Spotlight: The Value of Placemaking

The Value of Placemaking
 
When and how to spend it

13 October 2016, by Susan Emmett

Earlier investment brings greater benefits. Spending on schools, public realm and amenities sets the tone for a new neighbourhood

 

The attraction of a new development is not governed solely by the quality of the homes but by the quality of the place around it. Investing earlier in key features that give the development a sense of place and community, as seen in every desirable village and market town, pays off.

As we have explained on previous pages, our model shows that investing in placemaking delivers an uplift in sales values where conditions are right. Our calculations also show that the sooner the additional investment is made, the earlier the uplift in values can be achieved (see here).

This applies equally to investment in place as part of planning requirement, which may include a school, and additional investment. These are some of the key components in placemaking:

Community engagement

Developers building large urban extensions are not just selling houses, they are selling a vision of the future. Putting the site on the map as a destination with a character of its own is crucial to attract demand, particularly if the aim is to draw more affluent buyers from further afield.

Early marketing, PR, social media and community engagement all have a part to play in shaping that vision in the public’s imagination, gaining support for the development, easing the planning process and ultimately boosting values once homes go on sales.

Urban & Civic’s decision to invest in community engagement has played a large part in shaping perceptions of Alconbury Weald in Huntingdon, ultimately in supporting sales.

One of the earliest events was a ‘Family Discovery and Design Day’ to discuss ideas for the site in September 2011, two years ahead of submitting a planning application and almost five years before the first home went on sale.

The first homes, built by Hopkins, went on sale in April this year. Sales rates in the first two months were higher than anticipated – two per week compared to the average of one per week on an average outlet. Sales values on a per square foot level were 16% above that expected. Given that the scheme is still in it very early phases, we would anticipate further uplift.

Importance of schools

Investing in a school or schools, whether as a planning requirement or choice, has a significant impact on the success of a development, particularly if this is done early. Primary schools typically cost between £5 million and £10 million and a secondary school £20 million.

Developers might be required to provide two to three schools on a scheme of around 3,000 homes depending on the need from the local area.

There was a consensus among developers we interviewed that this was money well spent and should be prioritised over other non-residential uses. Schools provide an immediate draw to the development not only attracting potential buyers but also increasing footfall from non-residents.

It is therefore important to locate the school in a way that complements the neighbourhood centre and helps support early commercial outlets. Parents on the school run can provide custom for coffee shops and food stores, creating community feel.

 

 
Primary School at Alconbury Weald

▲ Primary School at Alconbury Weald

Effect of schools on sales

It can be hard to pick apart a single driver for increasing sales rates and values. We know from our earlier research of 2015/16 schools results and HM Land registry data that there is a 20% house price premium around the best performing state schools.

Whilst this analysis does not tell us whether the school is better because it is in a higher value area or if the house prices are higher because of the quality of the school, it does suggest a link between quality schools and demand for homes.

Heyford Park School

At Heyford Park, a development of over 700 homes on a former US air force base in Bicester, rental uptake increased significantly in the lead up to the opening of Heyford Park Free School in 2013 as parents sought to ensure that they were in the right catchment for the new state school.

The success of the school which is currently three times oversubscribed has driven new build sales rates with approximately a quarter of new buyers suggesting the school was the main reason they buy at the site.

Overall, Dorchester, the master developer behind Heyford Park, has experienced sales price growth from £250 per sq ft to £340 per sq ft in the two years since it started building with 150 homes already completed and sold by the housebuilder on site. It has experienced a sales rate of two a week, selling to one in four visitors.

 

 
Heyford Park School

▲ Heyford Park School

Public Realm

In any neighbourhood that works, the spaces between the buildings are as important as the buildings themselves. Investing in well-designed good quality public realm makes all the difference when it comes to creating a sense of place and using land effectively.

However, prescribing exactly how much ought to be spent on public realm is difficult.

For developers involved in longterm placemaking, establishing effective procurement routes and long-term relationships with suppliers can mitigate the costs of higher quality materials, such as natural stone. This is the case for the Duchy of Cornwall in Poundbury.

Poundbury

Whilst Poundbury’s traditional architecture, built according to principles advocated by the Prince of Wales, has drawn the most comment, we found that the way the development made best use of land provides the most important lessons for other development.

The master plan for the overall scheme delivers higher densities within a walkable neighbourhood, which promotes healthier lifestyles, helps support the local shops and increases land value.

In general, higher densities increase land values at appropriate building heights for the location. However, securing this premium requires that the public realm is well designed and of good quality.

At Poundbury people are prioritised over cars. Streets are an integral part of the public realm, designed to feel like a welcoming open space where neighbours can meet and children can play rather than solely a route for vehicles.

There is a wide variety of building types at Poundbury and a hierarchy of scale rising to a landmark tower, in Queen Mother Square, which will form the district centre of the neighbourhood.

Buildings around the square, rise between four and six storey and deliver a mix of residential and commercial property.

 

 
King's Point House at Poundbury

▲ King's Point House at Poundbury | © Duchy of Cornwall

Alconbury Weald

Urban & Civic have also prioritised investing in the public realm to set the tone for a new neighbourhood at Alconbury Weald from the outset. The entrance to the development is framed by good quality landscaping. The first thing a visitor sees is a pond with seating areas, leading onto an attractive open square and a new primary school which opened in September 2016 even before the show home was opened.

New entrances to the site have been put in to separate construction traffic and a significant amount has been spent on moving existing and putting in mature trees. Around £10million was spent in advance of any housebuilding on these features to ensure that the experience those looking for a home get when they come to the site is one of an established quiet, rural village.

Retail and amenities

Where a new place is being created from scratch, shops, services and community facilities should be integrated within the design coherently.

There is a symbiotic relationship between residential and commercial development if both are considered together rather than treated as separate entities. Residents value local shops, cafes, restaurants, community facilities and leisure amenities. Shops and leisure facilities need day time trade to thrive. Local schools and commercial workplaces can help provide vital footfall.

The retail does not need to start big. Smaller units run by local entrepreneurs, rather than a national chain, as seen in the Poundbury approach, may prove more viable in themselves and support a greater sense of community and quality of place.

At Poundbury, residential, shops and employment space are fully integrated. The scheme also features mixed use buildings such as Kings Point House which was built for £6.5million in 2011 and includes retail, office and residential uses.

So far at Poundbury, there are approximately 3,000 people living in different types of housing, including Affordable housing.

It also provides employment for some 2,100 people working in 185 businesses. The scheme is over half built and is expected to grow to 2,200 homes by completion in 2025.

 

 
Alconbury Enterprise Campus

▲ Alconbury Enterprise Campus

Heyford Park Centre

The next step for Heyford Park involves a £15 million village centre at the heart of the scheme. It is designed to feel like an Oxfordshire village and includes plans for community space, a village square, a restaurant, a hotel, a bar, a cafe, shops and 40 homes. However, with over 1.3 million sq ft of commercial space ranging from warehouses to lab space and offices, the site is already home to 200 established businesses.

 

 
£15m Heyford Park village centre

▲ £15 million Heyford Park village centre

Employment

Ultimately, the decision on whether to include significant employment space really depends on the strength of the local economy, the location of the scheme, its connectivity and what is already available in the areas surrounding the development.

Urban & Civic have taken a different approach to Poundbury at Alconbury with the Enterprise Campus which has a separate entrance to the residential element. It currently has a workforce of 600 which is set to increase with the build out of 1 million sq ft of commercial space over the next two years.

Given its location in Cambridgeshire, the Campus can draw on Cambridge’s reputation as a global centre for technology and proximity to other business and technology hubs.

The Campus received Government Enterprise Zone status in 2012 which means businesses will enjoy a range of benefits including 100% business rates discount and superfast broadband.

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Key Contacts

Susan Emmett

Susan Emmett

Director
Residential Research

Savills Margaret Street

+44 (0) 203 107 5460

 

Lucy Greenwood

Lucy Greenwood

Associate
Residential Research and Consultancy

Savills Margaret Street

+44 (0) 20 7016 3882