A product of the booming economy of the 1980s, business parks have evolved significantly to keep up with current trends in working habits. The successful parks of today are almost unrecognisable from their former selves and provide a home for thriving, expanding businesses in the UK.
The early business parks
In 1987 the creation of the B1 use class allowed a switch between office, light industrial and R&D uses without planning permission for the first time. It was designed to meet the needs of an expanding and evolving technology sector and coincided with the completion of the final section of the M25 motorway around London.
A number of forward-looking developers took a fresh look at the industrial estates of old to create the first office-led business parks.
The Thames Valley was a key area for this development due to transport links, one of the best examples being the well-know Stockley Park near Heathrow; a 400 acre former refuse tip was originally proposed for industrial development, but its proximity to the airport and M4 motorway led to it being repositioned as a 2 million sq ft business park - it is now home to multiple corporate headquarters.
However, while this style of working suited some sectors, most notably pharma and the high tech industries, the early business parks lacked support facilities and amenities, such as cafés, shops and public transport.
Reinvention is the name of the game
Since the start of the dot-com boom in the late 1990s, there has been a step change in what businesses, and the people working for them, expect from their office environment.
Working patterns have changed significantly with technology, enabling a more flexible approach to the way in which people run their lives at work and home.
business parks in particular have had to attract and retain a wider range of tenants with developers realising that they need to offer much more in order to lure businesses and their more demanding staff away from the perceived attractions of the city centres.
Factors for success
Business parks were initially seen as an environment for technology-based companies, but in recent years their appeal has spread to a broader occupier base including Pharmaceuticals, Utilities, Oil & Gas and Media, all of whom benefit from larger floor plates, which are much more difficult to come by in town centres.
The North of England and Scotland have tended to appeal to those seeking a wide staff catchment area with a lower cost base and locations such as Newcastle, Leeds and Glasgow benefited greatly from the call centre boom in the 1990s and 2000s. In recent years, there has been a trend for these services to be off-shored, but quality control concerns have led many corporate to review this policy with jobs now returning to the UK.
There has also been a growth in SMEs moving onto business parks in recent years. These businesses are being offered flexible terms and are taking small offices with the option to expand as the company grows.Flexible leasing packages are key to this sector with most parks now providing serviced or managed office facilities of some kind.
Critical mass is also an important factor for the success of a business park, as it will determine whether facilities and transport connections are viable and cost effective. As a rule of thumb, a business park needs to be at least 1m sqft in size with upwards of 5,000 occupants for it to support shops, gyms and other facilities, and to enable a virtuous circle with all uses becoming inter-dependent.
A good example of this is Green Park, Reading, which has a 4* hotel, conferencing facilities, a restaurant and gym/pool with the first standalone Asda “click and collect” outlet in the country.
The sustainability issue
The way in which sustainability is approached has also evolved; once an aspiration that was regarded as an additional capital expense, it is increasingly seen as a way to drive down occupational costs and make a building or park more competitive. More sustainable buildings with lower emissions should generate significant savings over the term of a lease.
Public transport and cycling are also becoming a bigger part of the mix. Yes, a nearby airport and motorway is still critical, but rail links are also important, as are bus services connecting staff to them.
What’s next for business parks?
There are now a range of business parks across the country appealing to different business needs, including the introduction of mid-urban parks, such as Chiswick Park in West London, which is unusual in being able to offer large floor platesin a landscaped environment within walking distance of town centre amenities.
While business parks have shown that they can adapt and refresh their offer, it’s unlikely we will see the development of any new schemes for the foreseeable future, owing to the high upfront infrastructure costs and tighter car parking standards, even when the current downturn is behind us.
What is happening, however, is the on-going development of existing business parks, such as at Green Park, which have land for future phases where the developer can respond quickly to market conditions and improving occupier demand.
A new seam of occupier demand from the East is emerging, with Chinese companies expanding in the UK. Telecoms giant Huawei will be moving over 1,000 jobs to Green Park in the spring of this year following their 140,000 sq ft acquisition in mid 2012. Others are expected to follow suit.
The statistics produced by Cushman & Wakefield speak for themselves, with out of town locations accounting for over two thirds of the office space leased in the Thames Valley and main regional markets last year.
A few years ago, some observers were predicting that the days of the business park were numbered as the focus seemed to be moving towards town centres. However, there is now a resurgence in the popularity of the better served and located parks that have been able to reinvent themselves to continue to appeal to a changing market.
The future of office space
Help is at hand for developers of business parks and other office environments, to identify future requirements from prospective tenants.
According to a recent report by Green Park, Reading, and Henley Business School, flexibility in workplace set-up is key to meeting the tough challenges employers face in attracting, motivating and retaining the best talent.
Findings identified from the survey of 1,500 office workers as part of the report include:
Employers offering locations and work facilities, which feature a flexible blend of layouts, facilities and services that make employees lives easier and engage a diverse workforce demographic,are going to be best placed to meet future workplace needs.
The full Green Park / Henley Business School report can be read here.
About the author
Charles Dady heads Cushman & Wakefield’s Business Space division and has specialised in office agency for over 20 years. In 2003 he established a Thames Valley office for C&W, the first global property firm to do so.
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