The shortage of office stock in York was never more evident than in Hiscox’s 12-month search for a headquarters office building. The specialist insurer has ended up building its own offices on Stonebow in the city which, when it completes in September, will house 500 staff.
But during that long process of search and construction little has changed in the way of office supply. And it is a concern for some agents.
“The lack of space almost puts people off,” says Jonathan Shires, director of office agency, CBRE.
And Miles Lawrence of York-based Lawrence Hannah agrees: “There are no real opportunities for significant office development. If we were to see another inward investor like Hiscox then it is a concern.”
No real opportunities in the short term that is. In the longer term there is York Central. The 86-acre mixed-use regeneration project next to the station was mothballed during the recession, as were many large projects. But last autumn the city council and Network Rail signed a memorandum of agreement to move the project forward.
Then, in last month’s budget the area was given housing zone status to help accelerate the development of the homes on the site. Money has been secured from various sources (see box) for infrastructure and remediation.
There has been some development. Network Rail opened a route operating and training centre in 2013, but further office development will be a way off.
Shires says access to the site needs to be sorted first: “It will be at least another 12 months before they break ground and three-plus years before we see buildings. If you are looking for a prelet then you are OK.”
Neil Ferris, assistant director of transport, highways and waste at York city council, says: “Work on the site is continuing and progress is being made. The council and Network Rail are jointly preparing plans to guide development of the site, with public consultation programmed for summer 2015 ahead of next year’s MIPIM.”
When the development is complete there could be up to 7,000 people working there – but that will provide little comfort in the short term.
York office market
Most of the demand in York is for space of 10,000 sq ft or less and rents are nudging £17 per sq ft, says Miles Lawrence of Lawrence Hannah.
Demand has risen as the economy has recovered, but stock remains an issue. Permitted development rights have turned developer attention to residential conversions rather than office refurbishment.
“We could definitely do with some more stock. Most of what we’ve got we are letting,” says Lawrence.
