Too much growth?
News
by
Noella Pio Kivlehan
Boom town Agents are worried that the city’s huge growth in leisure could end up in a glut. Noella Pio Kivlehan reports
Leeds has suffered from being in the shadow of other northern cities. Birmingham had the population, and now the magnificent Bullring; Liverpool had the music scene; and Manchester had, seemingly, everything. But for the past decade, Leeds has made great strides forward. It has secured its position as a financial powerhouse, the office sector has taken off, its residential market has grown significantly, and now its leisure scene is about to triple in size.
Nick Ferris of King Sturge says the reason for the growth is simple. “The leisure market is growing because the boundary lines of the city are being expanded.” James Bielby of Christie & Co says the expanding leisure market is pushing Leeds forward in the same direction as Manchester or London.
There are now roughly nine leisure pitches in the city, ranging from established ones such as Greek Street, to new ones such as Brewery Wharf. But has the growth fragmented the market? And will the increasing number of operators find enough customers to survive?
A lot of the growth is on the back of extensive residential and office development. Mixed-use schemes, such as Criterion Place, West Point and Clarence Dock will provide around 2m sq ft of offices and residential, including around 700,000 sq ft of A3 space.
Agents point to the captive audience within these projects as the reason why so many different pitches will work. “Where there’s going to be a large concentration of city dwellers and occupiers, you are going to need A3 going in,” states Ferris.
However, the increased dependency of leisure operators on specific catchments raises the question of what would happen if there was a market downturn. Would theircustomer base be lost? Admittedly thesituation is hypothetical, and one that does not worry agents. “Companies are tied to 15 and 20-year leases. This means they are not just about to close up shop,” says Bielby.
But faced with a growing market, established publicans and restaurateurs are getting nervous. Jon Patrick of Christies & Co has little sympathy. “You talk to leisure operators in Leeds and they say the market is overcrowded. But those complaints are coming from operators who have been in the city for a while, and their stock isn’t as fresh as the new boys.”
The figures show, however, that operators’ nerves could be justified. Richard Shuttleworth of Pudney Shuttleworth estimates that 15% of the city’s A3 stock is on the market at any one time. DTZ’s David Thompson backs up Shuttleworth’s figures. While looking for a site for London-based sushi restaurant, Yo! Sushi, Thompson says other agents in the city were offering him existing businesses. “I was surprised how many agents put forward current operations and told me that I could have those units if I wanted them.”
Despite the number of premises up for grabs, it has not stopped operators vying to get into developments. Both independents and national chains, such as Loch Fyne, Wagamama, and Yo! Sushi are said to be interested in the city.
King Sturge’s Ferris firmly believes there will be enough customers to make the new bars and restaurants work as long as they are of a good standard and well managed. Just as The Calls set an example when it became the first area to be developed off the main city-centre retail pitch, Ferris says operators are not afraid of new areas.
He says: “Given the right site and terms, service retailers and leisure operators are willing to go into uncharted parts of the city, as long as there’s sufficient office workers and residential occupiers to sustain a profitable business.”
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Will new hotels kill off the older stock?
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With Leeds’ restaurant and bar market growing at a rapid pace, the city’s hotel market is playing catch-up. There are around 18 hotels in the city, and the city’s total bed stock will be around 3,170 by the end of the year, spread between three and four-star hotels and budget operators.
There are three hotels coming on stream during this year. One is the 248-bed Jury’s Inn, which opened in February. Towards the end of the year, Ibis is opening a 128-bed hotel on the Kirkstall Road, and 280 beds will be coming from Bewley’s new unit on Sweet Street. There are also three 4-star hotels planned for the Quarry Hill, Clarence Dock and Sovereign Street schemes.
Christie & Co’s Jon Patrick welcomes the growth in hotels. He believes that, for the city to continue developing and achieving a greater status, the bed stock has to grow as well. But there will be casualties.
Patrick believes new entrants could spell closure for older hotels. “Potentially there are others that will find the going difficult when the new hotels open,” he says. The Wellesley Hotel, next to West Central, closed in 2002, and has now been converted into housing. Patrick predicts other hotels, such as Queens, the Golden Lion, and the Hilton – which he describes as an unattractive building in a great location – will find “the going difficult”.
Simon Hawkins of Gerald Eve believes the older hotels have to make a choice about their future. “These hotels are aware they are slowly being eroded. But they have one of two choices: either reinvent themselves or close and be converted into something else.”
But the older establishments are determined not to go without a fight. Refurbishment work was carried out last summer on the Golden Lion, where more bedrooms were added, and there are plans afoot to start work on the Queens. A Queens Hotel spokeswoman says it will not be struggling in the face of competition from new hotels, and that the hotel is embarking on a multimillion-pound refurbishment.
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Major leisure pitches
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The Light the 450,000 sq ft, £100m leisure development by HBOS and Clerical & Medical Investment Group opened two years ago. Including a Tiger Tiger, it has fast become one of the city’s main leisure destinations.
Greek Street home to 10 A3 units, Greek Street saw the city achieve its highest leisure rent when Tin Tin Chinese restaurant earlier this year took a 2,250 sq ft unit at £25 per sq ft.
Headrow between Park Row and East Parade, it is an area of the city known as a doomed leisure pitch after several high-profile operations failed. These included Fish! Bar 38, and Slug & Lettuce. Despite this, several operators are planning to open in the area.
The Calls previously a rundown area just off the city centre, it became the first pitch to break away from the traditional leisure pitches when boutique hotel, 42 The Calls opened in the mid-1990s. It is now characterised by independents.
Boar Lane drinkers’ circuit with high street operators such as Yates’s.
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Future leisure scene
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Ongoing and proposed leisure developments
Clarence Dock Crosby Homes mixed-use waterfront scheme is underpinned by residential, but more than 500,000 sq ft has been designated for leisure usage, plus 200,000 sq ft for offices.
Portland Gate next to Leeds University, when the Taylor Woodrow project completes in 2007, it will have 30,000 sq ft of leisure, 120 apartments, and more than 120,000 sq ft of offices.
West Point a development by KW Linfoot is providing 17,500 sq ft of retail and leisure, with 353 apartments. It is due to complete in February 2005.
Millennium Square St James Securities and Asda Property Holdings are progressing with their £15m entertainment, leisure and office scheme, Electric Press. It should be open later this year.
Brewery Wharf Rushbond’s 500,000 sq ft scheme has 150,000 sq ft of offices, a 248-bed Jury’s Inn, 35,000 sq ft of leisure and 400 apartments.
Criterion Place last month, Simons Estates got approval for its 800,000 sq ft mixed-use scheme on Sovereign Street. It has two towers, 47 storeys and 29 storeys and a 186-bed hotel.
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Boom town Agents are worried that the city’s huge growth in leisure could end up in a glut. Noella Pio Kivlehan reports
Leeds has suffered from being in the shadow of other northern cities. Birmingham had the population, and now the magnificent Bullring; Liverpool had the music scene; and Manchester had, seemingly, everything. But for the past decade, Leeds has made great strides forward. It has secured its position as a financial powerhouse, the office sector has taken off, its residential market has grown significantly, and now its leisure scene is about to triple in size.
Nick Ferris of King Sturge says the reason for the growth is simple. “The leisure market is growing because the boundary lines of the city are being expanded.” James Bielby of Christie & Co says the expanding leisure market is pushing Leeds forward in the same direction as Manchester or London.
There are now roughly nine leisure pitches in the city, ranging from established ones such as Greek Street, to new ones such as Brewery Wharf. But has the growth fragmented the market? And will the increasing number of operators find enough customers to survive?
A lot of the growth is on the back of extensive residential and office development. Mixed-use schemes, such as Criterion Place, West Point and Clarence Dock will provide around 2m sq ft of offices and residential, including around 700,000 sq ft of A3 space.
Agents point to the captive audience within these projects as the reason why so many different pitches will work. “Where there’s going to be a large concentration of city dwellers and occupiers, you are going to need A3 going in,” states Ferris.
However, the increased dependency of leisure operators on specific catchments raises the question of what would happen if there was a market downturn. Would theircustomer base be lost? Admittedly thesituation is hypothetical, and one that does not worry agents. “Companies are tied to 15 and 20-year leases. This means they are not just about to close up shop,” says Bielby.
But faced with a growing market, established publicans and restaurateurs are getting nervous. Jon Patrick of Christies & Co has little sympathy. “You talk to leisure operators in Leeds and they say the market is overcrowded. But those complaints are coming from operators who have been in the city for a while, and their stock isn’t as fresh as the new boys.”
The figures show, however, that operators’ nerves could be justified. Richard Shuttleworth of Pudney Shuttleworth estimates that 15% of the city’s A3 stock is on the market at any one time. DTZ’s David Thompson backs up Shuttleworth’s figures. While looking for a site for London-based sushi restaurant, Yo! Sushi, Thompson says other agents in the city were offering him existing businesses. “I was surprised how many agents put forward current operations and told me that I could have those units if I wanted them.”
Despite the number of premises up for grabs, it has not stopped operators vying to get into developments. Both independents and national chains, such as Loch Fyne, Wagamama, and Yo! Sushi are said to be interested in the city.
King Sturge’s Ferris firmly believes there will be enough customers to make the new bars and restaurants work as long as they are of a good standard and well managed. Just as The Calls set an example when it became the first area to be developed off the main city-centre retail pitch, Ferris says operators are not afraid of new areas.
He says: “Given the right site and terms, service retailers and leisure operators are willing to go into uncharted parts of the city, as long as there’s sufficient office workers and residential occupiers to sustain a profitable business.”
Will new hotels kill off the older stock?
With Leeds’ restaurant and bar market growing at a rapid pace, the city’s hotel market is playing catch-up. There are around 18 hotels in the city, and the city’s total bed stock will be around 3,170 by the end of the year, spread between three and four-star hotels and budget operators.
There are three hotels coming on stream during this year. One is the 248-bed Jury’s Inn, which opened in February. Towards the end of the year, Ibis is opening a 128-bed hotel on the Kirkstall Road, and 280 beds will be coming from Bewley’s new unit on Sweet Street. There are also three 4-star hotels planned for the Quarry Hill, Clarence Dock and Sovereign Street schemes.
Christie & Co’s Jon Patrick welcomes the growth in hotels. He believes that, for the city to continue developing and achieving a greater status, the bed stock has to grow as well. But there will be casualties.
Patrick believes new entrants could spell closure for older hotels. “Potentially there are others that will find the going difficult when the new hotels open,” he says. The Wellesley Hotel, next to West Central, closed in 2002, and has now been converted into housing. Patrick predicts other hotels, such as Queens, the Golden Lion, and the Hilton – which he describes as an unattractive building in a great location – will find “the going difficult”.
Simon Hawkins of Gerald Eve believes the older hotels have to make a choice about their future. “These hotels are aware they are slowly being eroded. But they have one of two choices: either reinvent themselves or close and be converted into something else.”
But the older establishments are determined not to go without a fight. Refurbishment work was carried out last summer on the Golden Lion, where more bedrooms were added, and there are plans afoot to start work on the Queens. A Queens Hotel spokeswoman says it will not be struggling in the face of competition from new hotels, and that the hotel is embarking on a multimillion-pound refurbishment.
Major leisure pitches
The Light the 450,000 sq ft, £100m leisure development by HBOS and Clerical & Medical Investment Group opened two years ago. Including a Tiger Tiger, it has fast become one of the city’s main leisure destinations.
Greek Street home to 10 A3 units, Greek Street saw the city achieve its highest leisure rent when Tin Tin Chinese restaurant earlier this year took a 2,250 sq ft unit at £25 per sq ft.
Headrow between Park Row and East Parade, it is an area of the city known as a doomed leisure pitch after several high-profile operations failed. These included Fish! Bar 38, and Slug & Lettuce. Despite this, several operators are planning to open in the area.
The Calls previously a rundown area just off the city centre, it became the first pitch to break away from the traditional leisure pitches when boutique hotel, 42 The Calls opened in the mid-1990s. It is now characterised by independents.
Boar Lane drinkers’ circuit with high street operators such as Yates’s.
Future leisure scene
Ongoing and proposed leisure developments
Clarence Dock Crosby Homes mixed-use waterfront scheme is underpinned by residential, but more than 500,000 sq ft has been designated for leisure usage, plus 200,000 sq ft for offices.
Portland Gate next to Leeds University, when the Taylor Woodrow project completes in 2007, it will have 30,000 sq ft of leisure, 120 apartments, and more than 120,000 sq ft of offices.
West Point a development by KW Linfoot is providing 17,500 sq ft of retail and leisure, with 353 apartments. It is due to complete in February 2005.
Millennium Square St James Securities and Asda Property Holdings are progressing with their £15m entertainment, leisure and office scheme, Electric Press. It should be open later this year.
Brewery Wharf Rushbond’s 500,000 sq ft scheme has 150,000 sq ft of offices, a 248-bed Jury’s Inn, 35,000 sq ft of leisure and 400 apartments.
Criterion Place last month, Simons Estates got approval for its 800,000 sq ft mixed-use scheme on Sovereign Street. It has two towers, 47 storeys and 29 storeys and a 186-bed hotel.
