Business Strategy Away Day

Board presentation

29th April 2016

Scrutiny Committee

Arch Annual Review 2015/16

2015-16

2015-18 Corporate Strategy framed around

six key programmes that support the delivery of the Northumberland

Economic Strategy

Place Business People

Investment

Arch

Commercial

Arch

Economic

Growth

Development

Estate

Management

Regen &

Infrastructure

Inward

investment

Growth &

enterprise

Northumberland Economic Strategy

Committed to Growth

“Arch will have a key role to play in delivering and managing

commercial and industrial property, providing targeted sector

and business support, completing the superfast broadband

programme, and leading the county’s inward investment effort.

Arch’s profit-for-purpose business model will generate

operating surpluses that will be used to fund our discretionary

support”.

Programme 1: Property Investment

www.archnorthumberland.co.uk

Our investment in commercial and residential

property and land has seen the asset value of the

Arch property portfolio increase to £138m*. Highlights

for 2015/16 include:

• Development of a scheme in conjunction with our

joint venture partner, Northumberland Estates to

improve the retail offer in Prudhoe.

*Includes WIP

Property Investment

www.archnorthumberland.co.uk

• The acquisition of the Tesco site, Bedlington.

• The acquisition and refurbishment of the former

North Eastern Co-op building, Blyth.

• The completion of 28 homes for private rent in

Seaton Delaval.

Property Investment

www.archnorthumberland.co.uk

• The acquisition of the freehold of Wansbeck

Business Park including 14 industrial units, 12

acres of vacant employment land and Esther

Court.

• The acquisition of 16 individually designed

units at Bebside Hall, Bedlington.

• The acquisition of the Arefco HQ on Jubilee

Industrial Estate, Ashington.

Developing Communities

“Northumberland’s urban centres are of primary importance to

the economy as service, cultural and commercial hubs.

The priority for Northumberland is to see place specific

investment in all of our key towns utilising the assets and

partnerships in place locally, this includes a basket of

measures appropriate to the locality including economic

development, strategic infrastructure, business facilities,

housing led renewal, public realm and transport related .”

Programme 2: Development

www.archnorthumberland.co.uk

Arch continues to make significant progress against our spatial

priorities of Ashington, Blyth and Berwick. Highlights for 2015/16

include:

• Portland Park, Ashington

• Commissioners Quay, Blyth

• Walkergate and Cowe Buildings, Berwick

www.archnorthumberland.co.uk

Development Arch continues to lead on the development of the £74m

Ashington Investment Plan

which includes a new leisure centre,

highway infrastructure, retail developments and the recently

approved plans for a new

headquarters for Northumberland County Council..

Development Arch has continued to progress the masterplan for Commissioners Quay in Blyth.

Focusing on delivering the residential and hotel elements on adjoining plots.

www.archnorthumberland.co.uk

Development Arch continues to lead on the development of the £74m

Ashington Investment Plan

which includes a new leisure centre,

highway infrastructure, retail developments and the recently

approved plans for a new

headquarters for Northumberland County Council..

Development Arch continues to lead on the development of the £74m Ashington Investment Plan

which includes the new leisure centre, highway infrastructure, retail developments

and the recently approved plans for a new headquarters for Northumberland County

Council.

www.archnorthumberland.co.uk

Development To the north of the county, Arch’s efforts in Berwick are focused on the creation of

a new commercial hub in Walkergate and the refurbishment of the Cowe Buildings

for mixed retail and residential use.

Development

www.archnorthumberland.co.uk

In addition to our spatial priorities we concluded a

number of developments on site and progressed

with a number of new ones. Highlights for 2015/16

include:

• Delaval Park, Seaton Delaval

• Dolphin Pub demolition, Newbiggin-by-the-sea

• Industrial space, Wansbeck Business Park,

Ashington and Cramlington

• Poundstretcher, Blyth

• Photovoltaic Panels, Ashington

• Ashington Football Club

Housing quality and choice

“Housing is therefore a key factor in the county’s economic

development particularly in terms of ensuring sustainability in

communities, providing for a growing labour force and the

wider economic impact of construction and enabling

infrastructure linked to development.”

Development

www.archnorthumberland.co.uk

One of our greatest achievements this year has been

the creation of a homes for sale division – Ascent

Homes with construction already underway on 100

new properties across Alnwick, Blyth and Newbiggin.

Through our investment in house building activities,

using our local subcontract supply network £3.6m

has been generated into the Northumberland

economy, provided work for 146 people and created

16 new jobs which includes three apprentices.

www.archnorthumberland.co.uk

Programme 3: Estate Management

www.archnorthumberland.co.uk

Having extended its estate portfolio to over 100,000m2 of

commercial and industrial floorspace and over 900

residential units, Arch’s focus is on managing its assets

more efficiently and improving the quality of service

provided to tenants.

The results of our efforts in managing the estate more

effectively can be seen in a number of ways.

• Increased occupancy rates

• Reduced tenant arrears

• Increased profits from the property portfolio

• Customer satisfaction scores

Business locations

“The dilemma is how to stimulate private sector investment,

modernise existing stock and create attractive, modern

business locations in a situation where demand remains

uncertain, the private sector is reluctant to act, and grant

funding is much reduced and access is fiercely competitive”

Investment in key business locations

• Current masterplanning will create an additional 17,450 sq m of

commercial floorspace. Potential to create 460 new jobs.

• Development of the eastern expansion land will provide a further

19,000 sq m of commercial floorspace where up to 501 additional

jobs could be accommodated.

New industrial units at Cramlington and Ashington

• 27 Northumberland based sub-contractors worked on-site. Total

expenditure on Northumberland sub-contractors was over £600k.

• Based on the floorspace created up to 29 jobs can be

accommodated in the units.

Programme 3: Estate Management

www.archnorthumberland.co.uk

Current occupancy rates:

• Homes 93%

• Commercial 96%

• Workspace 76%

Customer satisfaction rates:

74% good, very good or

excellent

71% good, very good or

excellent

93% good, very good or

excellent

We have reduced rent arrears (24%) and increased profits (34%) from

the property portfolio.

Estate Management

www.archnorthumberland.co.uk

On the commercial side of its business, Arch has

improved the quality and efficiency of the portfolio

through the completion of a capital works programme

and the installation of solar PVs.

• Arch invested £380,000 on the installation of solar

PVs on three of our commercial properties in

Ashington generating 59,000 kWhs in energy and

generating an estimated income of £8,000.

• Arch invested £147,000 on capital works across a

newly acquired commercial portfolio contributing to a

25% increase in occupancy levels since

acquisition.

Estate Management

www.archnorthumberland.co.uk

On the residential side of the estate, Arch has used its

Valleydale Mews development in Blyth to pilot an all-

inclusive rental scheme.

Four environmentally efficient homes built using

Trivselhus climate shield system and which come

complete with triple glazing and photovoltaic panels,

have been let on a 12 month pilot period where tenants

have saved around £580 over the course of the year

based on national average utility bills.

Programme 4: Project Management

www.archnorthumberland.co.uk

As well as being a developer and investor in its

own right, Arch has also delivered projects on

behalf of Northumberland County Council.

Highlights include:

• The construction of the £21m Ashington

Leisure Centre.

• Progression of the £74m Ashington

Investment Plan.

• The acquisition of the Tesco site, Bedlington

and launch of a design competition to secure a

lead architect to deliver a mixed use scheme.

• Development of a circa 1,500m2 office

building at Walkergate, Berwick.

Project Management

www.archnorthumberland.co.uk

Ashington Leisure Centre

• Arch Development Projects Ltd acted in the capacity of

development managers on behalf of Northumberland County

Council to deliver the project from inception to completion.

• The building includes a six-lane, 25 metre pool, and a six-

court sports hall with extensive floor space and equipment for

gymnastics and regional standard cricket.

• Other facilities include: fitness gym, luxury spa, library, sort

play area and café.

• Winner of the prestigious Royal Institute of British Architects

North East Award, the Leisure Centre is a community facility

that sets a high benchmark for design excellence and marks

the beginning of the regeneration of the town centre.

• An Economic Growth Team has been established.

• Developing Arch’s existing services to encourage and

attract investment and re-investment into Northumberland.

• A strategic account management programme underpins a

suite of business engagement activity to develop

relationships and understand growth opportunities and

barriers.

• Through our activities in 2015/16 the Economic Growth

Team have contributed to the following:

• £90m leverage of private sector investment into

Northumberland

• Creation of 200 new jobs in Northumberland

Programme 5: Inward Investment and

Account Managed Companies

www.archnorthumberland.co.uk

Programme 6: Business Growth and

Enterprise services

www.archnorthumberland.co.uk

The Economic Growth Team has been and will continue

to be responsible for managing and delivering a portfolio

of business growth and enterprise programmes across

Northumberland. Highlights for 2015/16 include:

• Closure of the following business growth and

enterprise programmes:

– Rural Growth Network (Pilot) Programme

– iNorthumberland Business Support

– The Regional Growth Funded Business

Growth Programme

– Business Northumberland Programme

• Delivery of the new Rural Growth Network

Programme.

• Application for European Funding to support the

delivery of the new Business Northumberland

programme.

Programme 6: Business Growth and

Enterprise services

www.archnorthumberland.co.uk

Private Sector Investment: £4.4m

Public Sector Investment: £3.49m

Jobs Created / Safeguarded: 262

Businesses accessing support: 597

RGN Current Programme • £6m Funding secured from North East LEP –

Growth Deal • Capital funding only • Delivered by Arch across rural

Northumberland, Durham and Gateshead

Rural Growth Network

RGN Grant Funds

Two funds available

Strategic Economic Infrastructure Fund

• Multiple units (industrial/managed workspace/office accommodation)

• Enterprise hubs – multiple business space and ‘smart working’

space

• Key strategic tourism assets

• Infrastructure works needed to unlock employment development

sites where an end user is in place

• 40% intervention rate. Private and/or public match accepted

Rural Business Growth Fund

• Costs to improve business premises to expand business or

purchase capital plant and equipment. Grant up to £60k.

• Sectors : Environmental products, food and drink production,

knowledge intensive business services, (scientific and technical services), manufacturing and niche tourism projects.

Questions?