Property Investment in Preston: A Guide

In October 2022, Preston City Council approved a 15-year regeneration scheme that will encompass four contiguous districts of the city. Stoneygate is a 38-hectare site and the scheme constitutes one of the largest regeneration projects in the city centre. A mixed-use project, it will create an urban village, deliver improvements to the public realm and bring empty and derelict buildings back into productive use.

Already, the project has kickstarted local developments such as the restoration of Preston Livery and Carriage Works. In time, the scheme is expected to deliver improvements to public spaces, new shops and offices, and an attendant increase in local jobs.

Located in the heart of the city and home to numerous professional services businesses, Winckley Square is a Georgian-era city garden that was recently returned to its former glory. More than £1 million of improvements were undertaken in 2018/19, not only in the square itself but in neighbouring streets, which have seen major refurbishments and the creation of high-quality office spaces.

Preston’s old indoor market was recently demolished to make way for a new £50 million leisure and retail development that will feature its own car park and an 11-screen cinema complex. This follows a £3 million renovation of Preston’s Victorian-era Covered Market. Built in 1895 and comprising a large canopy supported by columns, it is now partially enclosed by glass, creating an indoor market hall that is home to numerous food and catering businesses. The markets are located very close to the former Guild Hall Theatre which, itself, is expected to benefit from £10 million of private investment.

Preston’s iconic bus station is a Grade II listed landmark that has seen an £11.4 million refurbishment in the last couple of years. Improvements to one apron have greatly enhanced public access, while interior remodelling has created new retail and catering facilities and a better overall visitor experience. The work has won numerous architectural awards and breathed new life into a building whose future once seemed uncertain. Associated with this has come a large public space outside the station – a public square with new paving, lighting and street furniture.

In March 2020, Lancashire County Council heard that its bid for improving transport via the Transforming Cities Fund had been successful. As a result, it has received a further £40 million to help improve facilities for bus, rail and sustainable forms of travel such as cycling. Some of the money will be used to build a new railway station in the northern district of Cottam. This award follows over £70 million of funds already ringfenced for highway improvements in and around the city.

In December 2019, planning consent was granted for the construction of a £20 million research facility in the Samlesbury Aerospace Enterprise Zone. Samlesbury is an outlying district of Preston where BAE Systems already has one of its principal sites and, as such, it is the focus of a massive UK supply chain as well as considerable investment. Collectively, BAE and its local suppliers employ over 13,000 workers.

In October 2021, the Zone also became home to the headquarters of the UK’s new National Cyber Force (NCF). The development of the new facility is being supported by £5 billion of new funding – the region’s largest influx of investment for 50 years.

Samlesbury is one of four areas of Lancashire recently given Enterprise Zone status, the largest number ever awarded to a single local economic partnership. Together, they comprise the Lancashire Advanced Manufacturing and Energy Cluster (LAMEC).

A second Enterprise Zone – at Warton – is located close to Preston, just a few miles along the river estuary, and is set adjacent to another BAE Systems facility. The Warton Aviation Enterprise Zone boasts UK’s only private fast-jet testing facility and a £2.3 million Training and Simulation Integration Facility (TSIF) which is part of a larger £10 million investment by BAE Systems.

These new Enterprise Zones are projected to create up to 6,000 skilled jobs, and up to 7,000 more in local supply chains specialising in aerospace and defence. This estimate excludes the 2,000 likely to result from the creation of the new NCF HQ.

In a period of just five years, UCLan expects to commit around £200 million of funding to new projects that will revitalise key parts of the city. Progress to date has been extremely rapid, with impressive new buildings going up in the Adelphi Quarter, where the old road layout and roundabouts have been transformed into a new public plaza. The area is dominated by a new Student Centre while the open space is now publicly accessible and will host the university’s annual Lancashire Science Festival. In all, the scheme is valued at £57 million.

Additionally, the masterplan has seen the creation of the £35 million Engineering Innovation Centre (EIC), which opened in October 2019. Described by UCLan as “the largest single investment in Lancashire’s educational infrastructure to date,” this state-of-the-art teaching and research facility will foster links between the university and local businesses to encourage better use of modern technologies.

Worth an estimated £185 million in GVA to Preston, UCLan is undoubtedly of great economic importance to the city, and its effects on Preston’s property market are appreciable. It attracts around 33,000 students plus a large body of teaching and support staff, so it’s responsible for sustaining significant rental demand.

Student spending on rentals and day to day expenses are estimated to be worth around £24 million per annum and a 2015 report found that over a third of all graduates go on to find jobs in Preston. In short, their value to landlords can extend well beyond the few years they study in the city. The same report suggested that graduates starting up new businesses helped to inject a further £15 million per annum into the economy.

Although some of Preston’s biggest employers are in the public sector – for example, Lancashire County Council, Preston City Council, UCLan and the NHS Royal Preston Hospital – the city has seen a pronounced surge in business growth. Some of this has been on the part of well-known organisations such as BAE Systems, Baxi, Booths and EDF, but much more has arisen from grass roots level.

This success is at least partly owing to the public sector’s policy of local procurement; even as central government was cutting funding for County and County Council services, they and local NHS Trusts were shifting their buying policies. By prioritising local suppliers, they moved hundreds of millions into the local economy, rather than seeing funds bleed out to national or international suppliers. The result has been steady growth in business numbers and employment, which is well ahead of the UK average and still climbing.

Unlike many cities, Preston is seeing growth across a broad spread of sectors rather than just a few key industries. The presence of BAE Systems is certainly supporting job growth in aerospace, defence and related areas, but other growth areas include health, technology and business services. The city also has a pedigree when it comes to nuclear energy; it is home to Westinghouse Electric’s Springfields nuclear fuel production installation in Salwick, which was established in the 1940s and was the first in the world to supply fuel for a commercial power station.

Preston is also the base for the food distributor James Hall & Co, which operates as the primary wholesaler to SPAR, and also for the food packaging business Huntapac. Another major employer with premises south of the River Ribble is Eric Wright Construction, which is part of a group with a £200 million turnover. Other important employers include the customer contact specialists HGS, and the insurance company Homeserve, which has its claims management centre in Preston.

More generally, Preston is witnessing strengthening performances at all levels in industries including:

• Construction

• Creative and Digital

• Cyber security

• Education

• Energy

• Food manufacture

• Healthcare

• Logistics

• Manufacturing

Tourism is an important element of Preston’s local economy, worth an estimated £330 million per annum. In 2018, it attracted approximately 7 million visitors but saw a downturn during the Covid pandemic in 2020 and 2021. Now, however, with restrictions having eased, and in the face of new improvements to transport infrastructure, retail facilities and attractions such as the Harris Art Gallery & Museum, numbers are expected to rise steadily.

Preston is a well-established stop on the West Coast mainline and is roughly equidistant from London and Glasgow. Consequently, it is well placed to benefit from any future improvements in rail connectivity, which should help to boost its economy, attract more short-stay visitors and generally make conditions even more attractive to property investors.

Preston’s railway station has benefited from a £1.5 million investment by Virgin Rail, and as a result of the electrification of the Preston-Manchester line, journey times have been greatly reduced.

However, it is HS2 that is likely to have the biggest long-term effects. By 2027, it is expected that journey times to London will be down to just 78 minutes from the current length of 2 hours 8 minutes. Similarly, HS2 indicates that journey times to Birmingham will be cut to 44 minutes. On its website, HS2 states: “HS2 trains will serve the current stations in Preston and Lancaster where passengers can access the high-speed network. There will be fast, frequent and reliable connections joining up the cities of the North and the Midlands.”

High Speed Two Ltd is confident that the new scheme will “create jobs and secure investment years before it arrives. The Lancashire Enterprise Partnership believes that productivity gains from the impact of HS2 services to the area could help provide an extra £600 million for the region.” It also cites confidence on the part of Lancashire’s LEP, suggesting that HS2 could improve “Lancashire’s aerospace, energy, tourism and higher education sectors… In Preston itself, HS2 could mean 75,000 extra visitors a year, adding £3.3 million to the city’s economy annually.”