Relocating a business to the Midlands – The advantages

The Midlands suffers from being considered the corridor between North and South, yet plenty of growing companies are relocating there and singing the praises of its central location, as Gareth Chadwick explains.

Unlike the North, with its dark, satanic mills, or Merseyside, with its bubble-permed scallies, or the sheep-tastic greyness of Wales, the Midlands has an image problem of an altogether different nature.

This problem is that it doesn’t really have an image at all. By definition, it’s the bit in the middle, sprawling amorphously between London and the North; a bit to drive through on your way to somewhere else. Even the one thing that Birmingham used to be best known for was a road, or rather lots of roads – Spaghetti Junction.

But the lack of a strong national or international ‘brand’ is also a positive in that there are fewer misconceptions about the region to be overcome and less distraction from its core strengths. Indeed, it is the very ‘middleness’ of the Midlands that makes it such an attractive location for business. Split between Shropshire, Staffordshire, Warwickshire, Herefordshire and Worcestershire in the West Midlands, and Derbyshire, Leicestershire, Lincolnshire, Northampton-shire, Nottinghamshire and Rutland in the East Midlands, the region is at the geographic heart of the UK.

‘The Midlands does exactly what it says on the tin,’ propounds Douglas Clark, a director at location consultancy Tenon Techlocate. ‘Being in the middle of the country offers excellent connections north, south, east and west; its location is definitely one of its major strengths.’

Transport and logistics businesses have long regarded the Midlands as an ideal base from which to reach customers all over the UK, as Frank McKay, chief executive of Travis Perkins, testifies: ‘Northamptonshire’s central location is ideal for the headquarters of a national distribution organisation, with easy access to major roadways, airports and the north-south rail link.’

And that’s not just true of Northampton; geographic good fortune means that with the possible exception of Lincolnshire, virtually every part of the Midlands can boast transport connections unmatched anywhere else in the UK. By road, for example, more than 75 per cent of the UK’s population is within a half-day truck drive of the West Midlands. It’s a strength that the regional authorities are accustomed to capitalising on. The map of the Midlands is speckled with first-rate distribution and business parks in close proximity to the grid of motorways that crisscross the landscape.

The heart of the matter

In 2004, parcel distributor TNT Express Services chose Network Park in Birmingham for the location of its new £8.2 million facility, the largest in the company’s 50-strong national network of depots. Employing 300 people, the depot represents the largest ever investment in a single site by the company. Depot general manager Grant Cochrane says, ‘We found the new site with the assistance of Locate in Birmingham and it is a fantastic facility, with much greater space and easier access to the road network.’

All across the region, schemes such as the 80-acre Hub site in Birmingham, between junctions six and seven of the M6, the 140-acre East Midlands Development Centre at Castle Donington, and the huge 500-acre Magna Park at Lutterworth make the Midlands an obvious choice for logistics businesses.

But the good connections come at a cost. According to a survey by property consultants King Sturge, rental levels for logistics properties in the West Midlands are the highest in the country outside the Southeast, at up to £5.75 per square foot. The East Midlands is not far behind at up to £5.25 per square foot. Both, however, are still some way short of the £6.50 to £8.50 you could expect to pay for similar sites in the Southeast, not including Heathrow, which is substantially more expensive again.

Saving grace

Office space, too, is not cheap, at least not in Birmingham, which suffers from a shortage of high quality new-build office space and as a result is one of the most expensive cities outside London. Elsewhere in the Midlands, though, rental levels are substantially cheaper than Birmingham.

Clark says that compared to the Southeast, companies will always make savings in the Midlands, in terms of recruitment as well as property. ‘You can probably save between five and ten per cent in the southern Midlands, increasing to between 15 and 30 per cent in the north of the region.’ Even Birmingham’s relatively high office costs were not an inhibitor for law firm Bevan Brittan. Already with offices in London and Bristol, it decided to open an office in Birmingham in 2001.

‘We already had a client up here and the more we looked into it we realised that there were plenty of other opportunities in the region, too,’ says Sara Woffenden, lead partner in Bevan Brittan’s Birmingham office. ‘There’s a strong core of quality law firms in the Midlands and Birmingham is at the centre of it. We can cover work right up to Cheshire and down as far as North London from here.’

The historically large manufacturing base of the Midlands, with consequent rich pickings for accountants and lawyers, means that professional services in general is a booming sector. Birmingham, in particular, has arguably the strongest professional services market outside London. Nottingham too has a dynamic professional services community. The Midlands is not just about the safety of established industries like transport and professional services, however. The East Midlands is ranked third in the UK in terms of investment in research and development and the Midlands as a whole has some surprising areas of niche expertise.

Race for space

Motorsport Valley is an area of motorsport and high-tech engineering excellence, centred on Silverstone racetrack in Northamptonshire. The majority of the UK’s specialist motorsport firms have their research, design and engineering facilities here, including most Formula 1 racing teams. The UK is a world leader in motorsport, with 80 per cent of the world market, involving some 4,000 companies, a considerable number of which have a presence in Motorsport Valley. And in addition to fast cars, Fairline Boats, a manufacturer of motor yachts, recently opened a new 10,000 sq ft project development centre in Oundle in Northamptonshire.

‘There are other companies in Northamptonshire in our supply chain,’ says Fairline chief executive Derek Carter. ‘We’ve doubled the company’s size in the past ten years, but not our facilities. Quite simply, we had run out of space and needed somewhere we could develop new products.’

According to Clark, Leicester is one of the new ‘boom towns’ of the Midlands, along with Nottingham, and is a national centre of excellence for space research. It’s developing a space science park, with the National Space Centre at the hub, while the Space Research Centre at Leicester University is at the forefront of the UK’s space research programme.

Nottingham, meanwhile, is one of six Government-designated ‘science cities’ and has one of the country’s fastest-growing bioscience clusters, centred around the BioCity development and the city’s two universities. BioCity, which opened in 2003, is the largest specifically biomedical science park and incubation centre in the UK, currently housing 37 companies.

More than money matters

If you do wish to relocate to the Midlands, don’t expect too much in the way of financial support. The region’s relative prosperity means that the major Objective One EU funding programme that has helped regenerate vast swathes of South Yorkshire and Merseyside is not available. Neither is the Selective Finance for Investment (SFI) which was discontinued. You might consider contacting local councils or chambers of commerce. If you are a member of the FSB, they provide a Cash Advance service which can be used for business expansion.

Of course, not every business location decision is dictated by financial or commercial considerations. For training company the Effective Performance Group, it was the lifestyle that tempted it to relocate from Manchester to Lincoln.

‘Most of our work is done online or via digital media, so we aren’t tied to being in a busy city centre environment. When I was thinking about relocating the business for personal reasons, it was the quality of life which led us to choose Lincoln over Manchester,’ says Phil Crowshaw, sales and marketing director of the Effective Performance Group.

And if even the tranquil pace of Lincoln gets too much, you haven’t got to travel too far to find respite: Lincolnshire supposedly had more lunatic asylums than any other English county. Most are now closed, but one or two have been turned into luxury hotels, so finding a bed shouldn’t be a problem.

See also: The logistics of office relocation

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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