Broxtowe Borough Council: Creating new commercial units to support SMEs

Broxtowe Borough Council are supporting small and medium sized enterprises (SMEs) in the borough by developing new commercial units to boost inward investment and create new jobs. The council was successful in bidding for funding from the D2N2 Local Enterprise Partnership (LEP) to develop these units in response to audits that were carried out by the council to understand the needs of SMEs in the borough. As part of this work, new commercial units were constructed on their Mushroom Farm Court site which immediately welcomed two new businesses to the region in September 2021.

The challenge

Following the impact of the COVID-19 pandemic, it was clear that supporting businesses and SMEs in the borough to recover and grow in the future would be key to facilitating local growth and recovery. However, prior to the pandemic, supply had been exceeding demand locally for smaller industrial and warehousing floor space. Addressing this gap was a key challenge for the council.

Regular audits were carried out in the main employment sites within the borough prior to the pandemic to understand the needs of businesses. These audits highlighted the need for smaller, affordable spaces within Broxtowe. Tenants from these sites were visited to see how well their existing properties and locations served their business needs and sites were appraised for opportunities for further development and to expand the availability of small-medium industrial space locally.

The council had carried out successful developments by Panattoni, an international real estate developer specializing in industrial real estate and warehouses. Some of the developments constructed by Panattoni in the borough had included 715,000 sqft of new warehouse and distribution space but these were inaccessible to smaller businesses and aimed at much larger companies as part of Panattoni’s letting strategy.

In addition, following the pandemic, customer facing retail, food and beverage outlets on the high street appeared to be negatively affected. However, despite this impact, the council found that these businesses particularly those in supply chains, as well as businesses that were able to continue operations during the pandemic still required commercial space, such as that found at Mushroom Farm Court, which was identified as having potential for further development in early 2019.

The solution and impact

Broxtowe Borough Council submitted a successful bid to the D2N2 LEP’s Local Growth Fund programme in 2021 which resulted in the council being awarded £115,000 towards the construction of new industrial units. Construction of these units was completed in July 2021 and are situated on the council’s Mushroom Farm Court site in Eastwood. The site was identified following consultations with tenants at the existing sites. From these conversations and in order to meet the funding call from the LEP, the Mushroom Farm Court site became the frontrunner. The site met planning needs and was already owned by the council which meant they were able to avoid timely and costly land assembly and crucially allow existing tenants to continue operating there whilst supporting smaller enterprises.

The new units were occupied soon after by East Midlands Vending Ltd and Towersey Festivals Ltd in September 2021. The council was able to use a place-based approach to attract these businesses to this site. Broxtowe’s location by the motorway and its links to the ring road to Nottingham and Derby makes it a suitable location for businesses. The Mushroom Farm Court site is in a strategic location, benefiting from close proximity to the M1 motorway through the A608 and A610 which provide access to the J26 and J27 junctions. It also provides a good customer base for these businesses to tap into to facilitate their growth.

Broxtowe is a well-known area to us, the location is perfect for access to the motorway and the ring road to Nottingham and Derby. Coming out of lockdown we are growing at a great pace and Mushroom Farm Court located next door to some of our established customers, gives us a great base to grow from. Our rapid growth in Vending and MicroMarket solutions is down to the demand in this area and as a local service provider, employing local people, our reputation is strong.

Nicola Hill, Managing Director of East Midlands Vending Ltd

Both businesses are committed to the local area and have plans to expand over the coming months and years. It is expected that six full time jobs will be supported through the delivery of the new space and will be worth over £1m to the local economy. The council also plans to continue to look for further opportunities to provide more sustainable commercial spaces to businesses as the borough looks to recover from the pandemic.

We have been keen to have a suitable premise within Broxtowe as having a location so close to home makes all the difference to a small business like ours, and Mushroom Farm is the perfect location for that.

Joe Heap, Director of Towersey Festival Ltd

Lessons learned

One of the key learnings was the importance of factoring in procurement times to project planning particularly as the council had to go out to procurement twice. The first attempted Invite to Tender exercise was conducted at the very beginning of the pandemic and was seeking a design and build contractor. Some of the challenges the council faced included the impact of the uncertainty from contractors as to how workplace restrictions may affect construction works and the supply chain – which resulted in each tender submission coming in over budget.

Through value engineering, the council was able to bring the project back within the funding envelope, but a lesson would be to plan programme procurement activity much earlier or even consider structuring a two-stage exercise where there may be significant costs to developing a project to the appropriate Royal Institute of British Architects (RIBA) gateway (preliminary design and survey work) for the chosen contract approach. This is because the supply chain is still incredibly volatile.

The second lesson learned is to engage with utilities companies as early as possible. This was the case with Mushroom Farm Court, with success – but some issues which could not be overcome economically with one provider led to the project having to be scaled from that in the initial Expression of Interest to the LEP which proposed three new units instead of the two that were delivered. Therefore, having these conversations and embedding these into the project plan early is advisable.