FINAL REPORT BUSINESS SPACE STRATEGY AND APPRAISAL: STIRLING COUNCIL AREA

Transcription

1 FINAL REPORT BUSINESS SPACE STRATEGY AND APPRAISAL: STIRLING COUNCIL AREA May 2010

2 EXECUTIVE SUMMARY INTRODUCTION E1. Business space acts as a catalyst for economic growth, is a key determinant of local participation (in employment) and depending on the type of use, can dictate the prosperity of local residents. E2. Adequate supply of business space will ensure that longer-term economic development capacity and growth of the area is not constrained by a lack of suitable and appropriate business land and property. E3. This Business Space Strategy seeks to: Analyse the existing business property market; Analyse the existing business property stock; Provide estimates of the likely scale and type of future demand for business property; Consider appropriate delivery mechanisms, including engaging with the private sector; and Consider a range of wider property issues, as appropriate. CONTEXTUAL OVERVIEW Economic Context E4. Economic growth across Scotland was muted in 2008 and has now reversed into a sharp recession. Forecasts for 2009 and 2010 suggest a ripple effect from the credit crunch into the wider economy. E5. has a growing population and slightly higher than average economic activity rate. E6. is a net importer of labour, with more jobs than working age residents in employment. E7. experienced higher than average growth in jobs and number of businesses over the last three years that data is available for. E8. residents who work outside the Council area earn more on average than people who work within the Council area. Economic Implications for Business Property E9. s growing population will require new local jobs additional commercial property will be required to accommodate new jobs. E10. Future jobs growth will be driven by office based sectors such as financial and business services. These sectors are likely to require high quality office park buildings and small and flexible serviced office accommodation. i

3 E11. Demand for modern industrial property will come from existing companies expanding, companies wanting to move into modern premises and new companies starting up. E12. Growth in the construction and wholesale sectors is likely to drive demand for light industrial and trade counter units. E13. An increase in small office based businesses is leading demand for modern small serviced office space. Policy Context E14. The Business Space Strategy should help the Council area meet the Scottish Government Economic Strategy s (2007) two National Outcomes directly related to economic development: National outcome 1: We live in a Scotland that is the most attractive place for doing business in Europe. National outcome 2: We realise our full economic potential with more and better opportunities for our people. E15. s Single Outcome Agreement outlines how partners in will contribute to the Government s Economic Strategy. The SOA seeks to deliver economic growth through Strategic Topic 1: Making a place with a vibrant economy that is open for business. E16. Council is currently developing a new Local Development Plan, which will set out a vision for the progress of (excluding the National Park area) until In addition, The Loch Lomond & the Trossachs National Park is developing a Local Plan which will cover the areas of within the National Park boundary. To help in development of these Plans, the Business Space Strategy should help to determine: The amount of new business space required The type of business space required The location of business space required E17. SPP15 Planning for Rural Development provides a more relaxed policy approach to development in the countryside including economic development. It is anticipated that in the future there will be more uptake of economic development and employment generating uses within the countryside. Policy Implications for Business Property E18. Provision of new business space is a priority for to enable longterm economic growth. E19. Future development of the majority of business space will need to be concentrated in and around the urban area of in order to provide an employment base for the existing population centres in line with ii

4 current National Policy. However, economic development within the rural area is vital for the sustainability of rural communities, providing jobs and opportunities. Both Council Planning Authority and the Loch Lomond & the Trossachs National Park are considering the issues facing future development of business space in the rural area, including innovative means of facilitating and supporting business such as through work hubs and working from home. In addition, the National Park is looking to identify new business sites. E20. While the previous planning policy provided a sequential approach to economic development where development within settlements was favoured before development in the wider countryside, SPP15 has relaxed this policy approach and planning authorities can now be more supportive of development in the countryside provided that it is sustainable. This may also include diversification from primary or land based activity. PROPERTY MARKET REVIEW Property Market Introduction E21. The Scottish industrial market remains active despite the recession, with a good flow of property transactions and some development activity. E22. The Scottish office market is experiencing a downturn, resulting in an increase in supply. Industrial Property Market E23. Although industrial based sectors across are in overall long-term decline, the industrial property market experiences renewal of stock and demand from non-manufacturing occupiers such as distribution, wholesale and utilities. E24. There is increasing pressure on the existing stock of industrial space as centrally located sites are redeveloped to provide housing or other commercial activity, e.g. retail and leisure. E25. A lack of effective industrial sites is forcing developers and expanding local businesses to increasingly look at greenfield and rural sites for development. E26. The stock of industrial premises in the Council area is 244,751 sq m, around 1% of Scotland s total industrial stock. E27. has one of the lowest industrial availability rates in Scotland limited supply restricts opportunities for businesses to expand, downsize or simply move to more suitable premises. E28. 40% of available industrial floorspace is pre-1960s, leaving limited choice and supply of modern industrial units. E29. Industrial transactions were down in July 2008-June 2009 in comparison to the previous year this is most likely due to the recession and difficult market conditions. iii

5 E30. A recent survey of Springkerse Industrial Park found growing pressure on industrial land in Springkerse for retail use. E31. has experienced growth in wholesaling and industrial uses that also require office space. There is also an increasing overlap between retail, trade and storage use requirements. E32. No provision has been made to replace industrial space lost at Burghmuir and Crookbridge, which is likely to be redeveloped for alternative use. E33. A number of industrial developments are currently being progressed in the area sites at Borrowmeadow Road, Springkerse; Whitehouse Road, Springkerse; Munro Road, Springkerse; and, two sites at Bandeath Industrial Estate. E34. A number of pipeline developments are proposed for the sites at Broadleys Business Park; Hill of Drip; and, Manor Farm, Blairlogie. Office Property Market E35. The stock of office property in the Council area is 100,770 sq m. E36. There are pressures on city centre office locations for change of use, e.g. for residential and hotel developments. E37. In April 2009, there was 14,881 sq m of office floorspace being marketed in the Council area. E38. 97% of offices sold or let in the year to March 2009 were smaller than 500 sq m showing strong demand for small offices. E39. Office transactions for July 2008-June 2009 were down 20% on the previous year this was due to the recession and difficult market conditions. E40. Prime office rents per sq m for in 2008/09 were , competitive in comparison to Glasgow and Edinburgh at and respectively. E41. Despite the recession, occupancy rates remain high for most of s key serviced office locations (Old Town Jail offices, 100%; Enterprise House, 97%; STEP Offices, 90%; Ceteris, 87%; Business Centre, 86%, Touch Business Centre, 86%; and, University Innovation Park, 85%). E42. Castle Business Park has higher levels of availability with occupancy at Forsyth Business Centre 61%. Available floorspace for the final phase (Strathallan House and Glendevon House) remains high. E43. There have been no significant office developments in the Council area since iv

6 E44. There are a range of sites proposed for office development in the Council area however, many of these are subject to significant constraints or pressure for change of use. Retail, Tourism and Commercial Leisure Property Market E45. Retail sales fell in the year to February Food retailers have remained the most active in the current market. E46. A number of supermarkets are interested in sites in the Council area putting pressure on business sites. E47. s stock of retail property is around 145,000 sq m. E48. Supply of retail floorspace in 2008/09 was 13,798 sq m. E49. The Retail Capacity Study (Roger Tym & Partners, 2008) identified a need for around 3,300 sq m additional superstore (food) retail floorspace in the area, increasing to around 5,000 sq m net floorspace by 2018 assuming an improved market share of 60%. For comparison goods (non-food), a need for around 10,000 sq m additional retail floorspace is identified, increasing to around 22,000 sq m net floorspace by 2018 assuming an improved market share of 17.4%. E50. Supply of retail floorspace has increased while take-up has decreased due to a combination of the economic slowdown, changing retail patterns and perhaps a lack of appropriate supply. E51. Retail property transactions for July 2008-June 2009 are well down on the previous year due to the recession and difficult market conditions. s retail rental level is below Edinburgh and Glasgow, but higher than Falkirk and Perth. E52. The tourism and commercial leisure sectors are of critical importance to the economy, with around 4.3 million visitors generating some 406 million per annum. E53. There is currently a data gap on demand, take-up and supply of tourism, culture and commercial leisure business space. A review is required to plug this gap so that future updates of the Business Space Strategy can analyse and make recommendations on additional space required to meet s tourism, culture and leisure objectives. Business land Supply E hectares of business land is recorded as being immediately available out of a total of hectares likely to be developed over the next 20 years. E55. The potential supply of land for industrial development over the next 20 years is around 59 hectares, made up of: Five hectares of land immediately available for industrial development; v

7 Around 10 hectares of land available for industrial development in the short-term, e.g. 1 to 3 years, but there is strong pressure for alternative use for a number of these sites (Burghmuir, Crookbridge); and 44 hectares of land likely to be developed for industrial use over the medium term (3 to 10 years), but these sites are subject to a range of constraints. E56. The potential supply of land for office development over the next 20 years is around 52 hectares, made up of: Five hectares of land immediately available for office development; 19 hectares of land likely to be available for office development in the short term (1 to 3 years); 17 hectares of land likely to be available for office development in the medium term (3 to 10 years), but these sites are subject to a range of constraints and aspirations for higher value use; and hectares of land potentially available in the longer term (10+ years), but this consists of one site, the Major Growth Area, which is subject to higher use aspirations by the developer. E57. There is an additional hectares of business sites identified for longer-term (e.g. 20+ years) office and industrial development. However, these sites are subject to significant constraints, which would need to be overcome for development to take place within the strategy time frame. For this reason, they are excluded from calculations on supply for the next 20 years. E58. The amount of business land under pressure for alternative uses is around 41 hectares, 37% of the supply of business land for the next 20 years. E59. 46% of business land taken up since 2005 has been developed for uses other than office and industrial. E60. There has not been any significant take-up or development of land for office use since E61. Nearly double the amount of land was developed for industrial use in comparison to office between January 2005 and June 2009, showing continued strong demand for new-build industrial premises in the Council area. E62. Only two sites that are appropriate for self-build were available at the start of July 2009, showing a latent shortage of self-build opportunities in the Council area. vi

8 Enquiries for Property & Sites E63. Council received 1,098 commercial property enquiries from 433 individuals in individual enquirers were looking for industrial premises and 129 were looking for office premises. 62 enquirers were looking for land. E64. 73% of potential demand for industrial was for units of less than 500 sq m, with demand outweighing supply (number of units) by four to one. Although the volume of demand for industrial units 500+ sq m is lower (27% of demand), demand outweighs supply seven to one. E65. 86% of potential demand for office was for units of less than 500 sq m, with demand outweighing supply by two to one. FORECASTING FUTURE GROWTH Introduction E66. Employment growth averaged 3% per annum between 2002 and 2007, significantly higher than the 1% average annual growth for Scotland as a whole. E67. The current recession is having a significant impact on the economy, with business start ups down in 2008 and unemployment rising. E68. Employment in financial and business services is expected to decrease over the short term due to the recession and manufacturing is forecast to decline over the longer term. Economic Forecasting E69. Local employment projections are highly volatile and need to be updated regularly. E70. Key increases in employment over the next 10 years are expected for business services and public administration & defence. Key decreases in employment over the next 10 years are expected in manufacturing sectors. Jobs growth demand for business space over the next 10 years will come from office based sectors. Economic Forecasting Scenarios E71. Due to the unreliability and drawbacks of economic forecasting, a number of scenarios have been produced to predict future employment growth. The scenarios include: Base Scenario formulated using Council s base scenario for population growth. New World Order v1 Scenario based on Council s new world order projection for population growth, factoring in the recession and its affects on population growth. Deemed the most likely scenario in terms of population growth. vii

9 V1f Scenario same as the v1 Scenario but assuming no change to fertility from Base Scenario. Pessimistic v2 Scenario based on Council s pessimistic scenario for population growth. Aspirational 100k population Scenario based on an aspiration to grow the population of the Council area to 100,000 by Single Outcome Agreement Scenario based on targets in the SOA for 2.5% jobs growth per annum. Economic Development Jobs Growth Scenario based on desired economic growth by Community Planning Partners, but factoring in the recession. E72. The Business Space Strategy calculates future demand for business space using the Economic Development Jobs Growth Scenario as this scenario is viewed as fitting best with Community Planning Partner policy-based aspirations for the economy. Property Demand Forecast Employment Growth Demand E73. It is assumed that the number of industrial based jobs in will be maintained at current levels. Local opinion suggests that the number of industrial jobs in the Council area can be maintained due to growth in some sectors (e.g. wholesaling and light trade uses) canceling decline in others (e.g. heavy manufacturing). Key change in future demand for industrial property will be due to change in the type of property required, e.g. growth in demand for modern light industrial park and trade uses. E74. Future jobs growth will be driven by office based jobs. E75. An average property requirement of 20 sq m per full time equivalent working is used to work out future business space requirements for new jobs. E76. The Economic Development Scenario predicts jobs growth of 10,126 new office jobs by 2032, averaging at 440 new office jobs per annum. An additional 202,519 sq m of office space is required by 2032 to accommodate the new jobs, averaging out at 8,805 sq m per annum. Replacement Demand E77. The productive life span of commercial buildings is calculated at around 50 years a blended replacement figure between different types of buildings that have varying life spans. The assumed 50 year life span is used to work out replacement demand, based on the age of the existing industrial and office stock. E78. Replacement demand for industrial stock is 144,026 sq m by 2032, averaged out at 6,262 sq m per annum. viii

10 E79. Replacement demand for office stock is 33,327 sq m by 2032, averaged out at 1,449 sq m per annum. E80. Due to the lack of choice of modern industrial properties available on the market, an additional supply for industrial space has been calculated at 10% of replacement demand. Future additional supply for industrial is 14,403 sq m by 2032, averaged out at 626 sq m per annum. Total Forecast Demand E81. The Economic Development policy-based scenario for economic growth requires around 158,429 sq m of additional industrial space by 2032, averaged out at 6,888 sq m per annum. E82. The Economic Development policy-based scenario for economic growth requires around 235,846 sq m of additional office space by 2032, averaged out at 10,254 sq m per annum. E83. Employment growth will require new business space in addition to the existing stock. E84. Replacement demand will require development of new sites outside the current industrial stock, but it is debatable what proportion of replacement demand will require new space and how much will be absorbed by demolition and re-build of the existing stock. However, as most of the dated industrial sites are located within city, there is significant pressure for change of use when dated buildings are demolished, meaning that many industrial sites are then subject to change of use. E85. Conversion of floorspace demand into net requirement of new land is based on business floorspace density / coverage of 4,000 sq m per hectare. E86. A contingency of 45% has been allowed for change of use between January 2005 and June 2009, 46% of identified business land was developed for uses other than office and industrial. E87. Around 57 hectares of land is required for industrial development by 2032, averaged out at 2.5 hectares per annum. However, this is entirely based on replacement demand and as new stock becomes available, some of this demand will potentially be absorbed by re-build of existing stock. E88. The potential supply of land for industrial development over the next 20 years is 59 hectares. Assuming that the barriers to the medium term industrial sites can be overcome, this 59 hectares should cover replacement demand for the current industrial stock. E89. Around 86 hectares of land is required for office development by 2032, averaged out at 3.7 hectares per annum. The majority of this demand (86%) is based on jobs growth. E90. The potential supply of land for office development over the next 20 years is 52 hectares (assuming that barriers to medium-term sites can be overcome), indicating a 34 hectare shortage of land for office ix

11 development. E91. Allowing for change of use of around 45%, around 34 hectares of land with good connections, close to the main population centre, with minimal concerns in relation to ground condition, public opinion and infrastructure needs to be identified for future office development. E92. Future office developments should reflect demand and offer small modern and serviced office accommodation in easily accessible locations. STAKEHOLDER VIEWS OF PROPERTY MARKET E93. Stakeholders considered a good location for investment. E94. Stakeholders recommend that clearer planning policy is required, outlining timescales and constraints associated with business sites. E95. Planning should safeguard business land for high value jobs, preventing it going for higher value uses. E96. Stakeholders perceived there to be a lack of guidance (vision) for the future development of. E97. Stakeholders reported that there was confusion over the role of the Development Agency and some felt that it is constraining development progress in, having created a closed market place. E98. Stakeholders did not perceive there to be an effective supply of business land. E99. A range of modern business accommodation needs to be provided to accommodate the needs of expanding local businesses as well as mobile and inward investors. E100. Stakeholders identified the need for a major new business area in. x

12 CONCLUSIONS Overall Market E101. has a reasonable track record of economic growth and the evidence shows that in terms of growth in number of jobs, this has been greater than the Scottish average for a number of years. The central location, the availability of good skilled labour and the outstanding quality of life make this an attractive area for businesses to locate in and do business from. E102. Adequate supply of business space is required to ensure long-term economic growth within the Council area. Additional business land will need to be allocated to accommodate future jobs required to meet population and economic growth. E103. The Economic Development team in Council has compiled an economic growth scenario for the Council area that takes account of the current recession, reflects on s past strengths and considers the Community Partners vision for sustainable economic growth in. E104. Future jobs growth will come from office based sectors, such as financial and business services. This fits with s Community Planning Partnership aspiration to provide more higher value jobs in the area. Most of this growth will be driven by small to medium sized enterprises, predominantly requiring small, modern and serviced office accommodation. E105. An additional 34 hectares of land needs to be identified for office development to accommodate future jobs growth in the Council area. E106. While industrial sectors are not forecast to grow overall, the type of demand for industrial property is changing over time, with a move from heavy manufacturing to lighter industrial uses, such as distribution, wholesale and utilities. This will require replacement of existing stock that is no longer fit for modern day uses. E107. Future development of the majority of business space will need to be concentrated in and around the urban area of in order to provide an employment base for the existing population centres in line with current National Policy. However, economic development within the rural area is vital for the sustainability of rural communities, providing jobs and opportunities. E108. New national planning policy has relaxed rules on economic development within the countryside, meaning that the new style Local Development Plan and the National Park Local Plan can now be more supportive of development in the countryside provided that it is sustainable. This may also include diversification from primary or land based activity, subject to certain criteria including design and scale. xi

13 Industrial Property Market E109. There is increasing pressure on the existing stock of industrial space from alternative uses (residential, retail, leisure) particularly in relation to centrally located sites. E110. has one of the lowest industrial availability rates in Scotland restricting opportunities for businesses to expand, downsize or move to more suitable premises. E % of available floorspace is pre-1960s, leaving limited choice and supply of modern industrial units with continued opportunities for renewal and redevelopment of stock. E112. There is strong demand for industrial units of less than 500 sq m. Office Property Market E113. There are pressures on key office locations from alternative uses including residential and retail. E114. There is strong demand for offices of less than 500 sq m. E115. Despite the economic downturn, occupancy rates remain high for most of s key serviced office locations. E116. There have been no significant office developments in the Council area since 2007, leaving a shortage in the supply of small new build offices. Retail, Tourism and Commercial Leisure Property Market E117. Although this Business Space Strategy is focused on provision of industrial and office space, it is important to recognise the importance of retail, tourism and commercial leisure to s economy. These sectors provide services and employment for residents, as well as boosting quality of life and attracting visitors to the area. E118. The Retail Capacity Study provides information on future retail requirements and will guide future allocation of land for retail use. E119. Supermarket interest is putting pressure on a number of industrial and office sites. E120. There is a gap in knowledge with regard to demand, take-up and supply of tourism, culture and commercial leisure business space. Business land Supply E121. A limited amount of business land (around 10 hectares) is recorded as being immediately available (e.g. within one year) with around 65% centered on two locations in and Dunblane. xii

14 E122. A lack of effective business sites in the short term together with pressure for alternative uses is likely to constrain economic growth. E123. The potential supply of land for industrial development over the next 20 years is around 59 hectares and the potential supply for office development is around 52 hectares. E124. A number of additional business sites have significant constraints that are likely to prevent their development in the timescale of the Local Development Plan. While enabling strategies such as new housing development might provide the financial catalyst that could trigger earlier development, sites like Bandeath are not ideally suited to the type and nature of the business space required. E125. The amount of business land under pressure for alternative uses is around 41 hectares, 37% of the supply of business land for the next 20 years. Since 2005, 46% of business land has been developed for uses other than office and industrial. E126. There is a latent shortage of land for self-build opportunities in the Council area. Despite the recession, Council s Property Service is still recording demand for self-build opportunities. Enquiries for Property & Sites E127. Most of the demand for office and industrial premises is for units of less than 500 sq m. Potential demand for industrial units of less than 500 sq m outweighs supply by seven to one and potential demand for office units of less than 500 sq m outweighs supply by two to one. Future Business Space & Land Requirements Industrial Office E128. Future economic growth will require around 158,429 sq m of replacement industrial space by 2032 to replace stock that is no longer fit for purpose, this includes an allowance of 14,403 sq m required to alleviate the low supply of modern industrial premises. This averages out at 6,888 sq m per annum. E129. Replacement demand for industrial space converts to a land requirement of around 57 hectares for industrial development by 2032, averaged out at 2.5 hectares per annum. However, some of this demand will potentially be absorbed by re-build of existing stock. The potential supply of land for industrial development over the next 20 years is 59 hectares, which should be sufficient to cover replacement demand provided change of use does not exceed the 45% contingency calculated. E ,846 sq m of additional office space will be required by 2032, consisting of 202,519 sq m to accommodate new jobs and 33,327 sq m to cover replacement of stock that is no longer fit for purpose. This xiii

15 averages out at 10,254 sq m of additional office space to be developed per annum. E131. Total forecast demand for office space converts to a land requirement of around 86 hectares for office development by 2032, averaged out at 3.7 hectares per annum the majority of this demand (86%) is based on new jobs growth. The potential supply of land for office development over the next 20 years is 52 hectares (assuming that barriers to medium-term sites can be overcome), which is not enough to accommodate future economic growth e.g. there is a 34 hectare shortage of land for office development. Stakeholder Views on the Property Market E132. There is a need for a Masterplan or vision for the future development priorities of. Clearly the new Local Development Plan, drawing on this updated Business Space Strategy, has the potential to satisfy this requirement. E133. Clearer planning policy is required, including timescales and constraints associated with key business sites. E134. Clarity is required on the role of the Development Agency, with current perceptions that it is creating a closed market place in. E135. Modern business space across a range of sizes is required to meet the needs of expanding local businesses and also inward and mobile investors. Some stakeholders also identified a need for a major new business area in. RECOMMENDATIONS Further Research E136. Council, in partnership with the National Park, should update survey data on demand for business space in the rural area. E137. Council should conduct a short investigative study before preparation of the Annual Business Space Update in 2010 to investigate further why availability rates at Castle Business Park are high in contrast to other office locations in. This should include research with property agents and local businesses to determine if there is any mismatch between supply and demand. E138. Council should prepare a review on demand, supply and takeup of commercial leisure and tourism business space. E139. Council should conduct a survey to map out employment density (jobs/hectare) for key employment locations in, e.g. Springkerse Industrial Estate, Castle Business Park, Enterprise Park and University Innovation Park. E140. Council should conduct a survey of key commercial property stakeholders every two years, alongside a short property survey of the Business Panel members. xiv

16 E141. Council should produce detailed property market assessments in the form of annual Market Activity Reports. Business Sites Database E142. Council should update their Business Sites Database annually to monitor change in status of sites and help inform future reviews of the Local Development Plan. This will inform future information on development of sites and help to assess progress towards overcoming (or otherwise) constraints. E143. Council should up-date the economic forecast scenarios used to work out future demand for business space every year. E144. Using results from the annual update of the Business Sites Database and updated economic forecasting, Council should produce an Annual Business Space Update report. E145. Council should write out to all appropriate private land owners associated with sites on the Business Sites Database to check the timescales estimated for sites against landowner aspirations for development. Planning Authorities E146. Council s Planning Authority should be more flexible to business space development in the countryside within the Local Development Plan. Where latent demand is identified through surveys conducted in the rural area (see 6.2.1), Council Planning Authority should look to identify new sites for sustainable business development in the rural area. The National Park will identify new sites for business space development within the National Park boundary in their new Local Plan. E147. Council s new Local Development Plan and the National Park Local Plan should include clear business in the countryside policy, enabling jobs growth in the rural area, including working from home. E148. Around 34 hectares of land with good connections, close to the main population centre, with minimal concerns in relation to ground condition, significant public opposition and infrastructure needs to be identified for future office development. While it is expected that most of this land should be developed in and around the urban area of, it is also necessary to provide jobs and opportunities in the rural area. E149. Council s Planning Authority should identify a major new business area within the new Local Development Plan, as recommended by key commercial property stakeholders. E150. Council should ensure that all effective business sites identified in this strategy for the next 20 years are allocated through the Local Development Plan for office or industrial use and that any constraints will be overcome within a set timescale. The Council will prevent the xv

17 loss of such allocated business sites for alternative uses and will continue to review these as part of the Local Development Plan review process. E151. Although the business sites at Pirnhall (Bannockburn Interchange) and University Innovation Park (Masterplan expansion options) are not considered part of the effective land supply for the next 20 years outlined in this strategy, the Local Development Plan should ensure that both these strategic sites are safeguarded for long-term office and industrial development. The sites occupy very well connected strategic locations and will play an important role in supply beyond the 20 year time period of the Local Development Plan if constraints are not overcome before then. E152. The Local Development Plan should provide a planning policy framework that allows for suitable non-speculative national and regional headquarter developments to come forward in appropriate locations. E153. The new Local Development Plan should adopt targeted allocation and policies, so that allocation of land, particularly around the city centre, ensures that sites are redeveloped for higher value jobs, rather than highest value uses. The economic data suggest that future high value jobs will be located in office accommodation. E154. The Planning Authorities should produce clear policy outlining timescales and constraints associated with business sites, drawing on the findings of the updated Business Space Strategy and information from the Business Sites Database. E155. Council should conduct a review of development mechanisms for delivering future business sites. This should include the Development Agency delivering sites in accordance with strategic economic objectives. This will help to inform the Action Plan that will sit alongside the new Local Development Plan. Property Development E156. Future industrial development should reflect demand and offer small industrial units, including self-build opportunities. E157. Future office developments should reflect demand and offer small modern and serviced office accommodation in easily accessible locations. Future Updates of Business Space Strategy E158. Based on the findings from the research recommended in 6.2.3, future business space requirements for tourism and commercial leisure should be built into future updates of the Business Space Strategy. E159. The Business Space Strategy should be updated every five years to inform the five yearly reviews of s Local Development Plan. An interim update may be required in the next couple of years to build in xvi

18 new data on business space requirements for tourism and commercial leisure. xvii

19 Contents 1. Introduction Background Objectives Method Sources Report Structure Contextual Overview Economic Context Economic Implications for Business Property Policy Context Policy Implications for Business Property Property Market Overview Introduction Industrial Property Market Office Property Market Retail, Tourism and Commercial Leisure Property Market Business land Supply Enquiries for Property & Sites Forecasting Future Growth Introduction Economic Forecast Economic Forecasting Scenarios Property Demand Forecast Stakeholder Views On Property Market Commercial Stakeholder Survey Conclusions & Recommendations Conclusions Recommendations Appendix 1 (Business sites Map)... 93

20 1 1. INTRODUCTION 1.1 In May to July 2009, Council undertook a review of the business property market across the area in order to update the Area Business Space Strategy. The Council area is covered by two planning authorities: The Loch Lomond & the Trossachs National Park is responsible for planning in a significant part of the rural area which falls within the National Park boundary, while the remainder of the area is the responsibility of Council s Planning Authority. 1.1 BACKGROUND In order for to be a successful and growing economy it must operate as a competitive location. One of the key factors in determining this will be the availability of a range of quality and appropriate business locations and property able to support the growth of indigenous businesses as well as offering an attractive proposition to mobile and new investment However, it is important to recognise that the environment within which now competes is changing and evolving with: - changes in the strategy and policy environment; - changes in organisational structures, partnerships and delivery; - ongoing market and economic changes, particularly the effects of the current recession; - new legislative developments; - changes in the types of land and property required by businesses; and - the developing land use planning framework This changing environment has led the need to provide an updated market appraisal of business land and property across the area in order to establish future requirements and identify any potential shortfall in current provision Business space acts as a catalyst for economic growth, is a key determinant of local participation (in employment) and depending on the type of use, can dictate the prosperity of local residents. Restrictions on the quality and quantity of business space can therefore restrict the economic capacity of a local economy This will ensure that the longer term economic development capacity and growth of the area is not constrained by a lack of suitable and appropriate business land and property This is the background against which the study was conducted.

21 2 1.2 OBJECTIVES The overall objective of this study is to provide a comprehensive set of recommendations to develop a Business Space Strategy for In more detail, the study seeks to: - Analyse the existing business property market; - Analyse the existing business property stock; - Provide estimates of the likely scale and type of future demand for business property; - Consider appropriate delivery mechanisms, including engaging with the private sector; and - Consider a range of wider property issues, as appropriate In addition, there was a requirement to consider the retail and tourism (including commercial leisure) sectors as these are important elements of the economy. These are, however, only considered where appropriate as part of the understanding of the economy and property market and are not the main focus of this study, which is aimed at updating the 2005 Area Business Space Strategy We also understand that these sectors are being considered as part of another strategic element of the Shaping Strategic Plan and the Community Planning Partnership s Single Outcome Agreement. The main focus of the overall study is concentrated on the office and industrial commercial sectors and business land identified in Council s Business Sites Database The Business Space Strategy will perform a number of functions: - Assist the Council s Planning Services in allocation of business land and development of the Local Development Plan; - Assist in making future decisions on project support; - Enable more effective engagement with the private sector; - Support a review of the Council and Development Agency property portfolios assets and development delivery mechanisms; - Assist in future partner funding bids; and - Provide information and support to preparation of future committee papers. 1 The Business Sites Database covers land allocated for employment purposes, including office, industrial and mixed-use developments.

22 3 1.3 METHOD The study analysis was conducted between May and July 2009 and comprised five key stages: - Desk research and analysis, including literature review; - Property market analysis and industry consultations; - Partner consultations; - Business space and Local Development Plan working group sessions; and - A number of steering group meetings. 1.4 SOURCES Throughout this report a range of data sources have been used to provide robust analysis. The sources used are: - Annual Business Inquiry (ABI) for employment, business base and sector analysis - Inter Departmental Business Register (IDBR) for business stock - Census for employment and travel to work patterns - General Register Office for Scotland (GROS) for population analysis - NOMIS for VAT registrations and VAT stock - Annual Population Survey (APS) for skill levels and economic activity rates - Claimant Count for unemployment data - Scottish Property Network (SPN) for data on stock, availability, take-up and commercial property transactions data - Council Business Sites Database - Council Planning Department Trade Use Survey for Springkerse Industrial Estate - Scottish Planning Policy 2, Clackmannanshire and Structure Plan, Council Local Plan and the Local Plan Alteration 1A and 2. - Loch Lomond & the Trossachs National Park Draft Local Plan In addition a range of reports, strategies and action plan documents, including guidance on business land reviews for English Regional Development Agencies, were reviewed and informed the approach to the study. This report updates the previous Area business Space Strategy compiled in 2005 by EKOS and Ryden. The report follows a similar format to the 2005 Strategy, but includes some additional information on business sites and also different scenarios for future economic growth.

23 4 1.5 REPORT STRUCTURE The remainder of this report is structured as follows: Chapter 2 provides an economic and policy overview for with comparative and time-series analysis; Chapter 3 considers trends in the property market and reviews business land; Chapter 4 provides a forecast of future economic and property requirements in and estimates future property demand; and Chapter 5 identifies the key issues and opportunities that currently do, or that have the potential to, influence the operation of the property market in ; and Chapter 6 presents conclusions and recommendations on future business space priorities for in a strategic framework and scopes out the future Action Plan. CHAPTER 1 SUMMARY (INTRODUCTION) 1. Business space acts as a catalyst for economic growth, is a key determinant of local participation (in employment) and depending on the type of use, can dictate the prosperity of local residents. 2. Adequate supply of business space will ensure that longer-term economic development capacity and growth of the area is not constrained by a lack of suitable and appropriate business land and property. 3. This Business Space Strategy seeks to: analyse the existing business property market; analyse the existing business property stock; provide estimates of the likely scale and type of future demand for business property; consider appropriate delivery mechanisms, including engaging with the private sector; and consider a range of wider property issues, as appropriate.

24 5 2. CONTEXTUAL OVERVIEW 2.1 ECONOMIC CONTEXT Demand for property 2 is a derived demand. It is driven by demand in the economy for goods and services provided by businesses and other organisations. The demand for property comes from the need to accommodate employees and products and also for space from which to trade. The current economic downturn will have an impact on business space as demand for goods and services changes and access to finance for business start up and growth is constrained In order to fully understand the future property requirements for the area it is essential to understand the make-up of the local economy (including key sectors); past trends; and importantly, likely future trends. Our analysis aims to identify past and potential future growth scenarios and therefore understand the likely future demand for property within the area. Due to the time lag in most economic data being produced, it is hard to predict the full effect of the current economic downturn, so growth scenarios are used in Chapter 4 to look at potential future demand Table 2.1 below provides an overview summary of the headline economic indicators for the economy, bench marked against data for Scotland as a whole. HEALTH WARNING Economics is not an exact science and economic forecasting is notoriously difficult. Economic data can be interpreted in many ways and there are also different sources from which you can draw contradictory conclusions. We therefore use the economic data to provide us with clues as to possible future scenarios. It can be particularly useful when this is combined with other inputs such as the property market analysis, trend analysis and some practical experience. The current economic downturn presents additional difficulties as no one is sure how long the recession will last and the exact shape economic recovery and future growth might take. For this reason, it is important to look at a number of scenarios for future growth, and to update these every year to take account of new developments in the economy Early indication of the impact of the recession and its duration are outlined in a number of recent reports. For example, Ryden (2009) 3 reported that economic growth across Scotland was muted in 2008 and this has now reversed into a sharp recession. Forecasts for 2009 and 2010 suggest a ripple effect from the credit crunch into the wider economy. Ryden (2009) reported: The Consensus forecast for UK economic growth published by HM Treasury predicts a fall in output of 3.4% during 2009 and growth of 0.3% in For Scotland, Fraser of Allander Institute s central forecasts are for falls in output of 2.6% in 2009 and 1.2% in In this context includes all types of business property demand, but not residential demand. 3 Ryden April/09: 64 th Scottish Property Review.

25 6 TABLE 2.1: SUMMARY OF ECONOMY OF STIRLING AND SCOTLAND Population (GROS) year change year change 88,350 86, % 84, % Scotland 5,168,500 5,057, % 5,077, % Working Age Population (GROS) year change year change 54,341 53, % 52, % Scotland 3,238,035 3,156, % 3,145, % Working Age Population as proportion of Total Population (GROS) year change 61.5% 62.1% -0.6% Scotland 62.6% 62.4% +0.2% 2006-based Population Projections (GROS) 2006 Population % Change % Change Total 87, Working Age 54, Scotland Total 5,116, Working Age 3,212, Economic Activity Rates (% of Working Age Population) (Annual Population Survey) Total Males Females Oct-07 to Sep- 08 Oct-04 - Sep-05 3-year change Oct-07 to Sep- 08 Oct-04 - Sep year change Oct-07 to Sep year change Scotland Unemployment (% working age residents) (Claimant Count) Total Males Females Oct-04 - Sep- 05 April-09 April year change April- 09 April year change April- 09 April year change Scotland Business Stock (Scottish Corporate Sector Statistics, IDBR) year change No. % 3,960 3, % Scotland 154, ,890 7, % VAT Registrations (Nomis) VAT Stock (2007) VAT Stock per 1,000 of population (2007) 3, Scotland 141, Survival of Newly Born Enterprises (Business Demography 2007, ONS) VAT Stock per 1,000 of working age population (2007) 1-year Survival Rates (registered in 3-year Survival Rates (registered in 2004) 2006) 97.1% 63.5% Scotland 96.5% 64.3% Working Age People with NVQ (% of Working Age Population) (Annual Population Survey) NVQ Level 3+ or equivalent NVQ Level 4+ or equivalent year change year change Scotland Employment Origin & Destination (Census, 2001) Residence Workplace Clack s Falkirk Rest of UK Total Clack s 11,291 1,523 4,522 3,138 20,474 Falkirk ,686 3,833 15,887 65,133 1,289 2,527 26,276 8,170 38,262 Rest of 1,509 8,465 5,439 UK Total 14,816 57,201 40,070

26 7 Notes: The retirement age for women will increase gradually from 60 to 65 from 2010 fully implemented by April The working age projections for 2020 and 2030 include women aged Key issues or trends that can be identified from Table 2.1 and from review of economic data are: - In 2008, accounted for 1.7% of the total Scottish population. has been growing in population size, and this trend is set to continue, both in terms of total population and working age population. By 2030 is forecast to account for 1.8% of the total Scottish population, driven by a population rate increase of 11.3%, more than double the 5.0% projected rate of growth for Scotland as a whole. - The proportion of s population that is of working age is declining, in contrast to figures for Scotland as a whole. Despite this, s working age population is projected to increase by 8.2% by 2030, in contrast to a 1.0% increase for Scotland as a whole. However, this increase is due to the female retirement age increasing to 65 by 2020 and the retirement age for both males and females changing to 66 between 2024 and By 2030, the proportion of s population that is of working age is projected to be 60.1%, similar to the 60.4% average for Scotland as a whole % of the total working age population of are in employment, roughly similar to the Scottish average (76.3%) % of s working age population was defined as economically active (in work or seeking work) in the year October 2007 to September 2008, slightly higher than the Scottish average of 80.0%. However, unemployment figures available for April 2009 show that there has been a sharp increase in unemployment over the last 6 months, meaning that s employment rate is likely to drop in Around 12,000 residents commute out of the area. Of these, 8,000 commute outside Forth Valley, with the majority traveling to Glasgow and Edinburgh. This is an increasing trend with around a 15% increase in out-commuting over the last 10 years. - Around 14,000 workers live outside the Council area. Most of these workers (around 8,400) commute in from other parts of Forth Valley. - is a net importer of labour, e.g. net in-commuting of around 1,800. has more jobs than working age residents (40,070 jobs, 38,262 residents) with 1.05 jobs per working resident. One in seven jobs are filled by in-commuters. - Commuting is going up between the 1991 and 2001 Censuses, the number of people in Forth Valley traveling short distances (less than 5 km) to work went down, while the number traveling medium distances (10 to 40 km) increased and the number traveling longer distances (40 km plus) increased most of all. - Looking at the number of residents in employment versus the number of jobs in the Council area would indicate that the number of in-commuters is increasing (Annual Business Inquiry / Annual Population Survey/Labour Force Survey). In 2007