Network Space

A Message from Lord Pickles and Lord Blunkett, followed by Network Space's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Network Space is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles

www.networkspace.co.uk

1NETWORK SPACE |
BEST PRACTICE REPRESENTATIVE
Tameside Wellness Centre,
Manchester
City Works, Manchester
Network Space is a commercial property development,
investment and management company based in the
North West. Focused on the industrial property sector,
its summarises itself as providing “better places for business”.
Founded by the father of current CEO Richard Ainscough
in 1982, it has since created or modernised over ten million
square feet of industrial and other employment space in over
150 locations. Richard tells
TheParliamentaryReview
more.
In over 35 years, we have evolved. In the early years the business focused mainly
on buying former factory sites and converting them into affordable multi-let
industrial estates, then we started to build new developments in the mid-1990s.
This continued until 2008 and the crash. I joined the accounts team in 2009 with a
mandate to shore up our cost base and by the time I took over the investment and
management operation in 2012, we were generating sufficient free cash to begin
investing in a recovering market.
Values driving growth
Aspiration, collaboration, proactivity, dedication, innovation, agility, integrity
and approachability are our values and we take them very seriously. They were
developed in consultation with the whole workforce and they are proudly displayed
on our office walls and elsewhere. They are the DNA of our business, which,
alongside our mission and vision, form the foundation for strategy.
Being so long- established it was inevitable that our interests would diversify into
other property sectors, although this was not necessarily a good thing. When the
FACTS ABOUT
NETWORK SPACE
»CEO: Richard Ainscough
»Founded in 1982
»Based in Merseyside
»Services: Commercial property
development, investment and
management
»No. of employees: 35
ȣ100 million development
pipeline
Network Space
THE PARLIAMENTARY REVIEW
Highlighting best practice
2| NETWORK SPACE
2008 crash struck, it was our non-
industrial property that did us the
most harm. This is not to say that
other sectors performed worse; it was
because we didn’t perform as well in
them.
Therefore, when I was appointed
group managing director in 2015,
I began a change programme to
refocus, restructure and rebrand the
business. The core of our investments
and new development would be
industrial property as this is what we
knew best. Our restructure formed
subsidiary companies that gave clarity
to our different operating functions,
which would in turn provide their
respective senior management
with greater responsibility and
accountability.
The rebrand was a difficult decision:
dropping a known name for a
relatively unknown one is always
questionable, but in hindsight we
have no regrets. Our programme of
change allowed us to reposition and
redefine the business, not just to the
outside world but also to ourselves.
It is appropriate to acknowledge that
our success in recent years has not just
been self-propelled, our chosen market
has boomed. We have certainly been
in the right place at the right time, but
I believe our revamped organisation
has allowed us to achieve more than
we would have otherwise.
Challenging subsector
Within the industrial property sector,
our capability and experience lie in
the provision of small to medium-size
units. In practice this means anything
from a 500-square foot workshop to
a 50,000-square foot warehouse. We
recognise that we aren’t equipped to
best serve the big box logistics sector,
where buildings can be upwards of
one million square feet, our speciality
is the small to medium buildings even
though this is the challenging end of
the value spectrum.
As an industrial building gets bigger,
the cost per square foot reduces
through economies of scale, while the
value per square foot increases due to
a stronger output yield by virtue of a
longer lease with a larger business. As
a building gets smaller, the opposite
is true – proportionate cost increases
and values reduce to the extent that
cost exceeds value, the consequence
being that we are seeing a growing
shortage of industrial space for small
businesses in the north of England.
This problem is exacerbated by the
competition for land in towns and
Alchemy Business Park,
Merseyside
I believe our
revamped
organisation
has allowed us
to achieve
more than we
would have
otherwise
3NETWORK SPACE |
BEST PRACTICE REPRESENTATIVE
cities with residential uses and new
urban logistics requirements.
This is not altogether a new
problem, in the 1970s and 1980s
central government funded direct
development of small-unit multi-let
through English Estates, a precursor
of what is now Homes England. In the
2000s English Partnerships distributed
grant funding via RDA’s. Public sector
support is still available today, albeit
some of EU origin, however the rules
mean it rarely enough to enable a
small-unit scheme. This problem is
becoming more acute as the factories
that we converted 30 years ago are
becoming obsolete through tightening
energy performance legislation and
the English Estates properties are
reaching the end of their useful
economic life. Rents have increased
sharply in response, albeit not by
enough to make new development
commercially viable, which in turn is
creating affordability pressures for
small businesses.
The majority of the 3.5 million-square
foot of employment space that we
have created has required some form
of public sector support, but we have
had to move up the size range in
recent years to maintain viability, the
units we can deliver are now typically
10,000 square feet and above. We
work closely with Homes England,
combined authorities and local
authorities to find the right solution,
we typically build speculatively and use
our own funds alongside support we
receive. In some schemes public sector
support may not be ultimately required
as they outperform expectations, but
without it being present at the outset
the projects may never have begun.
While we focus on the industrial
sector for the majority of our new
developments and investment activity,
we do have legacy land interests
that we are working through. They
are not always suitable for our core
purpose, but our team has the
imagination to identify uses for will
unlock the development. These can be
comparatively complicated projects,
but our historic diversity gives us
the experience required. In this vein
we have successfully delivered a
supermarket and a stadium, and we
are currently delivering a wellness
centre for Tameside Council. We do
like to stick to our knitting but like to
do some fancy needlework when the
need arises.
Looking ahead
The current climate is making it more
difficult than usual to predict what
the scale and type of occupier and
investor demand will be in 12 or 24
months’ time. We are going to see a
continued shortage of small business
space, particularly in urban areas, and
as developers we need to be creative
in resolving this. We believe in what
we do and we are prepared to risk our
own capital in speculative projects.
Our current development pipeline will
deliver over one million square foot
over the next five to six years and we
believe we have earned the confidence
of the relevant public sector funding
bodies so that they can continue to
be supportive when the need arises.
We will continue to work with them
to deliver the much-needed new
employment space and hopefully find
a solution that can satisfy demand
across the size range.
Our current
development
pipeline will
deliver over
one million
square foot
over the next
five to six
years
Tunstall Arrow, Stoke-
on-Trent

www.networkspace.co.uk

This article was sponsored by Network Space. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from Rt Hon Michael Gove.

Rt Hon Michael Gove's Foreword For The Parliamentary Review

By Rt Hon Michael Gove

This year's Parliamentary Review comes at a momentous time for parliament, as we collectively determine the destiny of the United Kingdom. 

On October 31, the UK will leave the European Union. The successful implementation of this process is this government's number-one priority.

Three years after a historic referendum vote, we will deliver on the decisive mandate from the British people. Trust in our democracy depends on it. Until that final hour, we will work determinedly and diligently to negotiate a deal, one that abolishes the backstop and upholds the warm and close relationship we share with our friends, allies and neighbours in the EU. But in the event that the EU refuses to meet us at the table, we must be prepared to leave without a deal.

As the Chancellor of the Duchy of Lancaster, it is my job to lead on this government's approach, should that scenario happen. Preparing for Brexit is my department's driving mission. But while I am leading this turbocharged effort, the whole of government is committed to this endeavour.

Ministers across Whitehall are working together to ensure that every possibility is considered, every plan is scrutinised and every provision is made. A daily drumbeat of meetings means that we are holding departments accountable, so that preparations are completed on time.

The chancellor has confirmed that all necessary funding will be made available. And we have mobilised thecivil service, assigning 15,000 of our most talented civil servants to manage our exit from the EU.

We will make sure that on November 1, there is as little disruption to national life as possible. Our trade relationships will continue to thrive, thanks to agreements with countries around the world worth £70 billion. Our country will remain secure, thanks to nearly 1,000 new officers posted at our borders. And the 3.2 million EU nationals now living and working among us can remain confident, with absolute certainty, of their right to remain in the UK.

Above all, our goal is to be transparent. Soon, we will launch a public information campaign so that citizens, communities and businesses are ready and reassured about what will happen in the event of “no deal”.

In my first few weeks in this role, I have travelled to ports and tarmacs, borders and bridges, all across the UK –from the seaside of Dover to the rolling green hills of County Armagh. I have heard from business owners and border officials, farmers and hauliers. They are ready to put an end to uncertainty. And they are ready to embrace the opportunities ahead.

Our departure from the EU will be a once in a lifetime chance to chart a new course for the United Kingdom. Preparing for that new course will be a herculean effort. But this country has made astounding efforts before. We can do it again.
Rt Hon Michael Gove
Chancellor of the Duchy of Lancaster