MAGAZINE: Giant ‘smart’ town project launches in first UK freeport

A massive £2.3 bn (€2.6 bn) ‘smart’ town project has launched near Southampton in the UK, hot on the heels of the government’s final approval in December of tax-friendly business zones known as freeports.

The commercial element of the development – a 1.5 million ft² (140,000 m²) science and technology-focused campus – embodies the regeneration opportunities arising from the recently launched freeport model in the UK.

Essentially, freeports are business clusters benefiting from government funding, fiscal incentives and tax relief as a way to attract global businesses and stimulate regeneration.

‘Fawley Waterside is proud to be a key part of the business case for the Solent freeport which has succeeded in being selected as the UK’s first new freeport,’ says Aldred Drummond, who co-owns and manages the project. Drummond is a strong proponent of these tax-advantageous areas which he sees as a catalyst for growth that can boost the UK’s competitiveness against other global hubs. ‘Freeports enable developers to be ambitious, knowing that they will attract world-class businesses, keen to capitalise on a fantastic package of measures,’ he notes.

Business incentives
Benefits for corporates relocating to freeports include tax breaks, customs advantages, business rates retention, planning support, as well as trade and investment support. Drummond believes freeports will bring in millions of pounds in investment and thousands of highly skilled jobs, turbo-charging local economies and the whole of the UK. ‘They make an ideal location for reshoring high value manufacturing back to the UK,’ he says.

For geopolitical reasons such as the war in Ukraine and major disruption to global supply chains, this is more important than ever, Drummond adds. ‘We want global companies to choose the UK as their European headquarters and freeports’ package of measures offers a huge incentive. These generous tax advantages, including no business rates to pay for the first five years of tenancy, will enable companies to invest more upfront into their real estate and manufacturing capability, such as high-quality 3D printers or specialist life sciences laboratories.’

Fawley Waterside is being marketed to potential occupiers by advisors Savills and Colliers and is expected to attract strong interest from maritime as well as tech and life sciences companies. The development, which is sponsored by real estate investment manager and developer Long Harbour, is part of the Solent freeport zone, one of four freeports which were granted final approval by the government last December, thus receiving up to £25 mln of government funding to kick off construction works.

Says Drummond: ‘The Solent is ranked as one of the UK’s leading maritime clusters and Fawley Waterside will naturally attract companies in this space, as well as technology and life sciences sectors. Nearby Southampton is an internationally important technology hub with the fourth highest tech firm concentration in the UK.’ Future occupiers will be able to take advantage of the design-and-build opportunities that are available in the first stages of the project, thus helping to create something that meets their needs and ESG goals. The location could also assist occupiers’ digital transformation by providing access to the smart town’s exceptionally rich data stream.

Live-work location
The site is to be built ‘from the internet up’, with 5G connectivity and a city-wide IoT system. Drummond remarks: ‘I want Fawley Waterside to be a vibrant coastal town, the ultimate live-work location. It will be a blend of the ultra-modern and traditional, with the very best integrated digital connectivity and “smart” functionality, but with the architecture of the New Forest’s towns and villages. This will be a really beautiful place to live.’

With works well underway on site, demolition activity is expected to be rounded off by the end of the second quarter of 2023, while eight new road junctions are set to be completed by year-end. ‘These upgrades will significantly enhance road capacity and shorten journey times between Fawley and Southampton,’ says Drummond.

In line with its forward-thinking approach, Fawley Waterside has recently become a partner in The Solent Cluster, a cross-sector collaboration of international organisations, including manufacturers and engineering companies, regional businesses and industries, logistics and infrastructure operators and academic institutions, to advance carbon capture and storage as well as hydrogen technology.

Founded by ExxonMobil, the University of Southampton and the Solent Local Enterprise Partnership and counting some 40 partners from a range of sectors, the programme envisages the creation of a new carbon capture and storage (CCS) and hydrogen production facility around the Solent, which could capture approximately three million metric tons of CO2 every year. ‘The hope is to provide low carbon fuel for the region’s maritime and aviation industries,’ Drummond explains. ‘This effort could position the Solent at the centre of low-carbon fuel production in the UK and make a major contribution to the country’s net zero ambitions by 2050.’

What are freeports?
Freeports are business clusters benefiting from government funding, fiscal incentives and tax relief as a way to attract global businesses and stimulate regeneration. In particular, these areas benefit from a range of measures, including customs advantages, business rates retention, planning, regeneration, innovation and trade and investment support. First announced in August 2019, freeports were officially approved in December 2022, when the UK government signed off on the first four such zones: Teesside, Plymouth, South Devon and Solent, each receiving up to £25 mln in seed funding.

This follows an open competitive process for the locations which ran from November 2020 to February 2021.At its core, the freeport model has three objectives, according to the UK government’s website: establish national hubs for global trade and investment; create hotbeds for innovation; and promote regeneration through the creation of high-skilled jobs in communities that need it most.

Personal profile
Aldred Drummond is the managing trustee and owner of The Cadland Estate, comprising 2,500 acres (1,010 ha) of land in the New Forest National Park, Hampshire, England. He also co-owns and is the chief executive of Fawley Waterside, Europe’s first purpose-built net zero smart town.

Drummond started his career in Northamptonshire during the late 1990s, playing a major role in the regeneration of the town of Corby. After 10 years in Corby, he became involved in further town extension projects for Kettering and Wellingborough, gaining permission across the three towns for 14,000 homes, workspace, schools and parks. He has also worked as real estate director at Long Harbour, overseeing investment into 23 UK towns and cities with a focus on building homes for the rental sector. ‘Fawley Waterside is personal for me,’ he told PropertyEU.

The land was previously part of Cadland, Drummond’s family estate before it was purchased by the government in the 1960s to become the site of Fawley Power Station. ‘When this was decommissioned and put up for sale, I felt compelled to take on the task of replacing it with something of real value that would benefit Fawley and surrounding communities,’ he said.