Research Brief
Employment Land – Need and Demand
Purpose of Research
To provide a firm evidence base for policy on employment land uses (other than those related to agriculture, horticulture or the related rural economy) as part of the Jersey Island Plan Review.
Background
The States of Jersey is a crown dependency but not part of the United Kingdom situated off the Normandy and Brittany Coasts. The elected States of Jersey handles all governmental matters except foreign affairs and defense. The States are not obliged to accept new laws recommended by the United Kingdom. The States has its own legal system based on ancient Norman Custom Law. Jersey is not a member of the European Union having its own special relationship with it. The Island is divided into 12 parishes which deal with some local matters such as minor roads. The Island is proud of its own distinct culture and history blending French and English influences.
Jersey has its own planning system similar in some regards to that of the United Kingdom but simpler and adapted to its own circumstances. There is a system of development control and a statutory development plan, known as the Island Plan, now subject to a major review. The review of the Island Plan is a priority of Jerseys Corporate Plan.
Jersey publishes a considerable volume of economic statistics including an annual economic digest. However reliable data on the size of the Jersey economy only exists from 1998 onwards with the latest data being from 2004 (data on 2005 will be published in December).
Jersey has seen significant changes to its economy in the post war period. Agriculture, though still of great importance, is no longer the main sector accounting for only 1% of gross value added in 2004. Financial services accounted for 51% of gross value added. The Islands Economy is now growing following a downturn between 2001 and 2004.
In relative term employment levels in Jersey are high. There are an average of 1.24 full time equivalent employees per household in Jersey compared to 0.96 in the UK (source jersey Economic Digest 2004). There is considerable seasonaility in employment levels but this has lessened in recent years.
Tourism is also in decline and in the process of restructuring.
The greatest growth has been seen in the financial services.
Jersey employs strict occupancy controls in terms of both employment and home ownership. This limits population growth on the Island. More recently there has been concern about the potential impacts of Jersey’s aging population and the fiscal burden this will impose. Consequently the States of Jersey will shortly be undertaking consultation on a range of population growth scenarios, some of which would imply in-migration of workers to growth sectors, and implications this would have on matters such as taxation, retirement age, infrastructure and housing required.
Key Issues
Almost a quarter of Jersey’s labour market is now employed in the finance sector (2004 Jersey Economic Digest). The next largest sectors in terms of employment are wholesale and retail, accounting for about 1/6th of total employment and the public sector and hotels restaurants and bars each accounting for about 1/8th of total employment. Less than 4% of total employees were in the agricultural sector.
· In July 2003 a report entitled “A briefing on the industrial property market” was prepared by Mr Simon Buckley of messrs Cushman & Wakefield Healey & Baker for the Environment and Public Services Committee. The report included the following comment:
“there continues to be a considerable shortage in supply of industrial buildings to satisfy the growing occupier demand. The trend seems set to continue until new purpose built space is provided but due to a restricted planning regime and competing land uses it is difficult to see where the opportunity to develop will come from”
· On the 22nd January 2004, following the receipt of a report dated 14th January 2004 from Mr P Thorne, Director of Planning and Building Services, the Environment and Public Services Committee agreed the following:
“that those seeking industrial premises in the foreseeable future be advised to consider redundant agricultural buildings. The committee also agreed that a collaborative effort between the Policy and Resources Committee and Finance and Economics Committee was required to ensure that future industrial requirements were met in a timely manner”
· On the 1st June 2004, Deputy Patrick Ryan of the Economic Development Committee Construction Industry Board wrote to Peter Le Gresley, Assistant Director of Development Control and the letter contained the following comment:
“The Construction Industry Board at its meeting on the 21ts May 2004, considered the availability of industrial workspace being made available to small industry related contractors. The Board believed that there was an insufficient supply of light industrial workspace available at present.”
· The information below sets out the States Economic Development Departments’s understanding of the light industrial / warehousing market at present, bearing in mind current Planning Policy as set out in the 2002 Island Plan, their knowledge of the current level of demand through the marketing of Phase I of Haut du Mont Park and the results of a survey undertaken by the Jersey Chamber of Commerce in December 2006.
General Background
· At present we estimate that the current stock of industrial accommodation is in the region of 1.5 million sq.ft (139,354 sq.m). This is situated on a diverse array of sites throughout the Island with the main locations being La Collette, Albert Pier, Rue des Pres, St Peter’s Technical Park, Landes du Marche, Pallots, Springside and Normans at Commercial Buildings and Five Oaks. In addition to the aforementioned there are a number or smaller secondary locations such as Thistlegrove, Plat Douet and the Barrettes site in St John.
· The quality of the existing stock ranges considerably from new purpose built accommodation with high eaves and good access at La Collette to converted poor quality farm buildings. Much of the existing stock has evolved over the years and is now constrained by Planning or geographical restrictions. Many of the sites therefore suffer from very poor circulation and parking provision. Access to the sites is also poor and indeed undesirable particularly for larger vehicles where premises are situated in rural areas.
· Rentals for good quality warehouse / light industrial accommodation are currently in the region of £8.50 to £9.00 per sq.ft. Rentals for the top quality accommodation in prime locations such as La Collette and around the Albert Pier are in the region of £10.00 to £12.00 per sq.ft. Rental inflation over the past 5 years has been high and commensurate with the current strong demand and lack of supply particularly for the best quality accommodation.
· The quality of the existing industrial stock varies consdierably but much of it suffers from physical or geographical constraints. Particular problems are poor quality buildings, poor access and lack of amenity space.
Planning Background
· At the time the Island Plan was published in July 2002 it was noted that there were requirements for some 25,000 sq.m or (270,000 sq.ft) of “industrial floor space”. Therefore since the adoption of the Island Plan, the level of demand has remained fairly constant and has not been reduced by a significant proportion.
· It was highlighted in the 2002 Island Plan that to assist with the relocation of businesses from the town centre in order to release land for housing and other more appropriate uses, there may be a requirement for a further 17.4 acres or 7.04 hectares of industrial land. Based on an approximate ratio of floor space to site area of 1:2 this would equate to a further 379,000 sq.ft (35,210 sq.m) of industrial accommodation.
· The 2002 island plan highlighted a requirment for 270,000 sq.ft of “industrial floor space” and this has not been reduced.
Actual Requirements
· BDP currently have requirements from 27 named parties for light industrial / warehousing accommodation totalling some 250,000 sq.ft. It should be noted that not all of the applicants have actually specified a size requirement and this figure is therefore a conservative estimate.
· The approximate size ranges of the above requirements can be summarized as follows:
Size Range (Sq.ft) | |
20,000 + | 55.00% |
10,000 to 19,999 | 12.00% |
5,000 to 9,999 | 28.00% |
1,000 to 4,999 | 5.00% |
| |
Total | 100.00% |
· It is clear from the above that the bulk of the interest is for accommodation in excess of 20,000 sq.ft and for accommodation in the 5,000 to 9,999 sq.ft range. In particular we can confirm that all of the parties with larger space requirements have specific interest in Haut du Mont Park because there is no other space available or in the pipeline which can meet their requirements.
Demand Information
· We are currently aware of requirements for approximately 250,000 sq.ft (23,225 sq.m) of light industrial accommodation. This demand ranges for accommodation from 3,000 sq.ft (278 sq.m) upwards. See section above.
· The current level of demand represents approximately 15.63% of the total light industrial / warehousing stock.
· Based on an approximate ratio of floor space to site area of 1:2 the current level of demand equates to approximately 11.48 acres or 4.64 hectares of land.
· Taking in to account the known requirements for light industrial / warehousing accommodation and the possible additional requirements referred to above in “Planning Background”, the total requirement for land suitable for this use could equate to 28.88 acres or 11.68 hectares of land.
· The majority of the current demand is being driven by businesses wishing to expand or obtain improved operational capabilities through the use of more efficient premises. Almost without exception the occupiers seeking accommodation require:
1. Internal eaves height of 8 meters or more to achieve the best possible cubic capacity.
2. Premises should be of a clear span portal frame construction with, insulated external cladding and a floor slab capable of supporting a loading of 50 kn / sq.m or 1,000lb / sq.ft
3. Loading doors of approximately 4.8m x 4m.
4. Location close to St Helier and with good road access.
5. Good car parking, circulation and access for larger vehicles.
· Taking in to account the known requirements for light industrial / warehousing accommodation and the possible additional requirements referred to above, the total requirement for land suitable for this use could equate to 28.88 acres or 11.68 hectares of land.
Chamber of Commerce Survey
· A survey was conducted of the membership of the Jersey Chamber of Commerce in December 2006. 48 parties responded to this and of this, 22 had requirements for additional storage or light industrial facilities. 58% of the respondents had a requirement for “general warehousing” and 17% for “light industrial”.
· 22% of the respondents have been looking for accommodation for over one year.
· The survey is slightly inconclusive as to the exact requirements of the parties and so it is difficult to use this confirm the BDP requirement figures. The analysis of the Chamber of Commerce figures is as follows:
Less than 1,000 sq.ft | 29% |
1,000 to 5,000 sq.ft | 50% |
5,000 to 10,000 sq.ft | 13% |
10,000 to 20,000 sq.ft | 4% |
Over 20,000 sq.ft | 4% |
· The survey posed the question “to what extent do you agree that the existing provisions within the Island Plan are restricting access to appropriate facilities to meet you requirements?” 62% of the respondents either agreed or generally agreed with this statement.
· The survey also posed the question “what impact is the lack of available facilities having on the ability of your business to develop?” 15% of the respondents stated that the lack of facilities was having a “major impact” and 31% stated that the lack of facilities was having an “impact”.
· Tourism is seeing a long term decline. For many years bedspaces were capped to 30,000 to limit the impact on the islands environment and infrastructure. Many bedspaces have now been lost to higher value housing use and the sector is trying to restructure around short break/higher value added tourism such as spa and conferences, which have less seasonality. Between 1996 and 2005 employment in Hotels, restaurants and bars fell by 1,610. Registered bedspaces fell from 20,738 in 1997 to 13,710 in 2004. A decline of around 4% per year. Jersey is also weakly represented in the self catering accommodation sector.
· Changes in the agricultural sector has led to significant changes from small mixed farms with increased specialization and food processing being concentrated in a very small number of suppliers. There is pressure to relocate certain town based facilities to rural areas to realize the value of sites for housing. The same is happening in the tourist sector.
· Warehousing is important to an island economy where so many goods have to be imported or exported. The Island has created land through land reclamation next to the port to help accommodate this whilst some traditional port land has been developed for housing, office and leisure uses.
· The waterfront developments has released considerable modern premises for financial services, the result of planned developments is that around 250,000sq’ of secondary office accommodation in St Helier is expected to become vacant with significant levels of vacancy already experienced in traditional office areas. Some of this may become occupied by other office uses as the prime rents that could be afforded by the financial services sector may have had the effect of ‘squeezing out’ other sectors.
Key Tasks
There is a need to provide an up to date evidence base for the Island Plan Review so that the policies contained within it are justifiable to the independent inspector who will examine the plan.
The consultants will be required to:
1) Produce a model of the projected employment growth/contraction, by employment sector/land use (industry/warehousing and offices), for 15 years from 2009 for each of the population growth scenarios the States of Jersey are now considering, using the existing States CGE economic model
2) Consider the adequacy of the existing stock of buildings available to each sector, utilizing the existing evidence above
3) Consider whether in the light of these projections whether there is any public policy/welfare economics justification for additional release/rezoning of land for any specific sector and/or protection of land in current zoning where threatened by loss/redevelopment for other uses, over the next 15 years. This assessment should consider the potential economic disbenefits of restrictions on the highest land value use as well as public benefits obtained through retention of land in the current use (such as agriculture). Recommendations should be made in terms of tranches of 5 years.
4) In the light of these projections make spatially specific recommendations, including of preferred and suitable spatial locations, for inclusion in the Island Plan review.
The consultancy team should be aware that Jersey has its own system of use classes.
Separate studies are being prepared for agricultural and retail capacity and need. Whilst these sectors should be included in any modeling of employment levels site specific work is not required for these sectors. Close working will be needed with the consultants preparing the retail study to ensure modeling assumptions are consistent. The agricultural work is being done in house.
The final report should pay particular attention to the needs of small businesses and high growth emergent sectors.
Specific recommendations should be made as to the essential land use requirements of port and airport related industries.
Key Stages
Project Inception – Day One
Progress Meeting – Week Two
Progress Meeting – Week Four
Handing in of Draft Employment Modelling Scenarios – Week Six
Handing in of Draft Employment Land Evaluations and Draft Covering Report – Week Eight
Completion of Project – Sign off Meeting – Week Twelve.
The successful consultancy team will be supplied with GIS files and relevant material relating population and employment statistics on the Island.
The final reports should be provided as word and excel documents.
8 hard copies of the final report should be supplied.
Whilst having regard to best practice in the UK and elsewhere the research will need to be tailored to Jerseys unique needs, in particular its joint and integrated approach towards population, employment and land use planning.
Proposal Requirements
· Potential consultancies should indicate the practices background in this kind of work.
· They should indicate the staff to be assigned to this work, their background, qualifications and experience, and breakdown of workload by each staff member.
· The suggested study methodology should be outlined.
· A fee proposal should be submitted which should be inclusive of all expenses and disbursements.
· Interviews may or may not be necessary – if necessary they will take place on the….
· The contract will not solely be awarded on the basis of the lowest tender.
· All submissions should be made by xxxxx and be less than 10 sides of A4 in length.
· The study itself should be less than 50 pages in length (excluding appendices)
Contacts
Island Plan Review Consultant – Andrew Lainton – Project Manager for the Research Project
gov.je