Sheffield City Region takes off

A test of the government’s new policies of promoting regional regeneration and economic growth could come in Yorkshire with Doncaster winning £18 million funding for its scheme. There was stiff competition for the government’s seed capital of £450 million and Doncaster got the cash for its Gateway to the
Sheffield City Region project. It fits with past success in pushing regeneration and continues the policy of boosting economic growth and becoming a catalyst
for attracting investment. Part of the project is the
construction of the Finningley and Rossington Regeneration Route Scheme (FARRRS) which is
the infrastructure needed to unlock the project.

Peter Dale of Doncaster Council commented: “This is tremendous news for Doncaster and the Gateway has the potential to deliver approaching 24,000 jobs in the area. The fact that we have received double the average successful bid of £9 million clearly demonstrates the confidence the Government has in Doncaster to deliver such an important scheme.”

One of the vital parts of the Gateway project is the expansion of Robin Hood Airport. Nigel Brewster, Doncaster Chamber President and Local Enterprise Partnership Board Member, said: “Improving access to the airport will have a transformational effect on the whole City Region. We must now capitalise on this
by encouraging local businesses to trade internationally and encourage new investors to locate on the airport business park and other key sites within the City Region.” Brewster said a particular objective of the chamber was to “create significant positive momentum for economic growth in the area.”

The airport, which is owned by Peel, is considered to have considerable potential for increasing freight traffic and as a location for business parks. Howard Gannaway, also of the Chamber, said: “The next
opportunity for the City Region will be around Enterprise Zones; we hope this announcement will
dovetail neatly with any proposals to create additional opportunities for the area.”

Static rents

Static headline office rents in Leeds could affect the timing of new development. At the moment they are set to stay at £258.24 a sq.metre (£24 a sq.ft.) for the rest of 2011, said Knight Frank. This is below the peak of 2009 because of a decline in demand illustrated by the 45% drop in take up last year, said KF’s Alex Munro. Even so, an interesting pointer to the future in Leeds will be when BAM decides to go ahead with its 10,684 sq.metres (115,000 sq.ft.) building adjacent to IVG’s No1 Leeds, which is slightly larger.

King Sturge has joined Knight Frank in letting this property. The firm’s Richard Thornton said: “The building offers large floor plates as well as part floors and is ideally placed to capitalise on various occupier break clauses and lease expiries we have identified this year.” Also being launched is the mixed use property, Indigo Blue, located at the junction of Crown Point Road and Hunslet Lane. It has residential units and 945 sq.metres (10,173 sq.ft.) of offices. It has been developed by Merlin Properties and is being marketed by WSB Property and Sanderson Weatherall.

Training companies set pace

In a slowly recovering market in Leeds, there is evidence of a shift in demand that has pushed training companies into seeking more space. That is good for the local economy and indicates a reaction to increased employment prospects but it also has a further significance, suggests Jeff Pearey of Jones Lang LaSalle. “It shows that what training companies provide is essential and that is recognised by the government who have, in effect, privatised part of the service to ensure that school leavers and older people are catered for.” He added that this is a good time for any occupier seeking space because there are “attractive deals available.”

Unlike some other parts of the UK, Leeds is not running out of prime office space. Figures from JLL show that take up in the first quarter was only 3,530 sq.metres (38,000 sq.ft.) with smaller sized deals continuing to dominate. “There will be an improvement in the second quarter,” said Pearey, ”because there are several significant deals coming through. The market feels better than a year ago and there has been an improvement in viewings.” The national picture has improved considerably with the second half of 2010 seeing a 36% rise in lettings in six top regional markets to a total of 510,950 sq.metres (5.5 million sq.ft.), reports JLL.

Training companies also featured nationally as seeking more space. Savills’ first quarter figures for development activity in the UK show that a large part of the country is considerably less active than London and the south east and that March saw a significant decline. The decline in development is mainly due to the public sector reducing its activity. According to Knight Frank in Leeds, prime rents will remain at £258.24 a sq.metre (£24 a sq.ft.), a decline of just over 10% since the peak of 2009. Alex Munro of Knight Frank commented: “Take up last year was 26,291 sq.metres (283,000 sq.ft.) or 45% below the ten year average.

New Grade A space available in the city centre was about 51,095 sq.metres (550,000 sq.ft.), which gives a vacancy rate of 11.6%, unchanged in the fourth quarter over June-September.” There is, however, a positive aspect to the figures because active demand is put at a healthy 39,018 sq.metres (420,000 sq.ft.).

Shortage looms

At the moment Leeds has a good supply of Grade A properties to let but this could change rapidly with an upswing in lettings. The reason for that is that there are only 4,273 sq.metres (46,000 sq.ft.) under construction, the lowest figure, reports Drivers Jonas Deloitte, since 1996.

The three largest properties available at the moment are Highcross’ 13,935 sq.metres (150,000 sq.ft.) Broad Gate, Headrow; Deltalord’s the Mint, which is 10,684 sq.metres (115,000 sq.ft.) on Sweet Road and IVG’s slightly larger No.1 Leeds, Whitehall Road. “There are still cracking deals to be done in the market,” said Richard Thornton of King Sturge, ”and this could drive the market rather than increases in rents. There is greater confidence with increased viewings and more money around.”

He notes the reasonable levels of demand, but also that it comes from smaller organisations. Like Pearey, he feels a major incentive will be pressure on companies to move to take advantage of favourable leases with rent free periods. Because the three large buildings available are considered to be outside the city core, David Powell of Drivers Jonas Deloitte said: “From a developer’s perspective, there may be money to be made doing a high quality or high end refurbishment aimed at smaller lettings, and in the middle of the city.”

Wilton on site

Formerly known as Midland House, 28 Bond Court was bought by Wilton Developments in September last year and will now undergo major refurbishment and modernisation. When complete in September 2011, it will deliver 15,250 sq.ft. of quality Grade A office and retail space to the Leeds market. Planning permission is expected soon on the ground floor retail elements of the scheme. Wilton Developments have seen a gap in supply for high quality accommodation in Leeds for small to medium sized firms and that is where 28 Bond Court will come into its own. Eamon Fox, associate director of DTZ’s Office Agency Team in Leeds, commented: “28 Bond Court will offer wonderful alternative, small suites of an exemplary standard in a prime location.”

The future of regeneration?

The question hanging over the commercial property industry in Yorkshire is, what effect will the ending of the Yorkshire Forward RDA have on regeneration? Clearly reductions in regeneration are inevitable to accord with the tougher economic climate. That is the case in Bradford where the ambitious redevelopment of the Odeon site has been scaled back, as have projects in Grimsby, Scarborough and Rotherham. In many cases the return on schemes by the RDAs has been very favourable and a study by PricewaterhouseCoopers estimated that for every £1 spent by an RDA, regional economies benefited by £4.50, a figure which is increased substantially.

Another problem intrudes on the debate in the changes to planning laws. According to John Howell, Private Secretary to the Minister of State for Decentralisation, the coalition’s presumption in favour of sustainable development would be a thread running through the new planning system. Howell said that councils that failed to plan for new developments would be, “assumed to have a completely permissive planning system.” A developer could then build “what they like, where they like and when they like” provided they met new national planning guidance being worked up in tandem with the localism bill.

Howell suggests that this would give incentives to councils and his views have been welcomed by the British Property Federation. Where the RDAs are concerned, assets will be transferred or sold to a variety of organisations such as local authorities, local enterprise partnerships or central government (or even the private sector). In the view of Martin Farrington of Leeds City Council that might not favour regeneration. “We need to have controls and guarantees in place so we don’t lose the original economic purpose for securing the sites. If they were controlled by a body that did not share that vision, then it would set Leeds back years.” Clearly that would apply throughout Yorkshire. This could mean a number of visionary plans would not go ahead.

Full steam ahead in Doncaster

While many cities and towns in Yorkshire cut back on regeneration, Doncaster appears determined to maintain its effort for improvement. It has started building the new civic and cultural centre with a ground breaking ceremony where the mayor, Peter Davies, said: “This has the potential to be a catalyst or stimulating growth in our economy. The intention is to create a destination that complements our quality shopping and market areas and encourages more visitors and businesses to Doncaster.” Michael Broadhead of Muse Developments, which is undertaking the scheme with the council, said: “The ivic Quarter will really set the standard for further new buildings in the town and region.”

The scheme is being partly financed by the European Union and later this year construction will commence on a performance centre, civic square and housing (bringing it back into the centre of Doncaster). In later hases there will be a library, swimming pool and leisure facility, further town centre housing, commercial offices and additional parking. Such is Doncaster’s confidence in the scheme that it has released a video to promote the town and its new facilities to a wide audience throughout the UK. Meanwhile, Doncaster will become part of the new local enterprise partnerships which replace the regional development authorities. In this case, in the Sheffield City Region which includes Sheffield, Rotherham, Barnsley, Bassetlaw, Bolsover, Chesterfield, Derbyshire Dales and North-East Derbyshire.

This region has witnessed a considerable amount of new development and regeneration and has done particularly well in terms of distribution and warehouse schemes. In turn this has attracted new investment, such as HSBC buying the final phase of Valad and Shepherd Developments’ West Moor Park scheme in Doncaster for a £9.1 million, a yield of 7.3%. The 14,864 sq.metres (160,000 sq.ft.) Quattro warehouse is let to Scotts Miracle-Gro.Richard Squire of Shepherd said: “West Moor Park is now well established and a prime location in the Doncaster area and, indeed, in the whole of Yorkshire and Humber region and epitomises the renaissance of South Yorkshire to the past decade.”

Hull gets major investment

For Hull the year has opened in splendid style with Colliers International doing a deal for Siemens for a site to manufacture wind turbines in Alexandra Docks. This is a highly prized inward investment that many parts of the UK were hoping for and is a large facility costing £80 million and, of huge local significance, it will create 10,000 jobs.

Past experience shows that such a new high technology manufacturing facility will act as a catalyst for other companies, notably equipment suppliers for the wind turbines, which will be for offshore and farm installations. Locating in Hull makes total sense because Siemens intends exporting the turbines to other countries in North West Europe.

Yorkshire scores in job creation

On the face of it Leeds and other towns and cities in Yorkshire have a problem in overcoming the effects of the recession. The effect can be most clearly seen in the case of Leeds where, said Jeff Pearey of Jones Lang LaSalle, take up was only 26,941 sq.metres (290,000 sq.ft.), below the ten year average. In other cities, notably Sheffield, the market difficulties have been increased by the government spending cuts.

Yet there is another side to the picture. A report from the Centre for Cities gives a glowing report on the prospects for growth in Leeds and also gives star status to Hull and Doncaster for being in the top spots (with Northampton) in reducing the claimant count in unemployment between March and November 2010. Alexandra Jones, Chief Executive of the centre, commented: “Buoyant cities like Leeds (and Bristol), which have been fast growing and have lots of private sector jobs are best placed to lead the UK’s recovery.” She suggests that these places should have new financial freedoms such as full control over the local business rate, and new powers to raise money as well as benefiting from London style mayors.

Pearey points to the healthy start up sector as well as the firmer start to the year after the tough 2010. We have had more viewings and there is a healthy level of enquiries for city centre and out of town offices.” The public sector accounts for only 10% of the Leeds office market, so the spending reductions will have less impact. “On the basis of recent evidence, we expect to have a better year in 2011, particularly as companies know this is a good opportunity for better deals,” said Pearey. A typical deal in Leeds last year was JLL letting 660 sq.metres (7,104 sq.ft.) In Evans Abstract Limited’s Capital House to Synapse Learning for its first office in Yorkshire and ninth in the UK. Evans’ Harlan Pollitt said, “I am confident this letting will kick start further activity both in this building and in our newly refurbished Minerva House (next door).”

The economy has continued to grow in Yorkshire, although it has slowed recently, but the office market in the main centres remains in the doldrums. On the other hand the outlook for the big shed market is favourable. At the moment the office market in Leeds appears to be the laggard among the big provincial cities with only 18,580 sq.metres (200,000 sq.ft.) let in the first nine months, many of the deals being small, said Richard Thornton of King Sturge. 12,600 sq.ft. of that total was let at 10 South Parade. Letting agents on the scheme are DTZ, Knight Frank and WSB. “It has been an odd year,” Thornton added, ”but should improve now the general election and the spending review are out of the way.

There are still a number of sizeable requirements in the market, such as for KPMG, and around 46,450 sq.metres (500,000 sq.ft.) of lease renewals between 2012 and 2016.” Leeds has a high dependence on the financial services industry as well as the public sector, where a decline in numbers must have an effect as it will in other Yorkshire cities such as Sheffield. Thornton said that the out of town business parks had seen a similar pattern to the Leeds city centre and had a comparable level of take up. As far as the economy is concerned, the latest report from the Yorkshire & Humberside PMI by Markit revealed continued growth which has now lasted 15 months in the private sector. The index declined from 57.1 in July to 54.9 in August with a central problem being the rise in output charges.

Patrick Bowes, Chief Economist of Yorkshire Forward, said: “While it is evident that demand has softened in August compared with July, the rate of new order growth remains robust and among the strongest in the UK.” A number of towns and cities remain, however, determined to continue with their programmes of refurbishment, notably Doncaster. Another positive factor is that the appetite for investments remains healthy with a number of sizeable deals this year.


The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Doncaster and Rotherham hold their nerve

It is encouraging that Doncaster and Rotherham are continuing with major development schemes that will bring widespread benefits locally. In Doncaster, the £300 million Civic and Cultural Centre has been given the planning green light and is the key to transforming the Waterdale area of the town. At the heart is a 14,585 sq.metres (157,000 sq.ft.) civic building to house the council’s 1,400 staff. This will overlook the first civic square in Doncaster and will bring the council’s staff in from several buildings.

Dan Needham of Muse Developments, who are developing the scheme, said: “When complete, it will act as a catalyst for the ongoing regeneration of the Waterdale area by allowing the redevelopment of the vacated office buildings in the future phases, which will further enhance Doncaster’s offer and help attract new investment and new occupiers to the town.” The long term plans for the area include a new hotel, performance venue, new library, swimming pool and leisure facility together with housing and offices.

One major Doncaster building in the pipeline for redevelopment is the 7,432 sq.metres (80,000 sq.ft.) Denison House, the GII listed building which housed Doncaster carriage works and is being sold by Sanderson Weatherall. Glenn Levison of Sanderson Weatherall said: “The development options are vast and having played such a historical part in the region’s railway industry, the potential is there to transform the premises into a museum or tourist attraction similar to the National Railway Museum in York. Other uses could include a hotel, gym or offices.” Colliers International has been appointed to study the leisure and retail requirements of Rotherham for its next Local Development Framework, examining the town’s future needs. Meanwhile, Oak Holdings has been given the go ahead by the government for the £350 million Yes! leisure scheme in Rotherham on a 327 acre site which will centre around a 14 storey building.


The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Preserving History

The property industry has been successful over the past few decades in converting some of Yorkshire’s historic industrial buildings, usually woollen mills, from modern use. The latest of these is Sunny Bank Mills in the centre of Farsley, a family owned mill which is being extensively renovated for small and medium sized businesses. In a short period it has four new tenants, Powerhouse Digital Photography; travel agents, Uncover the World; Yorkshire Physiotherapy Network and Richard Moran Photography who have taken 1,022 sq.metres (11,000 sq.ft.). John Gaunt of Edwin Woodhouse, the owners, said: “I think the pedigree of business reflects the quality of the refurbishment and even in the teeth of the recession, Sunny Bank Mills and Farsley can succeed in its mission of being a creative space for business.” The mill stopped textile production in 2008 having opened in 1912. In Halifax, St James is developing the historic Shaw Lodge into 10 small office suites. The company’s Oliver Quarmby commented: ”In the longer term we are looking to fulfil our dream of an urban village on this unique site, but we believe it is in everyone’s interest to proceed carefully as the property market begins to recover from the deep recession.” There are already 15 tenants on the 10 acre site, many of them in the creative industries and education. As with Sunny Bank mill, the last loom fell silent in 2008. Another historic building, the ARTTS International training centre, Bubwith, which has planning permission for conversion to residential and offices is on the market for £1 million.


The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Another Shed Goes

South Yorkshire continues to thrive as a locale for distribution and logistics with the latest major deal the letting of a 15,236 sq.metres (164,000 sq.ft.) warehouse at Quattro, the final phase of the West Moor Park scheme at Doncaster. The joint venture of Valad and Shepherd Developments has let the shed to Scotts Miracle Gro Company, the world’s largest marketer of branded consumer lawn and garden products. Shepherd’s Richard Squire commented: “West Moor Park is now well established as a prime location in the Doncaster area and epitomises the renaissance of south Yorkshire over the past decade.” At Century Park Networkentre, Rotherham there have been five recent lettings in the workspace and office scheme developed by Network Space, a joint venture of Langtree and the Homes and Communities Agency, totalling 1,580 sq.metres (17,000 sq.ft.). The 5,388 sq.metres (58,000 sq.ft.) scheme has 28 small office suites and workspace units. In Sheffield, Property Alliance has completed the first phase of the refurbishment of the Ecclesfield 35 Industrial Estate which it bought in 2009. The £1 million improvements include an enhanced power supply and café area. The industrial and warehouse units range up to 4,645 sq.metres (50,000 sq.ft.). Property Alliance’s Lee Charnley said: “We are delighted with the enquiry level since completing the first phase and look forward to adding to the quality tenant list.” Opus North is one of the most active developers in the region and has recently let 6,178 sq.metres (66,500 sq.ft.) at Opus 36 Business Park, Goole to HCK the catering equipment and supplies group. This is the largest property deal in Goole this year with HCK relocating from another site in the town. Andrew Duncan of Opus North said: “The two remaining refurbished units are attracting interest and there is certainly pent up demand in the region.” Another Opus North scheme is a supermarket and mixed use scheme with Lidl in Barnsley, close to the new Gateway Plaza development.


The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Investment Thrives

Cushman & Wakefield has joined Knight Frank in marketing the 11,473 sq.metres (123,500 sq.ft.) No1 Leeds which was developed by BAM Properties on behalf of the IVG Institution Fund. The development potential is considerable because it has planning permission for a total of 55,554 sq.metres (598,000 sq.ft.). At the moment the Leeds office market is typified by the Public and Commercial Services Union leasing 587 sq.metres (6,315 sq.ft.) in Town Centre House which has been refurbished by Town Centre Securities and is now 95% let. While it is clear that the current phase is for small deals, the investment market is thriving. Knight Frank Investors, for example, on behalf of Lancashire County Council has paid MEPC £20 million for the 6,689 sq.metres (72,000 sq.ft.) Benson House, which is let to PricewaterhouseCoopers. The yield is 7.33%. Matthew Atkinson of Jones Lang LaSalle, in reviewing the second survey of investor confidence, said: “Activity in the second quarter was relatively strong with £60.3 million deals transacted, a rise of 9% on the same period of 2009. With several assets brought to the market in the same period this suggests a strong out turn for the third quarter but we expect capital values to remain relatively stable.”


The Yorkshire Commercial Property Register
The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Another Bruntwood Refurbishment

The call for refurbishment will be magic to the ears of Bruntwood, who have built a substantial portfolio on the basis of improving tired office buildings. Its latest purchase in Leeds is the 12 storey 11,148 sq.metres (120,000 sq.ft.) City House, which is above Leeds central railway station and is now
in shell condition after being stripped out by the previous owners. In other words this is a classic Bruntwood situation which it will restore in consultation with Network Rail and Leeds City Council. It already owns over 20% of the office stock in Manchester city centre and now as 35,302 sq.metres (380,000 sq.ft.) in Leeds. Illustrating its skills, the portfolio is 95% let in Leeds. Bruntwood’s Chris Burrow commented: “With extensive experience in Manchester, Liverpool and Birmingham we’re confident that we can revitalise the building, enhancing the building’s infrastructure and, without doubt, a fantastic location in Leeds city centre.” He added that the company was still buying properties in Leeds and that it “believes in the fabric of the cities we operate in and wherever possible, we recycle
buildings instead of knocking them down and starting again. This is part of the company ethos to avoid waste and help create sustainable cities.”


The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.

Shortage Looms

Because of the slowing economy and the decline in speculative office development there is a potential shortage of quality office space in Leeds. Theanswer, suggests Jones Lang LaSalle in a research report, is for the gap to be met by refurbished and repositioned Grade B offices.

According to JLL, Leeds currently has 128,202 sq.metres (1.38 million sq.ft.) of offices available, or 11.1% of total stock. In this case the priority for landlords is
for income preservation rather than refurbishment. But with only a small amount of Grade A being built, the shortage will bite next year, said JLL. The firm’s Jeff Pearey commented: “There is a growing awareness from occupiers and developers about the potential shortage of Grade A space that we forecast will emerge in Leeds in 2012 although continued funding constraints means we do not anticipate any major construction starts in the next 12 months.” He
added that upgrading Grade B stock seems logical and a relatively low risk strategy to bridge any supply gap.

The Yorkshire Commercial Property Register

The Yorkshire Commercial Property Register is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Office Space in Yorkshire, Serviced Offices in Yorkshire and industrial commercial property in Yorkshire. You can also find the latest commercial property news for the Yorkshire region.