses and covered by mature trees. Identified as important urban open space. No opportunity for clustering of employment uses The site is very difficult to access because access will not be permitted off Llanfrechfa Way. Identified as important urban open space. Furthermore, the western and southern boundaries are bordered by rivers which could cause flooding. An additional constraint is that this site is identified in the Local Plan as recreational open space. 3.0 Constrained by extent of services crossing the site and the fact that the site is designated a special landscape area outside the urban boundary and constitutes greenfield land development Any development of this land will require a shared access with the Ashbridge Inn. The site is also liable to flooding and there are a number of ecology issues. Identified as important urban open space. Development of this site will also impact upon the south Sebastopol general development area which is accessed opposite the site. A4042 Site This site is designated a special landscape area which is close to the Brecon Beacons National Park and outside the urban boundary. There is already a significant amount of employment land allocated in this area. West of Cwmbran Town Centre (Canalside) 4.96 This site is already under pressure from the proposals in relation to the Cwmbran Town Centre strategy which identifies this area for canalside residential development. Development of this site could also be detrimental to the National Cycle Route and the Monmouthshire and Brecon Canal which both pass through the site. Development detrimental to these assets is contrary to the policies of the local plan. Pontyfelin 4 North 5.78 This site is considered to be high grade agricultural land and a change of use would be controversial. Site is crossed by a number of overhead powerlines. Somerset Road 2.15 Prominent location with good access. However, the site is narrow and to be fully developed would require the train station to be relocated. Total

40 7.2 Accommodating the Displaced Businesses As stated previously, it is preferable that displaced businesses are displaced to existing suitable vacant premises rather than to new premises Somerset Road Businesses which need to be relocated from Somerset Road include Oak Tree Motor Company (0.08 ha), Just Rollers (1.25 ha) and Fox the Movers (0.3 ha). All of these businesses may find it difficult to find existing suitable premises in the local area but there is new land at Llantarnam Park that may better fit their current requirement. It is understood that Fox has been looking to relocate to larger premises. Just Rollers have heavy machinery built into their building floorplates and the businesses organic expansion has resulted in them occupying a number of units at Somerset Road. Oak Tree Motor Company would require a site with retail frontage to increase footfall and help drive car sales. Therefore, if new premises need to be provided for the 3 businesses, this will result in a land take of 1.63 hectares based on their current situation Canalside It is likely that many businesses at Forgehammer and Forgeside Industrial Estates will be able to take up existing vacant premises in the local area, thereby reducing the amount of additional land required. This is because few firms have special requirements and are able to occupy general industrial units. We consider it very important to ensure that the affected businesses are able to relocate to suitable premises within the Cwmbran area. Units at Forgehammer Industrial Estate are, based on current letting details, about 3,700 sq ft on average. Eighteen of the twenty four units are occupied. Forgeside is smaller in size so we have assumed a relocation space requirement of 100,000 sq ft. If this space is currently available elsewhere in Cwmbran then technically, there may be no land requirement arising from Forgehammer and Forgeside Industrial Estate, although we acknowledge that it is unlikely that all businesses would find relocation space in Cwmbran. There is enough space currently available within the Cwmbran second hand market to accommodate the 100,000 sq ft displaced space. As already identified, there is currently some 616,874 sq ft of vacant industrial space in Cwmbran, over half the space in the Borough. Much of this vacant space is at Springvale Industrial Estate and Avondale Industrial Estate. Displaced businesses could be relocated here as this space appears suitable to meet the needs of displaced businesses in terms of the type of product. Most of these units are being marketed at a price of between 2.50 to 5.50 per sq ft, although some space is listed at 0.75 per sq ft and some at up to 7 per sq ft. Whilst these rental prices do not at first appear significantly lower than previous rental levels, rent free periods, flexible terms and other deal sweeteners are typically being offered to occupiers. This lowers the overall rental cost. The table below summarises unit availability at Springvale and Avondale Industrial Estates in Cwmbran: Figure 21: Available Units at Springvale and Avondale Industrial Estates, Cwmbran SQFT NUMBER OF UNITS 0-5, ,000-10, ,000-20, ,

41 Total 13 Figure 21 highlights the problem that there is a lack of units around the 4,000 sq ft size at Springvale and Avondale industrial estates and this will present an issue for the successful relocation of businesses. However, we note that businesses including Forgeway Limited, Motafit Autocare, Autocentres and Croft Engineering occupy two units each, so they will have space requirements in the 5,000 to 10,000 range in any case. Lower rents may also help overcome this potential problem in the short term and allow businesses to increase their space and it could also encourage the more successful businesses to expand. Other remedies will however need further investigation, for example, the ability to subdivide existing units. Given the basic nature of many industrial units the physical process of subdivision can be relatively straight forward. We recommend the following methods are explored to relocate businesses, in order of preference: Relocate businesses to existing units in Cwmbran, Sub-divide existing units and relocate businesses, Redevelop existing vacant units at existing industrial estate(s) in Cwmbran to create a new development of small industrial units, Erect a new development of small industrial units on allocated employment land at Ty Coch Way, Cwmbran, or, Erect a new development of small industrial units on allocated employment land at Llantarnam Park, Cwmbran. We are confident that, with the right assistance and intervention, the majority of businesses can find suitable relocation premises in Cwmbran. This means that the amount of displaced employment land will be negligible in relation to the overall land requirement and the flexibility that it, and the land supply, provides. 7.3 Summary The above review and recommendations of sources of land supply demonstrates that the forecast demand for employment sites can be met by the portfolio identified. The 60ha recommended supply meets the forecast requirement of 46ha, provides some flexibility and provides the correct balance of sites in terms of location and market attractiveness to particular industries. In terms of Cwmbran we have reviewed and updated the recommended land supply at Cwmbran in response to Craig-Y-Felin falling out of the land supply, the need to accommodate displaced businesses and the opportunities for redevelopment in Cwmbran Town Centre, as identified by CBRE. Given Cwmbran s role it is important that enough land is provided in the Cwmbran area and that this land is of a suitable quality to attract high growth sectors. Tip Coch Tip has been included in the supply to address the supply issue created by Craig-Y-Felin not being deliverable for employment land during the Plan Period. The Cwmbran Town Centre redevelopment proposals create an opportunity to provide prestige office space that mitigates the loss of 21 ha of prestige employment land at Craig- Y-Felin. Cwmbran Town Centre has the potential to emerge as a key employment location over the Plan Period, subject to the right type of space being created. This potential will be driven by good accessibility to the M4 (meaning that parking must be provided for offices), the mix of uses and services in the Town Centre, continuing regeneration of the physical environment, public sector take up of space to act as a catalyst and the close proximity to public transport including the rail station. Modern office space delivered as part of a comprehensive development guided by the LDP can provide prestige employment space. This is important for the supply of sites that will attract high value and high growth industries given the loss of prestige land at Craig-Y-Felin. 38

42 In terms of existing industrial estates affected by regeneration proposals we consider that displaced businesses could be accommodated in vacant premises in Cwmbran. However, if at the precise time of relocation the premises are no longer vacant or sub-division is not possible, sufficient land has been identified within the land supply to accommodate the displaced businesses. Further, not all of the land will be lost from employment use as a mixed use development with office based employment space is proposed. Redevelopment opportunities in the town centre can provide the prestige product that Craig-Y-Felin would have created. 39

43 8 Conclusion 8.1 Market Overview The Torfaen office market has shifted in line with national and regional trends, with a major downturn over the last 2 years. However, sites in the south of Torfaen, such as Llantarnam Park continue, to be relatively popular with occupiers who are looking for a more affordable location along the M4 but wish to remain in close proximity to the main cities of Cardiff and Bristol. Areas in the north of the County Borough had been less popular with occupiers prior to the recession and this trend is likely to continue for the foreseeable future after the recession, particularly as occupiers will have a greater choice of space available. The industrial market within Torfaen continues to change in line with national and regional trends. More recently, the recession has exacerbated the fall of the industrial property market across the whole of the UK. Once the market returns the trends witnessed prior to the onset of the credit crunch are expected to continue. Like many places around the UK, Torfaen has witnessed a range of former industrial sites being developed for other uses, especially residential development which achieves much higher land values. This trend is predicted to continue and will create some demand for the relocation space by firms pushed out of traditional employment areas. 8.2 Future Trends Modern occupiers require different types of site than traditional occupiers, with traditional manufacturing sites providing redevelopment opportunities. If Torfaen is to become home to higher-value sectors, and share in the economic success of south east Wales, an appropriate range of sites and premises must be provided. This must include the development of new sites, redevelopment of existing sites and stock modernisation. The proposals to regenerate Cwmbran Town Centre, to include developing office accommodation should be supported. If Torfaen is to attract high-value occupiers and better compete with other local authorities, the redevelopment of some dated office accommodation is required along with the development of modern office accommodation. This is becoming increasingly important as occupiers look to take advantage of the market drop and move to better quality space at a reduced cost. This trend is likely to accelerate when confidence returns to the market and firms look to forward plan their businesses. 8.3 Future Land Requirement Since completing the draft report the UK economy has gone into recession. In light of this the demand forecast has been revisited but it was concluded that it should largely remain unchanged except the need to take account of actual take up of land since 2006 which equates to 1.35 hectares. The recommended land requirement is therefore 46 hectares. Figure 22: Employment Land Projections PERIOD AVERAGE ANNUAL REQUIREMENT (HA) TOTAL REQUIREMENT (HA) Source: DTZ Significant regeneration is proposed in Cwmbran Town Centre. To facilitate these plans businesses will be displaced from their current premises and will require relocation to new premises. An additional 3 ha is required if displaced businesses from regeneration efforts in 40

44 8.4 Supply Cwmbran cannot be relocated to existing premises. However, the preference is for displaced businesses to be relocated to existing vacant suitable premises, which will reduce the land required to accommodate displaced businesses. Approximately 84 hectares of allocated employment land remained undeveloped as at The table below highlights the approximate extent of undeveloped allocated employment land by category of use. There is approximately 62 hectares of unimplemented allocated employment land in the current Local Plan, when excluding Craig-Y-Felin. Figure 23: Unimplemented Employment Land Allocations by Category and Location (including Craig Y Felin) LOCATION PRESTIGE HIGH QUALITY LOCAL INDUSTRIAL NEIGHBOURHOOD INDUSTRIAL TOTAL Cwmbran Pontypool Blaenavon TOTAL Source: DTZ A detailed analysis of all the potential new employment allocation sites identified by the Council, but which are not included in the Local Plan has been undertaken. Approximately 87 hectares of potential new employment land allocations has been identified. Figure 24: Potential New Employment Land Allocations by Category CATEGORY LAND (HA) Prestige 6.07 High Quality 55.7 Local Neighbourhood 0 TOTAL 86.6 Source: DTZ 8.5 Portfolio of Sites Figure 25 sets out the recommended sites that should be allocated in the LDP and form the employment land supply over the period 2006 to The sites are grouped by the Cwmbran, Pontypool and Blaenavon areas. Figure 25: Proposed Employment Sites SITE CURRENT ALLOCATION HA Lakeside Sites, ED1/4 (i), (ii), R7/3, 2.5 Llantarnam Park C3/1 Ty Coch Lane ED1/1 2.2 Cottage Farm ED1/2 9 Ty Coch Way, Two Locks ED3/

45 Land East of A4042/ 4.8 Caerleon Road Land at Clawdd-Du 1.2 Bungalow Ty Coch Tip 14 Cwmbran Town Centre n/a. (No new land) Edlogan Way South 2.78 CWMBRAN TOTAL Usk Vale, Mamhilad ED2/2 4.0 Mamhilad (Usk Road) ED2/ Lower Mill Roundabout 0.03 North A4042 Site 3 7 PONTYPOOL TOTAL 12.8 Gilchrist Thomas ED 3/ Kays and Kears ED 3/5 6.8 Varteg Road ED4/1 1.9 BLAENAVON TOTAL 9.31 TOTAL The above table recommends a land supply of ha compared to a forecast requirement of a 46 ha requirement and will therefore meet the employment needs of Torfaen over the period 2006 to Accommodating Displaced Businesses It is concluded that the majority of displaced businesses could be accommodated in vacant premises. However, if at the precise time of relocation the premises are no longer vacant or sub-division is not possible, sufficient land has been identified within the land supply to accommodate the displaced businesses. Further, not all of the land will be lost from employment use as a mixed use development with office based employment space is proposed. Redevelopment opportunities in the town centre can provide the prestige product that Craig-Y-Felin would have created. 8.7 Future Role of Cwmbran In terms of Cwmbran, planning policy increasingly places emphasis on town centres and key settlements in terms of accommodating development and growth. It is against this background and the context of opportunities for redevelopment of the Town Centre that we recommend that Cwmbran Town Centre s role as a high quality office location is progressed. Town centre offices in Cwmbran can attract some of the employment sectors that are growing and forecast to continue to grow. This will also help to diversity the monouse offer of the Town Centre, whilst additional workers in the Town Centre will help to increase the spending profile of the town centre. 8.8 Recommendations and Policy Supply of Land A key role of the LDP is to provide opportunities for the investment, economic development and jobs necessary to secure rising standards of living, in a way that is consistent with the principle of social inclusion and the need to protect and enhance the environment. The first 42

46 opportunity for the Council to influence the amount and location of employment land is through policy responses, most of which will be via the LDP. An obvious and effective response to stimulate employment growth is to allocate additional sites for employment use. We recommend the following actions in terms of allocating sites for employment development: 1. The LDP should take account of forecast demand of hectares of land (46 hectares for the remainder of the Plan Period). 2. The allocations set out in Figure 26 should be de-allocated and not carried forward in the LDP. Figure 26: Sites to be De-Allocated Site Name Craig-y-felin 21.5 TRW Sports Ground, New Inn 2.6 Bryntovey 6.7 Gwenallt 1.8 Malthouse Lane 9.3 Fibreglass Site 6.3 Cwmbran Gateway 1.95 Size (Hectares) 3. The allocations set out in Figure 27 remain as allocations for employment land in the Adopted Torfaen Local Plan. Figure 27: Sites to be Re-Allocated Site Name Lakeside Sites 2.5 Ty Coch 2.2 Cottage Farm 9 Ty Coch Way 1.4 Usk Vale 4 Mamhilad 1.77 Gilchrist Thomas 0.61 Kays and Kears 6.8 Varteg Road 1.9 Size (Hectares) 4. New allocations are made at the locations set out in Figure 28. Figure 28: New Allocations Site Name Size (Hectares) Land East of A4042/Caerleaon Road 4.8 Land at Clawdd-Du Bungalow 1.2 Ty Coch Tip 14 Edlogan Way South 2.78 Lower Mill Roundabout North 0.03 A4042 Site

47 The land supply should be monitored on an annual basis, identifying any potential issues and progressing the actions necessary to address the issues. Any implications in terms of sites to be de-allocated or new site allocated, should be managed through the LDP revisions later in the plan period. Safeguarding Employment Land A critical factor in maintaining a supply of employment land will be the ability to protect land in employment use from being lost to alternative uses, and in particular, the need to protect the best employment sites. 1. Sites should be protected using a criteria based policy approach, which also names the key sites and avoids reference to need. The criteria should be centred on quality, range and choice. The criteria based policy would also allow for the release of poor quality sites from the portfolio that make little or no contribution currently, or in the future. 2. Cwmbran should be recognised as a focus for employment growth and planning policy should reflect this. Cwmbran is identified as a focus for employment related development for the following reasons: a. The town occupies a strategic location being the main town in the authority b. It is identified as a key settlement in the Wales Spatial Plan c. The town is accessible by a variety of modes d. Employment development in the town centre will help to regeneration the town centre and provide a complementary mix of uses e. Employer/ employee preference for town centre locations f. The changing economic structure is requiring more service sector orientated locations/ sites than traditional manufacturing locations g. The provision of employment sites and premises in and in close proximity to Cwmbran is in line with the site selection criteria identified in PPW which include sites being selected in line with sustainable development principles, with preference for the use of previously developed land, proximity to existing urban developments, good accessibility to the public transport and primary road network and good quality telecommunications A policy should be created that sets out the employment role of Cwmbran town centre and requires that employment space is brought forward as part of mixed used town centre regeneration. Management Strategy Allocation of sites alone does not automatically lead to take-up of land and will not create best value or highest added value for Torfaen. We recommend the use of pro-active management and engaging with landowners and developers and other stakeholders to help bring sites forward. 1 Positive planning techniques can be used to help move sites from allocations towards masterplans or schemes. The preparation of development briefs and masterplans can reduce developers risk by giving planning certainty and raise the design quality and integration of development. It can also add to the overall marketability and interest from developers. 44

48 2 Increased Council departmental and external body co-operation (e.g. Environment Agency, CCW, WAG) can help site marketing and management. Resolving the constraints of publically owned sites such as utilities provision and access will improve their deliverability and market attractiveness. Improved and active marketing of sites can increase developer awareness. Maximising linkages between economic development and planning functions in terms of understanding the land available, the uses that are acceptable, development requirements, economic objectives and business requirements can give investors, developers and occupiers confidence to invest in Torfaen. 3 A policy should be introduced to secure money under planning obligations (Section 106 contributions) from developers where employment land is lost to alternative uses. The money collected via this policy should be used to deliver the provision of other employment land allocations, make improvements to other employment areas or facilitate the above recommendations. This would help to improve the legitimacy of enforcing such a planning obligation. A strategy should be developed to justify this policy and which demonstrates how the Council intend to spend the money. 45