Source: Property Week 01/09/06
A former steelworks is still the hottest industrial site in South Yorkshire. Anna Goldie reports
Outokumpu is not a name that rolls easily off the tongue. But next year developers might have to get their mouths round it: the Finnish stainless steel and technology company, which operates in 30 countries, is putting one of the biggest sites in South Yorkshire on the market since printer Polestar's 48 acre (19.5 ha) site three years ago.
Next spring, Outokumpu will put up for sale its 50 acre (20.2 ha) site on Shepcote Lane next to junction 34 of the M1 in Sheffield, after deciding its coil rolling shop was no longer financially viable, despite campaigns by local MPs to save it.
The site will be marketed with the help of Sheffield First for Investment, the inward investment agency that also helps to faciltate development sites.
David Fletcher, director of investment and marketing at Sheffield First for Investment, says the site, which has been used by Outokumpu as a steel plant, is currently zoned for industrial use and the unitary development plan is keen to see it remain as an employment site. This means developers that want to build a distribution shed in the ever-popular South Yorkshire region could be disappointed.
'We would be happy to see a couple of smaller units on the site because it is the pattern of economy', says Fletcher. In fact, Fletcher adds, Sheffield First wants to attract more technology-based companies to the area - something that Scarborough Development Group and GMI Rovinian's £110m joint venture e-Campus scheme is trying to do. The 600,000 sq ft (55,741 sq m) office scheme in the Sheaf Valley is part of the economic masterplan of the city that aims to diversify and expand the local economy to include more digital, information and communication technology businesses.
'Anything that is related to the technology and media business we'd like to make sure there are sites available for,' says Fletcher.
Even Distribution
At its peak, the Outokumpu site employed 600 people and Sheffield City Council wants to see a similar number of people employed on the site. But Fletcher admits that, from a planning perspective the issue of traffic generated by the site's future use would have to be tackled.
'Our view is that a proportion of the site could be used for distribution but it wouldn't generate the level of employment we need on the site,' he says.
And Fletcher is adamant that the right developer will be chosen. 'For the city's image, we want to see development going on there. We certainly don't want anyone to buy the site to land bank it and it would be our preference to have one owner at the site because it could make it easier to work with all the relevant authorities.'
The site could be eligible for public sector funding because of the historic use of the site and the small amount of contamination on it.
Prime industrial land values around Sheffield city are between £250,000 and £300,000/acre (£617,283 - £740,740/ha), meaning the site could fetch as much as £15m. Gary Bostock, partner at Outokumpu's sole agent Fowler Sandford, has already shown 20 parties around the site, although he advises that it will not go on the market until next year.
'There have been other sites on the M1 corridor but there will be nothing like this to come to the market for a while,' he says. 'Most people in this line of business know about the site already because they keep their ears close to the ground even though we haven't started marketing it yet.'
Bostock anticipates a mixed-use scheme with office and light industrial units, but says everyone involved in the site wants to remain flexible. 'The site will not be sold with planning but with an indication as to what's acceptable,' he says.
Les Sturch, head of planning at Sheffield City Council, says the city hopes to retain its reputation as a centre for industry. 'Sheffield has a long track record of bioscience, metals and medicine, and we want to play on its strengths,' he says.
He adds that the site could be redeveloped into around 800,000 sq ft (74,321 sq m) and has the potential to accommodate 2,250 jobs, but stresses that junction 34 can be problematic in terms of traffic density.
Whatever the future of Outokumpu's site, Sheffield is determined that the city and technology are closely connected. Sheffield's steel manufacturing was mentioned by Chaucer, and the end of Outokumpu residence at the site will not be the last chapter in Sheffield's industrial history.