HS2: Regeneration at high speed

The vast High Speed 2 (HS2) railway project is set to spearhead a wave of vital new economy-driving development opportunities across the nation as the new high speed railway opens between 2026 and 2033. We spoke to HS2's Commercial Development Director Tom Venner (pictured below right), who is responsible for bringing these opportunities to life.

With the exception perhaps of the project name, everything about the High Speed 2 project is focussed on maximising the economic growth potential across the UK, from this unprecedented £56bn multi-decade public investment to transform the UK’s rail network. Headlines and debate continue to focus on the route, the design, and the engineering challenge of building a 555km high speed rail network – the first new main line north of London constructed in over a century – but the real prize for the nation is the local and regional transformation that this new infrastructure enables.

 A catalyst for growth across Britain.

“We have a very clear mandate, which is to make the most of the opportunities that HS2 presents,” explains Tom. He highlights the well-used project strap line which defines HS2 as a catalyst for growth across Britain; as such, he adds, every piece of land, regardless of size, has value. “The project from Birmingham to London is one of the biggest land acquisition programmes that has ever been undertaken in this country’s history. It is incumbent on us to use that land effectively for the public good,” he adds. “A large part of my job is to realise that potential and to make sure that the way we design our stations and use our assets maximises that potential.”

The mammoth HS2 project will link the UK’s major metropolitan areas together with a new high-speed track, carrying trains at up 360km/hr. Phase 1 will see a new line constructed from Euston to Birmingham, opened by 2026, Phase 2a will link up to Crewe by 2027, and the final phase, 2b, extends the network to Manchester and Leeds, with services starting in 2033. HS2 services will also continue to existing stations such as Liverpool and Newcastle, improving journeys to eight out of ten of the UK’s largest cities.

The project from Birmingham to London is one of the biggest land acquisition programmes that has ever been undertaken in this country’s history.

The result of this £56bn investment is that the government will become major land owners as it constructs new stations and depots; this presents massive development opportunities. Venner has been with the HS2 project for two years and, prior to that, spent his career in the private sector delivering projects across London and strategic developments in the South East. As such, he is first to point out that life as a major public sector client, defining projects rather than delivering them, brings a raft of new challenges, but they are challenges that Venner is absolutely up for. Not least as this project gives him the chance to set up and spearhead a unique property company with an unprecedented 20m sq. ft. pipeline of development opportunity across the UK. “I still believe that I’m a developer, and to be a developer you have to be doing not talking,” he says. The scale and diversity of the opportunities created by this huge public infrastructure investment, he says, makes it a very exciting place to be and, with strong cross-party political backing, there is a clear agenda to get things done.

“The government machine is phenomenal – what can be achieved with high level political support is huge,” he explains. “A learning curve for me has been that you have to unpack some of the language – explain things in a way that allows politicians to make the important big decisions.” The political decision to invest in better public transport, of course, adds commercial value to the land around the new infrastructure, as does the connectivity that HS2 provides between cities. However, the challenge for Venner’s team is to not only use that uplift in value to provide an economic return to the public purse, but also to maximise the development benefits of the arrival of the new railway for local communities. It is fair to say that, despite the overwhelming House of Commons support for the project when Phase 1 gained Royal Assent in 2017, not everyone in the UK was totally behind the scheme.

As with all public infrastructure projects, the pressure is on to deliver to budget and to programme, and to demonstrate progress. “Public scrutiny is right and welcome. We are doing this for public good but with public money,” he says. “While value generation is certainly now embedded in what we do, we are also focussed on working within a fixed budget – there is only a certain amount of money and we have to deliver a railway.” “We have to remain embedded in the end user – that is very much what we think about now,” he says. “You also have to put resources where we get the biggest return – the government is investing £55.74bn into this railway and it wants to gain an economic and commercial return.”

We have to remain embedded in the end user – that is very much what we think about now.

Although, so far, only Phase 1 of the project has planning permission, Venner’s work is project-wide, from Leeds to London and everything in between. That means ensuring that every planned station and depot has its development proposal in place – whether it is residential, industrial or office-led – and that this is designed to create the greatest development return possible for the public purse.

Although HS2 is only allowed to acquire land that is essential for the construction and operation of the railway, Venner’s team must have a development plan for the land purchased and for the land and opportunities around. However, in order to enable this, the project has to collaborate with partners to make best use of land and assets. Bringing these stakeholders together is a huge part of the role, not least because building a railway can be a hugely disruptive process. For Venner, that means first acknowledging this disruption, then listening intently to local views, before finally working hard to ensure that all HS2’s stations and assets give something back to the community.

“One thing that I have been impressed with is that every place we have landed has been massively optimistic about the opportunities HS2 brings,” he says. “Yes, it brings new rail infrastructure but more interestingly it provides an opportunity to link places, bring a large area of land into single government ownership, and in turn provide huge potential and flexibility about creating permeability.” By making London only a 42 minute journey from Birmingham, and just over an hour to Manchester, the project will, he adds, create a genuine step change in the way that people plan and live their lives. “The idea that a couple can live together with one working in Birmingham and the other in Manchester makes a fundamental difference to the way people think about where they live and work,” he says. “It massively affects how commercial real estate development works.”

Stations aren’t just about getting on a train – they are an experience.

Furthermore, “Stations aren’t just about getting on a train – they are an experience. I would be kidding myself if I thought I knew what the retail market would be like in seven years, when our first stations open, but I do know that it will be about quality of experience and environment so that people say ‘wow’! St Pancras did that and has created a destination, but it doesn’t really provide for the local community. So we want to add on another level – all our stations should be about the local community and be a destination.”

So with such a scale of ambition and investment, what could possibly go wrong!? Well, as a developer, the market conditions are never far from Venner’s mind – not least with Brexit and global trade wars impacting investor confidence. “If I have a concern, it is that we pick the right time to transact – I don’t want to look back and say we could have held assets for another year and made more money,” he says. “It’s always a question of when and how much to invest. It’s public money after all and if we are going to get this right, we have to have a cohesive plan."

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The government’s latest National Infrastructure and Construction pipeline shows over £600bn of investment over the next 10 years. Planned projects will enhance the nation’s transport, energy, water and communications networks, and help to solve the housing crisis.

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