Green light for sheffield scheme

Although Sheffield and other northern areas were expected to be hit by the government drastically reducing its property requirements, the Yorkshire city still has a number of key developments. One example is that Devonshire Green Holdings has received planning permission for a £3 million mixed use scheme designed by Cartwright Pickard at Arundel Street. The privately funded scheme involves listed buildings being converted into retailing on the ground floor with offices above and a new build of 72 bed student units. It will be built around a central courtyard and is aimed to enhance the Victorian architecture in the Cultural Industrial Quarter.

Morrisons lease office

Having a major company headquarters in an area helps the commercial property market. Morrisons, the supermarket group, provides a classic example of this for Yorkshire. In its latest transaction, through Edward Symmons and Savills, it has leased an 807 sq.metres office at Great Eastern House, Junction 7 Business Park, M62 Leeds. The office is for Morrison Facility Services and is on a 10 year lease. Richard Corby of Edward Symmons said: “This is a sizeable letting for the Leeds out of town market at present and, coupled with the recent lease renewal of another existing tenant, it is clear that this business park remains an attractive location for occupiers.” That is proven by the fact that there is only one small building still available at the business park.

Classic Bruntwood

With its long history of refurbishing large offices, Bruntwood now proposes to revitalise the 11,148 sq.metres City House, Leeds. The plan is for a substantial rebuilding of the 14 storey building to construct a new entrance foyer and mezzanine reception with concierge style service. Bruntwood’s Craig Burrow said: “We are currently finalising our designs and expect to submit a planning application very soon. The specification will be Grade A as we target BREEAM Excellent rating but it will be priced to appeal to a wide range of occupiers. He added that Bruntwood had a 96% occupancy rate on its Leeds properties. “We aim to spot the potential that exists in parts of the urban fabric that others may disregard.”

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 byPeel, 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.”

£600m Sheffield retail scheme

Another major scheme, a £600 million retail led development in Sheffield city centre by Hammerson, has moved forward with funding for compulsory purchase of the site. £10 million has been provided by Sheffield City Council towards the cost of buying the 20 acres while Hammerson will pay £15 million and the interest on the council loan.

Such is the enthusiasm for the project that the Home and Communities Agency has paid £30 million towards the enabling works and allowed Hammerson to defer paying that money until the shops are open. The original design for the Sevenstone development envisaged a 79,894 sq.metres (860,000 sq.ft.) scheme with more than 36% of the space devoted to a John Lewis department store. On top of this, Hammerson has submitted a planning application for the Eastgate Quarter’s retail scheme in Leeds. There are other major plans for developments in Sheffield with British Land and London & Stamford planning to extend the Meadowhall Shopping Centre.

Data centres funding

Encouragement for the government policy of creating new enterprise zones, which have been so successful in Yorkshire, has come from Highbridge raising £263 million to fund its Cobalt Data Centre Campus near Newcastle. Highbridge will use the money to build two data processing centres of 5,760 sq.metres (62,000 sq.ft.). The money has been raised by Taurus Asset Finance and Harcourt Capital through two Limited Liability Partnerships.

Guy Marsden of Highbridge commented: “We look forward to delivering two facilities as part of our long term strategy to develop quality and competitive data centres at Cobalt Park.” In the past, former coal mining areas, such as the Dearne Valley, have been given a new lease of life through becoming enterprise zones and they could be the model for the next tranche, bringing in new investment and creating employment. Marsden said finance is available for the right projects.

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.).