Commercial and Industrial Floorspace
2007

Introduction

The report provides a summary of selected hereditament, floorspace and rateable value statistics compiled for England and Wales, the Government Office Regions, local authority and Medium Super Output Areas as at 1st April 2007.

The information comes from the administrative databases used by the Valuation Office Agency and has been processed by the Department for Communities and Local Government. The figures have been obtained from the Neighbourhood section of the Office for National Statistics website. All the Lancashire results have been added to our Data Download Centre and the district results can also be found in the Business Activity Area Profiles.

The basic unit of data are individually rated properties known as hereditaments. These generally correspond to an extent of contiguous or adjacent space appropriate for a single occupant. A large office or mixed use commercial building will, if shared between several tenants and owners, consist of several separate hereditaments. Conversely a single large hereditament may be comprised of many distinct buildings, for example a large factory complex on a single site.

The hereditaments represent the unit to which the Valuation Office assigns a rateable value. Vacant floorspace is included in the data as vacant premises are liable to be valued and the rateable value is not affected by the fact that a hereditament is occupied or not.

This research monitor has information for the five different types of hereditaments (known as 'bulk classes') that cover retail, offices, factories, warehouses and other bulk premises.

The monitor also includes details of a selection of Lancashire-based firms that have interests in industrial and commercial property developments.

Revaluations and Data Consistency over Time

The Valuation Office Agency revalues commercial and industrial property every five years to set rateable values in line with an assessment of the current commercial and industrial rental market. The statistics for 1st April 2007 are based on the 2005 Value Office Agency revaluation. The changes occurring for this revaluation had a significant and unavoidable impact on the continuity of the statistics with those for 2000 to 2004. For this reason, users are advised to exercise caution and note how the revaluation has affected totals if comparing statistics for 2005 to 2007 with those for 2000 to 2004. This particular research monitor only considers the 2007 results, but the figures for earlier years can be obtained from the websites already mentioned.

The Five Bulk Classes

Retail – premises that provide 'off-street' goods and services to the public, including showrooms and a range of retail services as well as restaurants and cafes. The figures are for the net internal area (most of the space useful to the business) and exclude common areas such as stairwells and foyers. Two significant omissions in this group are public houses, which are classifies as non-bulk and garden centres, which are usually classifies as 'other bulk premises'.

Offices – purpose built office buildings, offices over shops, light storage facilities and light industrial activities. Larger banks, building societies and post offices containing substantial office space may be included in this class, rather than in the retail bulk classes.

Factories – including mills, works and workshops. Industrial hereditaments where the rateable value is not primarily derived from floorspace (e.g. certain chemical works, refineries) are classified as 'non-bulk'.

Warehouses – ranging from small storage units and depots to very large distribution warehouses. Car showrooms are mostly classified as warehouses.

Other Bulk Premises – From 1998 to 2004 there were four bulk classes, but 'Other Bulk Premises' was a new edition for 2005. This includes a variety of premises that do not fall into one of the other four bulk classes. It includes garden centres, community centres, village halls and social clubs. Building use types are generally not available for this bulk class.

The hereditaments which do not fall into one of the five bulk classes are collectively known as 'non-bulks', and floorspace and other descriptive statistics are generally not available for non-bulk hereditaments. They include premises such as car parks, public houses, advertisements rights, holiday homes and communications stations.

Summary of Results

Table 1 shows that there was just over 18.2 million square metres of commercial and industrial floorspace in the Lancashire NUTS-2 sub-region in 2007, representing 3.0% of the England and Wales total and 21.1% of the North West Region total. Retail premise in the broader Lancashire area accounted for 17.1% of the total, 10.4% was offices, 42.1% factories and 27.8% warehouses. A small amount of additional space (around 2.7% of the Lancashire total: 489,000 square metres) is classified under the 'Other Bulk Premises' heading which is accounted for in the totals in Table 1 but not listed separately.

Relative to England and Wales, Lancashire had similar shares of retail and warehouse floorspace, but not surprisingly, given its industrial structure, much higher shares of factory space and a correspondingly much lower representation of offices. The Annual Business Inquiry data reveal the high level of manufacturing employment and low levels of service sector employment in Lancashire relative to the national average. The floorspace statistics reflect employment levels and show that for England and Wales as a whole, the share of factory space is 6.5 percentage points lower than in Lancashire NUTS-2, whilst in comparison the share of office space is 6.4 percentage points higher.

Overall, the average size of hereditaments in Lancashire at 444 sqm was larger than the England and Wales average of 420 sqm. However, this was wholly attributable to the average local factory hereditament size that was approaching 15% larger than the England and Wales average; all other bulk classes had smaller average floorspaces than for England and Wales as a whole.

Within the Lancashire NUTS-2 area the greatest amount of commercial and industrial floorspace was by far in Blackburn with Darwen with 13.5% of the total, followed by Preston (10.7%), with the least amounts in Fylde (3.4%) and Ribble Valley (2.9%).

The relative distribution of floorspace across the bulk classes varied greatly between districts (Figure 1). For example, Blackpool had the largest amount of retail floorspace of any district (475,000 sqm or 15.3% of Lancashire NUTS-2 retail total) and this accounted for 35.3% of the total for all bulk classes in the district. At the other extreme, just 8.8% of floorspace in West Lancashire was allocated for retail use.

With 403,000 sqm of floorspace given over to offices, Preston was by far the largest centre of this bulk class in Lancashire accounting for 21.5% of the total Lancashire office floorspace, however Fylde District, with 25.8%, had a higher proportion of its total floorspace devoted to office use than Preston (20.8%). These proportions were in excess of the England and Wales average of 16.8%.

In comparison, the East Lancashire area only recorded a figure of 7.0% of total floorspace being allocated as office space. In Pendle District, the proportion was only 5.9%.

In 12 of the 14 authorities within the Lancashire NUTS-2 area, factory use was the dominant floorspace type. The two exceptions were the Blackpool with its high proportion of retail space and Preston, which as a result of its strategic location, has more warehousing than factory space.

Blackburn with Darwen had by far the largest amount of floorspace given over to factory use, 1,304,000 sqm or 53.2% of the total for the area. In percentage terms the proportion was higher in Pendle (57.7%); and both rates are significantly in excess of the England and Wales average of 35.6.

The central Lancashire has good road connections and therefore has a high overall percentage of warehouse floorspace (33.7%), a figure greater than the England and Wales average of 26.4%. As mentioned earlier, warehousing takes up a larger area than factory space in Preston, however in West Lancashire warehousing space constitutes 37.8% of the total, the highest rate amongst the four central Lancashire authorities.

Figure 1 Floorspace by Bulk Class, Lancashire and Districts, 2007

Source DCLG, Office for National Statistics

Coppull Enterprise Centre

Examples of the Reuse of Old Industrial Sites and Premises in Lancashire

NPL Estates is said to be one of the UK's leading privately-owned brownfield regeneration, remediation and land development companies. The company is actively involved at the former ICI site at Thornton Cleveleys, and their website mentions the 100-acre Burnhall Development and the Hillhouse Business park.

The former Royal Ordnance site just to the north of Chorley employed around 32,000 people at the peak of production during the second-world war. The area is now known as Buckshaw Village and has seen a mixture of developments over recent years including new housing. From the point of view of new business uses, 100-acres have been identified as a strategic regional site and the property development company Helioslough has been actively involved in the development of the area.

Examples of old industrial premises in Lancashire that have been transformed to suit modern business needs are the India Mill complex in Darwen, the Globe Centre in Accrington and the Coppull Enterprise Centre.

Rateable Values

Leyland Business Park

Table 2 details Information on rateable value, and rateable value per square metre, of non-domestic hereditaments down to the district level. The rateable value of property is based essentially on its rental value. This is driven by numerous factors including use, location, age, facilities and services, quality, etc, as well as the area of floorspace itself.

Table 2 clearly demonstrates the much higher rateable values that can be achieved for retail and office premises in comparison to factories and warehouses.

The total rateable value of commercial and industrial premises in Lancashire NUTS-2 was over £675 m or 1.8% of the England and Wales total. Of this sum, 39.9% was derived from retail premises in Lancashire, 15.4% from offices, 23.8% from factories and 19.0% from warehouses; the small remainder is allocated to the 'Other Bulk' category. Compared with the England and Wales percentage of 31.4%, a significantly smaller share of local rateable value is derived from offices. The average rateable value of all premises in the Lancashire NUTS-2 area in 2007, was estimated at £37 per sqm, a rate well below the England and Wales equivalent of £64 per sqm. For the Lancashire area as a whole, rateable values per sqm ranged from £21 for the average factory space to £87 for the average retail outlet. In comparison to the figures for England and Wales, office space in Lancashire (£55 per sqm) seems to be particularly inexpensive with average rateable values well under half those achieved countrywide.

At the district level, average rateable values for all bulk classes ranged from a high of £56 per sqm in Preston to just £24 per sqm in Pendle District. When split by the four major bulk classes, the range was from a high of £112 per sqm for retail space in Preston to only £16 per sqm for factory space in Pendle.

Table 2 reveals that factory space in South Ribble at £28 per sqm is on a par with the England and Wales average. There is no other average rateable value figure for any Lancashire authority in any bulk class that even matches let alone exceeds the England and Wales average.

The differential between results in Lancashire and the national figures is particularly large in the case of office accommodation, which in Chorley reaches a high for Lancashire NUTS-2 of £72 per sqm. Even this figure however, is 40% below the average for England and Wales. When viewed with the low levels of office space in the county, the results demonstrate the state of supply and demand for office accommodation in the broader Lancashire area.

The Lowest and Highest Average Rents in England and Wales

An analysis of 375 local authorities covering England and Wales (excludes one no result) reveals that Pendle District, with an average figure of £24 per sqm recorded the second lowest average figure for all bulk classes in the country, just in front of Teesdale in County Durham. Rossendale (£26 per sqm) was in eight lowest place, whilst the other East Lancashire authorities of Hyndburn, Ribble Valley, Burnley and Blackburn with Darwen were also in the bottom 45.

The highest placed Lancashire area was Preston in joint 216th position. City of London not surprisingly was the most expensive place with an average for all bulk classes of £288 per sqm.

Availability of Small Area Floorspace Figures

The Floorspace figures are available down to the Middle Layer Super Output Areas in England and Wales and the Lancashire statistics have been added to the data download centre of this website. The small area figures contain a number of missing data sets when they are split in to the various bulk classes, but the all bulk classes results are available for all 194 MSOAs in the Lancashire NUTS-2 area. Figure 2 therefore has been included to present the total floorspace area results in Lancashire at the medium super output area level.

The 'All Bulk' classes figures reveal high levels in town centres such as Preston, Blackburn and Burnley where not surprisingly there is a large amount of retail floorspace. The total figures do however also highlight other concentrations. The intersection of the M6, 61 and 65 motorways has seen new retail developments over recent years, and is also the site of the large Walton Summit industrial estate.

Figure 2 also highlights an area to the east of Sklemersdale at the junction of the M6 and M58 that is in the highest floorspace category. A large area that bisects the M65 and the two authorities of Hyndburn and Burnley is also in the category of containing over 300,000 sqm of floorspace. This area contains a number of recently developed sites that take advantage of close proximity to the motorway.

Figure 2 Total Floorspace Area by Middle-Layer Super Output Areas in Lancashire, 2007, All Bulk Classes