right place
right time?
Family brewer Young's has been operating out of its South London base for almost 175 years, but tradition may not stop it moving. Martyn Cornell reports
A 25 to 30-storey high skyscraper, surrounded by other tower blocks up to 10 storeys high, has been proposed for the Young's brewery site in Wandsworth, South London, as part of development plans that could see thefamily-owned company's shareholders pocket a windfall of up to £100m.
The proposal, which includes shops, offices, bars, restaurants and residential accommodation, currently exists only as an architect's model, drawn up to show one possible development for the five-acre town-centre Ram Brewery site and its environs.
But it has alarmed many to whom it has been shown for their comments, who are worried not only about the loss of a four-centuries-old brewing tradition in the town, but about the size of the potential development, which they say is out of scale with the rest of Wandsworth's skyline and a threat to the district's creaking transport infrastructure.
Meanwhile Young's tenants and workers are angry and depressed that they are allegedly being kept in the dark about boardroom discussions to develop the brewery site and move brewing elsewhere, possibly with a much smaller workforce.
Young's drinkers are worried
At the same time, Young's drinkers are worried that if the brewery moves then its widely-admired and award-winning beers, available in its own 200-plus tied estate as well as more than 500 free-trade accounts, will be irretrievably altered for the worse.
The suggestion that the brewery site could be redeveloped, first surfaced in November 2003, when the company's now 83-year-old chairman, John Young, announced that Young's board was entering into discussions with Wandsworth Borough Council "regarding a review of future development plans for Wandsworth Town Centre, including the Ram Brewery site".
The discussions included a two-year feasibility study on the development of a masterplan for the town centre, which would include examining "the relocation of the Ram Brewery to a new site within Wandsworth Borough".
Young stressed in his statement that "it is our intention that any relocation of the Ram Brewery should be within the borough of Wandsworth", and insisted that "we are not short-term property speculators we are looking to deliver value to our shareholders for years into the future."
The company was under pressure to do something about the brewery site: it was 20 years since the last major redevelopment there the building of a new brewhouse in 1984 and Young'sknew it had to face the idea of more modernisation of the brewery and its equipment in orderto help it compete against rivals such as Fuller, Smith & Turner further up the Thames in Chiswick.
But with the brewery effectively on a traffic island in the middle of the hugely busy Wandsworth gyratory system, hemmed in by roads on three sides and the Wandle river on the fourth, options for expansion were limited. It was also already suffering problems with getting delivery lorries on and off the site because of the constant traffic.
Unlocking the potential
Meanwhile Wandsworth Council was eyeing the brewery site as the key to unlocking the potential of the rest of Wandsworth town centre, opening up a link between the centre of the town and the development taking place around the "Wandle Delta" on the Thames riverfront, and possibly even easing the traffic pressure on the area.
Both its own Local Plan Review and the Mayor of London's Draft London Plan identified Wandsworth as a key area for regeneration, and the brewery was in the middle of the town centre. As far as planners were concerned, the brewery site was a bottleneck that could release a huge area of potential development land stretching north to the Thames.
However, observers immediately pointed to the enormous difficulty the company was likely to face finding a suitable new site in the boundaries of Wandsworth Borough, a largely residential area jealous of its remaining green spaces, for a new brewery, with all its associated smells, noise and traffic.
At the same time the pressures the company was likely to come under from investors to take the money available from redevelopment of the brewery site and run was shown by its share price, which immediately leapt to a record high when John Young made his announcement.
Since then the company's stock has risen even higher, with the "A" shares now worth 75% more at around £15.65 each than they were 16 months ago, just before Young revealed what was being proposed.
Even so, its market capitalisation, at around £110m, is still far short of the company's current net asset value of £207m, while analysts have said that even without a change of use for the brewery site, the current asset value should actually be closer to £250m.
It was this gap between asset value and share price that led to several years of often amusing annualgeneral meeting showdowns between John Young and one of the company's biggest non-family shareholders, the investment firm Guinness Peat.
Locked-in asset value
Every year Guinness Peat's Blake Nixon would try to pass a resolution urging Young's to do something about the discount between the share price and the asset value per share, preferably by breaking itself, privatising itself up or getting out of brewing, and every year John Young would use wilder and more bizarre props to emphasise the board's complete opposition to Guinness Peat's ideas.
Young's army of always-loyal shareholders, together with a share structure that ensures that the Young family has a minority of the shares but a majority of the votes, meant Guinness Peat constantly failed to get its resolutions passed.
Now, however, Nixon may get his way and see shareholders get some of that locked-in asset value.
A week ago, when stories began circulating that development of the site for offices, retail and housing could be worth £100m, a spokesman for Guinness Peat was quoted as saying: "We would be supportive of any move, such as a property deal, which would unlock value. We have always said that there is a fantastic amount of value in the business and have been putting pressure on the company to this end for ages."
Catalyst for regeneration
The review of the brewery site's future, commissioned by John Young back in November 2003, is still "months rather than weeks" from being finished, according to a source close to the company.
At the same time, the source suggested the likely sum Young's would receive for developing the site, where brewing has taken place since at least 1581, would be much less than the £100m figure quoted in the national press. Instead, as far as the company is concerned, it is expected to be somewhere in the region of £20m to £50m.
However, any plan to turn the site into something other than a brewery had its path forward smoothed considerably by a report commissioned by Wandsworth Council from the planning and development consultancy Roger Tym & Partners on the future of employment land in the borough. The report, considered by the council's planning committee late last month, said the potential relocation of Young's Brewery was "a major catalyst to regeneration" for Wandsworth town centre.
Young's masterplan
Changing work practices mean that Young's requires more space for brewing, bottling and storage, and so the company was looking for a larger site, the report said. The report reveals that Young's has a masterplan for the site, and the adjacent land occupied by Capital Studios, currently in preparation, which proposes a scheme consisting of retail, leisure (mostly bars and restaurants), residential and office space on the site.
Young's, not surprisingly, acknowledges that it is aware of what the Tym report says, but refuses to comment on the existence of a masterplan.
The proposals would generate many more jobs