In his first contribution to Talking Business in 2017, Stephen Salloway Managing Director of commercial experts Salloway Property Consultants responds to the Government's 'Industrial Strategy' Green Paper by suggesting that Derby could become an exemplar industrial city which leads the way in a new industrial revolution.
The industrial and logistics market in Derbyshire and the East Midlands generally, is strong and thriving. Property enquiries are numerous, demand is high and values are increasing. The long awaited upward 'correction' in property rents and capital values, which have been falsely flat as a hangover from the financial crisis - now over a decade ago - is happening. It seems clear to me that the local market is in an expansion phase and we must do our best to harness it and make it sustainable.
Prime examples of the upturn include the speculative building of a 118,000 sq. ft. unit at Dove Valley Park which has drawn interest from various quarters in both logistics and manufacturing sectors. Terms have been agreed and a letting is imminent to a manufacturer. SGS's growth has seen them expand into a brand new 70,000 sq. ft. plus HQ facility at Westside Park on Raynesway which comes on the back of the letting to Ted Baker at Derby Commercial Park nearby. Aldi are also underway with their regional distribution depot at Sawley and there is a deal for a new 15,000sqft workshop on the cards at Victory Park. These are just a few of the recent property deals which show clear signs of strengthening market activity.
So given our boiler is fully stoked and we appear to be steaming on down the tracks, why do we need an Industrial Strategy? Well, the enemy of an expanding market is lack of capacity - and it's here we have an issue.
I have been banging the drum for infrastructure delivery through devolved powers and proactive planning policy since what feels like the dawn of time. Away from grandiose hypothesis and rhetoric, which in my opinion marred our former Chancellor's attempts to impose devolution, for me the proposed Industrial Strategy offers a practical chance to bring about a rebalancing of assets and growth within a manageable area of the economy and delver the 'hard and soft' infrastructure we need to progress.
However, Derby must remember that not all of what is proposed in the new Government initiative will be relevant to us. We start from an impressive foundation which others can only look upon with envy and we must therefore stand on our own two feet to retain and develop our standing as a premier destination for investment by building on our advanced manufacturing bedrock and our embedded culture of innovation.
So as the Government tries to redress the investment balance, what should Derby do to ensure that its successes do not lead to it being overlooked? In my opinion Derby should set an example and put in place its own Industrial Strategy with the intent of becoming an 'exemplar' industrial city of the future - leading a modern, post-Brexit industrial revolution.
How could this be achieved? I suggest that with support from D2N2, let's establish a public/private sector partnership to establish Derby's Industrial Strategy and be at the forefront of the new industrial revolution. There may be good reason to have a joint strategy with Nottingham but from Derby's perspective I would like to see a programme put in place to:
- Extend the life of existing property supply by reinvigorating established industrial estates such as West Meadows and Osmaston Park (Ascot Drive) with funding for refurbishment, improved vehicular access, improved public transport and car parking for employees, better environments through hard and soft landscaping
- Increase capacity by encouraging speculative development of new industrial units through innovative funding models
- Ensure that utilities infrastructure and capacities, particularly electricity, is available to existing and new developments and also that the fastest available broadband is connected
- Provide ongoing support for existing OEM's to encourage growth and regeneration of existing facilities to cement their long-term commitment to the city; and seek their help persuade supply chain companies to be locally based
- Identify the sectors which the city will depend upon to drive its economy forward for at least the next generation(s) – which might possibly include some divergence from high end engineering
- Determine which key skill sets are needed to support these sectors and engage with education providers so that courses can be tailored
- Ensure that housing provision of the right calibre is available to retain and attract an appropriately skilled workforce and create a great place to live through market focused town planning
With a clearly defined industrial strategy in place, there will be greater clarity in terms of the city's target markets for inward investment and better opportunities to build trade-relationships with other towns and cities which the removal of the EU shackles will allow.
It cannot be denied that London and the south east is a magnet for attracting international investment into the UK and this is likely to remain the same after Brexit, even if the sources of investment source change. But Derby can generate its own magnetism if it can define itself as leading the way in specific sectors and becoming the exemplar industrial city and the turbo-charger for the Midlands' Engine. Let's go for it!