McAleer & Rushe has secured a joint venture partner to speculatively build out one of the largest development sites in Leeds.
Andrew Duncan’s Opus North, backed by Palmer Capital, is in advanced talks to take a 50% stake in the £80m City Square House project.
Work is expected to start on the 173,000 sq ft office building as soon as the joint venture deal is completed. The project has lain dormant for more than a decade.
It will be the second-largest speculative office scheme in the city, behind Roydhouse Properties’ 215,000 sq ft Central Square, which secured a 55,000 sq ft prelet to PwC shortly after starting construction.
According to CBRE, the city has just 274,000 sq ft of grade-A space available, with around 850,000 sq ft of named requirements.
McAleer & Rushe and Opus hope to achieve a headline rent of £28 per sq ft, which would set a new benchmark for the city.
A source said: “Hopefully this will mark a turning point where developers are starting to believe in the occupier story again.”
The 14-storey block, adjacent to Leeds’ main railway station, will sit on the corner of Wellington Street and Aire Street.
The original City Square House was demolished in 2004, with AWG Developments gaining its own consent for the site before selling it to McAleer & Rushe for £11m in 2005. Plans were submitted in 2007 but progress stalled when the market crashed.
Knight Frank was appointed in July last year to find speculative funding or a development partner for the project.
While terms have yet to be finalised, Opus is expected to pay around £8m for the 50% stake.
BNP Paribas Real Estate advised Opus.
