Wellington Place, Leeds
Type of deal Joint venture funding agreement
Partners Hermes Real Estate & Canada Pension Plan Investment Board (CPPIB)
Developer MEPC
Size 460,000 sq ft
Development value £185m
Chosen by Richard Sunderland, managing director, CBRE (Leeds)
In terms of game-changing deals, it is hard to surpass Hermes and CPPIB’s 50:50 equity commitment to Wellington Place for a total gross development value in excess of £185m.
The new joint venture brings the ability to deliver a masterplanned scheme at a time when occupier confidence is returning but supply of quality product is at an all-time low. This speculative development, with 35,000 sq ft of offices completed and construction under way on 178,000 sq ft in two buildings, is already attracting strong interest from the Leeds occupational market.
Most significantly, this deal shows that overseas money is now looking at the regions, as opposed to just London and the South East. The Canadians simply wouldn’t have looked at a scheme of this magnitude several years ago, so this deal demonstrates that the regions are now back as an option and that Leeds can hold its own with other regional cities.
Milton House, Charter Row, Sheffield
Type of deal Freehold purchase
Vendor GE Real Estate
Purchaser Westfield Health
Size 80,000 sq ft
Price Undisclosed
Chosen by Peter Whiteley, Partner, Knight Frank (Sheffield)
Sheffield witnessed its largest office building sale over the past 12 months in a deal that saw health insurance provider Westfield Health purchase the 80,000 sq ft Milton House on Charter Row.
In a unique twist, Westfield Health will take up residence in the top four floors, complete with an innovative rooftop garden, for its headquarters but will redevelop the lower three floors for other occupiers. This will bring a further 30,000 sq ft of grade-A office space to market in a building that sits adjacent to the rapidly developing Moor retail complex.
I believe that particular aspect of the purchase of Milton House is what makes this deal so interesting. The purchaser operates in a very niche market yet saw the potential to purchase an excess of space beyond its own relocation requirements in order to invest in the burgeoning market for quality accommodation in Sheffield city centre.
City Reach, Leeds
Type of deal Land sale
Vendor Blenheim Engineering
Purchaser Mercer Real Estate Partners
Size Five acres (adjacent five-acre Otter Island site sold separately to Strata)
Price Quoting price circa £3m
Chosen by David Aspland, Partner, Carter Jonas (Leeds)
I’m highlighting the sale of the City Reach site to Mercer because there are two key angles to this deal. One is that the new owner intends to build PRS housing – a trend that will make a significant impact on Leeds and other regional cities. The other is that Mercer is a London-based property company, backed by foreign capital, and this is one of the first examples of a development deal focused on the perception of “real value” in the regions rather than the expensive and potentially overheated South East and London.
I think that makes this deal an excellent summation of where the development market is at the moment in Leeds.
The deal follows regional housebuilder Strata’s purchase of the adjacent Otter Island site for two- and three-bedroom townhouses – itself important as the first example of such development on an in-town site and a brave acquisition that provided the confidence for other things to happen in the area.
Planning: 12 months to end of December 2014
| Gross value added | |||
|---|---|---|---|
| GVA 2012 | GVA 2013 | % change | |
| Leeds | 19.6m | 20.3m | 4% |
| Manchester (competing city) | 53.8m | 56.2m | 5% |
| Yorkshire and The Humber | 99m | 102m | 3% |
| UK | £1.48m | £1.53m | 3% |
Google Debuts Digital Garage
The end of March saw the opening of Google’s debut Digital Garage – providing businesses with digital tune-ups and internet advice – at the Leeds Dock development in association with developer Allied London’s HelloWork initiative.
West Bar revival in Sheffield
Sheffield city council, Urbo Regeneration and Castlemore administrators at PwC are bringing forward a fresh masterplan for an office-led scheme at West Bar, while the council reviews plans for a city centre retail scheme.
31 East from HCA and St Paul’s
The HCA and St Paul’s Developments have concluded an agreement to build a new 750,000 sq ft logistics complex – 31 East – near junction 31 of the M1 in South Yorkshire.
OPUS North to Take on £80m site
Opus North is in advanced talks with McAleer & Rushe to take forward one of Leeds’s largest development sites, the £80m City Square House, which has been dormant for more than 10 years.
McLaren Property snapped up a site close to York’s two universities for £4m, where it plans a 326-bed student housing scheme.
LEEDS OFFICE TAKE-UP HALVES
Leeds Office Agents Forum reports the city’s take-up in 2014 fell to half that of 2013. Reaching just over 545,000 sq ft, it was 8% ahead of the 10-year average, but well down on a bumper previous year.
