With developments springing up all over the East Midlands, Sam Metcalf finds out which city is winning over the most companies and residents.
Just who is winning the race to attract employers to their gleaming developments in the East Midlands? Over the next few pages we present an overview of what’s happening in the triangle of Derby, Leicester and Nottingham.
Leicester
Development in Leicester was trickling through but it is picking up the pace, now The Curve and Highcross shopping centre have opened. Under the guidance of Leicester Regeneration Company (LRC) a £3bn investment programme is ongoing.
The city has been transformed into one of the most progressive destinations in the UK this year, undergoing one of the biggest step changes for a British city – with many business, leisure and tourism-related developments coming to completion.Collectively, these look like Leicester’s strongest developments in years in terms of attracting businesses, visitors and investors.
With all the access of London and other major business hubs but without the associated costs, Leicester is a city on the radar as an business location.
Major projects set to transform Leicester include the Curve performing arts venue in the city’s Cultural Quarter; the £350m Highcross development, which is set to propel the city into the top-ten shopping destinations; and a new business quarter, creating 100,000 sq m of prime office space.
The Leicester Office campaign has been launched, aiming to increase business investment in Leicester and in the county. It has been developed by Invest Leicestershire, the inward investment agency for city and county.
Miles Templeman, director general of the Institute of Directors, was charmed by Leicester, saying: “Leicester has so much to offer. The city has clear ambition and is building a better future.It deserves a higher reputation as a business location.”
It is reckoned London businesses moving to Leicester can save up to £12,500 per employee per year on average, while keeping the same specifications for office space and employee skills. That £3bn regeneration programme has created more than 200,000 sq ft of grade A office space.Further developments are planned and more space is available at key sites throughout Leicestershire.
LRC is forecasting homebuilding will rebound after the credit crunch, with the city better placed than most others for a quick recovery. Several developers had assembled large sites for homes in regeneration areas before the downturn, and permission for 5,000 homes is in place. This means construction can start quickly once the economy picks up.
The downturn, says LRC, has also prevented Leicester suffering from an over-supply of small apartments, a problem that has blighted other cities including Nottingham and Leeds.
“This downturn is causing developers real difficulties, and we would prefer to see a buoyant economy, but it offers a chance for the market to rethink the mix of houses we build in Leicester,” says John Nicholls, LRC chief executive.
He highlights sites at Abbey Meadows, one of the five key areas in LRC’s masterplan for central Leicester, where developers are planning different kinds of city living.
“Approved schemes by Sock Island Developments, Bestway, and on the BUSM site all include a large proportion of town houses, which we need if we’re to create real communities,” says Nicholls. “That’s very encouraging.”
Although LRC’s masterplan is designed to stimulate the city’s economy by making spaces for job-creating businesses, new homes in the city are an important component, insists Nicholls.
LRC forecasts up to 8,000 homes will be needed as people are attracted to city life by a mix of work, shopping and leisure opportunities. Research by CACI indicates a market exists for a wider range of houses in central Leicester beyond the smaller apartments many developers have been constructing.
The study indicates town houses and larger apartments would provide the right kinds of places to live for people attracted to the city by LRC’s commercial regeneration projects, such as the science park planned near the National Space Centre.
Derby
Development in Derby city centre under the area’s £2bn regeneration, spearheaded by Derby Cityscape, continues to gather pace with several major projects starting and others nearing completion.
According to Derby Cityscape chief executive John Cadwallader, the robust mix of development set out in the company’s development masterplan will ensure that city centre regeneration will brave the market storm and steer a stable course to its long-term aims.
He says: “Derby wasn’t involved in the first flush of regeneration, so it’s not blighted by scores of empty apartments, unlike other larger cities.
“We’ve always taken the balanced view of the regeneration opportunities and ensured housing, for example, has been addressed with different consumers in mind.
“We’ve also not relied on the housing market for investment in the area – taking the holistic view that, to achieve long-term regeneration, we needed a mix of housing, commercial property, retail and tourism and leisure development supported by better infrastructure and enhanced public realm.”
And Cadwallader’s optimism seems well-founded.Projects completed include the £30m Cinema de Lux in the Westfield Derby shopping centre; Quad, the £12m centre for art and film on the Market Place; and the extension to Derby College’s Joseph Wright Centre.
The next stage of Derby Cityscape’s public realm strategy has also been completed with £2.1m improvements finished along East Street and plans nearing fruition for the corridor between the Cathedral Quarter, Riverlights and Westfield Derby.
Work is also progressing on transforming Cathedral Green with a £3.8m landscaping scheme that will coincide with the installation of footbridge over the River Derwent, expected to be completed by autumn 2008.
Work is under way on the Jury’s Inn development, which will include a 226-bedroom hotel, 89 apartments, bar and restaurant, casino and car park to be completed by mid 2009; and on the £36m development by Derby College to transform The Roundhouse – a historic railway building – into a vocational learning facility and visitor centre.
Other developments being built include the first phase of Sadler Square, a £16m mixed-use scheme of shops, cafe bars and apartments with rooftop gardens in Bold Lane.
In terms of office developments, work has started on two developments around Cathedral Quarter: Central Square, a £12m five-storey building offering 50,000 sq ft of office accommodation by Chesterfield-based Bolsterstone; and City Gate House, a £15m 60,000 sq ft scheme comprising grade A offices with retail and leisure space by Cedar House.
Within the public sector 20 acres of land are to be released at the site of the Derbyshire Royal Infirmary, following the completion of the Derby City General Hospital in June 2009. This site, on the eastern outskirts of the city, is well placed for regeneration being close to Westfield Shopping Centre.
Derby Hospitals NHS Trust plans to include a hotel, shops, apartments, a campus-style office complex and possibly a school. The trust believes the development will be a catalyst to improve the housing in the area, and says the planned office development will be attractive to government organisations relocating from London.
Heather Dixon, partner at Flint Bishop in Derby, says: “This is exciting and, while it could prove controversial because there is some overlap between the trust’s proposals and the content of Cityscape, adds a new dimension to the city’s regeneration.The debate reflects Derby’s growth and, in the long term, will only enhance the end result.
“There may be financial uncertainty across the UK, and a lack of funds in the financial markets, but I’ve no doubt Derby will capitalise on its growing economy. The commitment centring on the city means we’ll soon have the infrastructure to support our local economy.Derby really is beginning to set the pace in the Midlands.”
Work has started on the £100m Riverlights scheme, of which phase one incorporates hotels, a casino and commercial leisure; and also the bus station, which is expected to be operational by 2009.
Plans for a £150m landmark office development with the capacity to bring up to 4,000 jobs into Derby city centre have been unveiled. Derbyshire developer Norseman Investments is proposing a 400,000 sq ft office development on a three-acre site opposite the Westfield shopping centre after negotiations with Speeds, the vendor.
The development will be the largest office development in the city and create a landmark business complex at the gateway to the Castleward area, acting as a catalyst to wider regeneration.
Elsewhere in Castleward, Derby Cityscape has led negotiations to buy five sites that are key to its plans for redeveloping the area.
Knight Frank has been appointed to market and select a developer for the 33-acre Castleward area, which is between Pride Park and Westfield Derby, to include an urban village consisting of 1,500 apartments and family homes with a boulevard linking the railway station to the city centre. The community will also benefit from open spaces and improved retail and employment opportunities.
Cadwallader says: “By taking the holistic approach, we’re confident the mix of developments completed, progressing and planned for the city centre will weather the economic storm.This confidence is re-enforced by the strong performance of Derby’s economy even in these challenging times”.
“One of Derby’s key strengths is the power of partnership.The private and public sectors are working together with the same goal – to ensure Derby realises its potential and secures sustainable development for this and future generations.”
Nottingham
Demand in Nottingham is strong, but with little Grade A space coming to market and a limited pipeline Nottingham is in danger of losing occupiers to its nearby sister cities.
However, those in the know say there are several large requirements from developers outside the city that have been waiting for the right scheme to come along. A number of local business occupiers are also looking either to expand or upgrade their space.
Take-up was 500,000 sq ft in 2007 and reached 75,907 sq ft in first quarter of 2008, which indicated that the Nottingham market was at a slight disadvantage to its closest neighbour, Leicester, which has a good supply of grade A space and lower costs in terms of land, office space and labour.
So, what’s holding them all back from a trek to Leicester? The Nottingham office market has been constrained because of a lack of space coming on to the market.
Waterfront Plaza, on Station Street, is the only available grade A accommodation left available in the city centre, with rents at about £17.95 per sq ft.
Availability, in and out of town, stands at 733,000 sq ft.About 234,000 sq ft is new space, 499,000 sq ft second-hand and there is about 54,000 sq ft under construction.
That could be about to change, though. Developer Wilson Bowden has consent for 100,000 sq ft on Wilford Road in the city and has submitted an application for four speculative office buildings totalling 90,000 sq ft at Nottingham Business Park.
But uncertainty over the future of Wilson Bowen remains. Plus, the downturn in the residential market has meant commercial developers are getting more of a look in on city centre sites.
Nottingham is also improving its infrastructure to incorporate a move to the south. The Express transit system, scheduled to be complete by 2013, will connect the city centre with the office developments to the south, including Wilson Bowden’s scheme and the NG2 development where Miller Birch let its Cirrus building to Specsavers.
Closer in, Southreef Properties – under the ownership of Chek Whyte – is building up to 135,000 sq ft of offices as part of a mixed-use scheme on Canal Street, expected to complete towards the end of this year.
A second phase is expected to comprise a further 80,000 sq ft of offices to come online in 2011, although it does not yet have planning.
To the south east, Eastside City Developments is working on a 50,000 sq ft speculative building alongside Laurus, a 50,000 sq ft extension to Biocity, the high-tech incubator. Laurus was opened in early October.
Chief executive Dr Glenn Crocker says: “This building will cater for companies that have grown significantly and want to stay. Companies based here employ nearly 500 people and will continue to provide job and career opportunities in the bioscience and healthcare sectors.”
Phil Quiggan, director of Lambert Smith Hampton’s Nottingham office, thinks the downturn is affecting the Nottingham market more than most.
He says: “There are chunky requirements out there, but the only new stock is at Southreef. With the economic climate as it is everything else is being sat on at the moment. I can’t see that changing in the near future.”
However, some are more optimistic. Roger Summerton, senior partner of KPMG in Nottingham and chairman of Nottingham Development Enterprise, believes the city’s strengths will ensure it continues to move forward, despite financial and economic turbulence.
He says: “The financial and economic traumas will have an impact on the city, whether in relation to businesses and ongoing inward investment, or on the people that live here.
“But Nottingham is in a fortunate position in that its economic diversity and its growing strength in emerging industries will shelter it from the full impact of the current conditions.
He adds: “When you add to this the possible development of a MediaCity near to the Queens Medical Centre, it is clear to see that Nottingham is showing some real leadership in providing the right infrastructure for such a key sector.
“If you link this significant property proposition with the output from two outstanding universities, you can clearly see the strength of the offering.
“For the time being the city’s skyline remains littered with cranes as planned redevelopment work gets under way.
It remains to be seen as to whether the office footprint will get filled in the short term, but there is no doubt that Nottingham will be ready to take advantage of the market upturn when it comes.”