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.”

Holiday expansion

The steady expansion of the business has led Great Railway Journeys to lease additional space in Saviour House, York close to the world renowned Shambles. The company, which specialises in escorted group holidays by rail, has taken 1,189 sq.metres (12,800 sq.ft.) through Sanderson Weatherall. Great Railway Journeys’ Martin Johnson said: “We actively encourage our customers to visit our offices to discuss their rail journeys and the central location of Saviour House is ideal for customers and staff.”

Also in York, Instant Offices Managed LLP has leased 2,853 sq.metres (30,706 sq.ft.) through Jones Lang LaSalle in Quintain’s Hudson House, Toft Green. Instant Managed Space has taken a two year lease and following the refurbishment of the space, will sub lease it to Network Rail, which already occupies a big chunk of the buildings. This will allow Network Rail to relocate some of its work force while refurbishment of its existing George Stephenson House next door proceeds.

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.

Rewarding army town

Catterick is another town which is going ahead with regeneration in a deal between Lingfield Securities and Defence Estates. The £15 million project will create around 11,148 sq.metres (120,000 sq.ft.) of retailing and leisure as well as an 80 bedroom hotel and 285 car parking spaces. Advised by GVA, Defence Estates’ Geoff Dixon commented: “Our first priority is supporting our armed services and their families.

We look forward to working with Lingfield to ensure that a sustainable community for the soldiers, their families and the local population is delivered at no cost to the MOD budget.” Paul Brewer of GVA said: “We are already seeing major interest from large national retailers looking to gain representation within the scheme.” There has been a considerable amount of regeneration in Catterick, such as the leisure centre, and the plan is to link all the new sites.

Wakefield bucks trend

At least Wakefield is going ahead with further stages of its £140 million Merchant Gate scheme by English Cities Fund (ECf), a partnerships of Muse, Legal and General and Homes & Communities Agency (HCA). Jones Lang LaSalle and King Sturge have been appointed to market the 4,459 sq.metres (48,000 sq.ft.) of offices, which are close to Wakefield railway station giving rapid access to Leeds and London (2 hours). JLL’s Jeff Pearey said: “The three buildings of Merchant Gate make an impressive new business district and comprise some of the best offices available in Wakefield.” Emma Cordingley of ECf said: “Despite the economic climate, this landmark scheme, alongside those such as Trinity Walk and the new Hepworth Gallery, are spearheading Wakefield’s current major urban regeneration programme.”

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.”