Positive start to office market activity in Leeds

The Leeds Office Agents’ Forum (LOAF) has released its quarterly office take-up figures for the Leeds office market which, for the first three months of 2014, show a positive start to the year.

DePuy Building

DePuy Building

Activity in Leeds city centre for the first quarter (Q1 2014) reached 140,778 sq ft across 41 deals. Whilst this is a 40% decrease in take-up compared to the same period last year the Forum points to Q1 2013 being exceptionally high by Leeds’ standards and the start to 2014 signals continuing confidence in the market.  The largest office letting in Q1 2014 was University of Law’s relocation from York to 15 – 16 Park Row agreeing to 26,337 sq ft of space.

Richard Dunn, Partner at Sanderson Weatherall, said

2013 set a real precedent as Leeds recorded the best office take-up for over 15 years – levels we are unlikely to repeat at present given relatively constrained stock levels.  That said, the completion of 41 city centre transactions in the first three months is extremely healthy, though we are still finding that deals continue to take time to complete.”

Grade A supply continues to become more constrained although the Forum points to the upcoming practical completions at Evan’s Minerva, MEPC’s 10 Wellington Place and later in 2014, Formal Investments’ 21 Queen Street, which will help address this. Other office refurbishments will also add to the supply chain over the year.

Developers are well aware of the supply/demand imbalance and the question on everyone’s lips is when we will see a return of speculative or largely speculative development.


Richard Dunn
Partner, Agency
(0113) 221 6137
richard.dunn@sw.co.uk

Business Rates in the April 2014 Budget

The Chancellor of the Exchequer’s April 2014 budget is another missed opportunity to help the struggling business ratepayers of the north.

It was already known that the chancellor had provided a minor fillip for UK retailers by knocking £1,000 off their rates bills and limiting the uniform business rates increase to 2%, but this is really just nibbling at the edges of the problem.

Whilst Mr Osborne did announce a welcome three-year extension to enterprise zones and a brand new zone for Coleraine in Northern Ireland, coupled with an unexpected and welcome cut in energy costs for manufacturing businesses, there was no measure which addressed the issue of business rates.

Eighteen months ago the coalition government controversially postponed the intended 2015 Rating Revaluation planned from a time when it was most needed, until 2017. The result has been that northern ratepayers continue to heavily subsidise London and the south of England, where media reports now regularly report a rapid economic recovery. The cranes have returned to the London skyline, but one must ask what help is there for the north?

Why the government continues to prevaricate on business rates when urgent steps are both needed and could easily be taken is a modern mystery.

We have been lobbying for some time for the postponed revaluation to be brought forward to 2016, a move which the Valuation Office Agency could readily cope with, coupled with a commitment to future revaluations occurring more often, every three years.

In a similar vein it has also been recommended a new tax be levied on online internet sales at point of sale, with 100% of the new revenues gained being dropped into the national business rates pot to provide new reliefs for struggling high street retailers.

We advocate a new look at methods of valuation applied to high street shops to put them on a level playing field with pubs and petrol filling stations, where fair maintainable trade and petrol throughput become determining factors towards the level of assessment.

There should also be a comprehensive review of current reliefs and exemptions as recommended by the 2007 Lyons Inquiry which, as well as creating new concessions, may result in the removal of some current ones.

Last but not least, a considerable number of small assessments which attract the sheer numbers of appeals could at a stroke be removed from rateability altogether, thereby exempting many small businesses from rates altogether.

A reform of the Business Rating system is thankfully now being proposed following the report on 4th March 2014 of the House of Commons Business Innovation and Skills Committee …now they just need to get on with it!


Robert Brown BSc FRICS FIRRV is Head of Rating Services at Sanderson Weatherall; President of the Yorkshire & District Institute of Revenues, Rating and Valuation and a committee member of The Rating Surveyors’ Association.
(0113) 221 6120
robert.brown@sw.co.uk

New data shows Leeds office take-up highest on record for 15 years

A surge in occupier demand for office space in Leeds last year has resulted in the best take-up figures for over 15 years providing further evidence of the recovery in regional leasing markets as economic conditions improve according to newly released data from the Leeds Office Agents’ Forum (LOAF).

According to office market data compiled by the leading commercial property agents in Leeds, 2013 occupier take-up in the city centre reached a full year total of 794,043 sq ft, the largest transactional volume for 15 years and a 96 per cent increase compared with 2012 (405,951 sq ft). Out-of-town activity reached 491,082 sq ft, a 44 per cent increase on the previous year (340,374 sq ft).

Specifically in Quarter 4 (Q4) transactional activity in Leeds city centre totalled 254,798 sq ft across 34 deals, a phenomenal 262 per cent increase on the same quarter last year (70,361 sq ft). Activity was boosted by two larger sized deals: Leeds City Council taking 50,000 sq ft of new, additional space at Merrion House and KPMG agreeing terms on 28,271 sq ft at Broadgate.

The out-of-town market recorded 200,987 sq ft in the last three months of 2013, a 203 per cent increase compared with the same quarter last year (66,370 sq ft). Of the 22 deals to complete, the largest was Lowell Group taking 81,911 sq ft at Leeds Valley Park.

Richard Dunn, Partner in Agency commented:

As we expected, Q4 take-up has been strong with some sizeable new lettings both within the city centre and out-of-town markets. In all, we’ve seen the best level of transactional activity for over 15 years; driven in part by improving confidence in the wider economy which has had a positive ‘knock on’ effect on occupier sentiment and ultimately their confidence to make property decisions.

The pre let market is well and truly back evidenced across the year by the deals involving Leeds City Council, KPMG and Shulmans. The level of smaller sized deals below 5,000 sq ft, of which there were 18 in the city centre and 16 in the out-of town market in Q4, shows that whilst encouragingly the activity has been driven by expansion we are continuing to see the usual churn of lease events and consolidation.

Whilst 2013 take up levels make for great headlines the supply of available new quality accommodation has obviously reduced even further with less than 200,000 sq ft of Grade A space currently available which is approximately just nine months average Grade A take-up. This extremely low level supply means that currently only one building can realistically accommodate a requirement over 30,000 sq ft. There is now a genuine opportunity for developers and property owners to focus on building speculatively and complete high quality Grade A refurbishments.

The Leeds Office Agents’ Forum was established to collate and distribute definitive market information. Its members include Sanderson Weatherall, BNP Paribas, Carter Towler, CBRE, Colliers International, DTZ, Eddisons, GVA, Jones Lang LaSalle, Knight Frank, Lambert Smith Hampton, Savills and WSB.

MAJOR SALE OF WOOD WASTE BIOMASS ENERGY PLANT (NEW 2009/2010)


On the instructions P A Flint Esq. & B Green Esq. of KPMG the Joint Administrators of Sandsfield Heat & Power Ltd (In Administration)
Piecemeal (subject to Conditions of Sale and unless sold previously)

Timed online bids & photographs via www.bidspotter.co.uk

Bidding: Closes from 12 noon (local time) Wednesday 10 September 2014 (offers for the plant considered prior to auction)
View: Strictly by appointment with the agents
At: Sandsfield Heat & Power Ltd, Catwick Lane, Brandesburton, Driffield, YO25 8SB, UK


Plant available immediately by private treaty as a complete unit for removal or to remain in-situ *

Click here to download a copy of the Online Auction catalogue

Click here to download a copy of the Colour Brochure

Siemens SST-110 CA36K 3482kW Steam Turbine; Indar BZK-630-L/10 4000kVA AC Generator; Thorne/ BIB Cochran Steam Drum Boiler c/w Thorne/ BIB Cochran Waste Heat Unit; Thorne/ BIB Cochran Economiser; Thorne International Boiler Services Super Heater Chamber; Serck Como Hamworthy Steam Condenser; Two Bioflame Designed Steel Refractory Brick Lined Furnace Chambers c/w Comtherm EF0300/H Oil Burners & Steel Refractory Brick Lined Residence Chambers and ash removal conveyors

Saxlund Six Track Walking Ladder Push Floor Intake c/w Spreader Auger and chain & scraper conveyor;Mogensen SPL SRS 5000/800 – L356 Single Deck Vibratory Screen; Dantherm FS722/5.75/805(805) Six Section Dust Filter Unit c/w Reitz Centrifugal Fans; ABB ACF-NT Emission Control c/w Durag D-RE 250D+D-RE 250T Monitor Equipment; Transicon Power Distribution & Control Panels; Parker K-MTR Unit; Chain & Scraper/ Flight, Screw & Auger Conveyors by Tramco and WAM up to 16m long

Two x 30 tonne (Sodium Bicarbonate Capacity) Loadcell Mounted  Storage Silos; Plastic Bulk Liquids Storage Tanks (two x 30,000 & one x 7,000 litre cap.); Dosing Pumps & Pumps by FlowserveGrundfosClarke & VerderflexAWE Ltd UO 2000 BW Reverse Osmosis Unit; Park Water Treatment Equipment; Approx. 125 lin. m. Stainless Steel Coolant Piping up to 300mm dia.

FG Wilson Packaged Generator Set (understood to be 550kVA); Six Van Spall DVVD AWS 16 Fan Coolers; Two Worthington Creyssensac ROLLAIR 1500 Package Air Compressors; Air Dryer, Galvanised Steel Air Receiver; Two Harlequin 10,000 litre Plastic Bunded Fuel Oil Storage Tanks and Flowserve 1.19m³ Blowdown Vessel 

Tel: +44 (0) 113 221 6210
auctions@sw.co.uk
It is likely a sole principal contractor will be appointed to remove ALL of the fixed plant and equipment.  The contractor will produce a priced list (for the removal of and loading onto purchaser’s transport) available for inspection prior to the sale closure.  Please note this contract is entirely between the purchaser and the contractor.  Further details are available from Stephen Jepson or Mark Crow of Sanderson Weatherall LLP, tel: +44 (0) 113 221 6210
* Subject to successful purchaser agreeing terms with the Landlord

Autumn Statement Business Rates Cap – Too Little Too Late

Easing of Business Rates is to be welcomed; however political tinkering with the system is no substitute for a much needed rating revaluation.

Mr Osborne’s measures announced in the Autumn Statement to ease the tax burden on businesses and retailers are to be welcomed. The hard lobbied decision to cap the business rates increase at 2%, along with a new reoccupation relief, halving rates on newly occupied units, should encourage the use of some empty town centre shops. Likewise the move to discount business rates by £1,000 to every retail premises in England, with a rateable value up to £50,000 is a considerable boost for independent retailers who have struggled hard on our High Streets.

However it must be emphasised that these measures, whilst undeniably easing the tax burden and gaining short term political favour are, in reality measures to address the inadequacies of the current situation which have arisen in large part by the government’s flawed decision to postpone, for two years rather than bring forward, the Rating Revaluation that was due to happen by law in April 2015.

The often misunderstood tax represents a huge cost for retailers and businesses; however it is a common misconception that the purpose of a revaluation is to increase the amount of tax. Indeed the sole purpose is to revalue all business properties and, in effect, “reset the dial” to a new valuation date; taking into account wherever rents have fallen and wherever rents have increased.

The extension of the small business rate relief scheme is also welcome, but again it has only become necessary because of the postponement of and failure to bring forward the revaluation.

A relatively simple modification which Sanderson Weatherall was advocating even before the postponement is to re-introduce the “lesser of” two valuations, a very simple solution that was in place in the 1967 General Rate Act. Briefly, a ratepayer used to be able to appeal on the basis that if his rent has recently fallen below the existing 2010 Rating List assessment, he will be charged on the lower figure instead. The national rate poundage is then adjusted upwards (but only slightly) to cater for any total rateable value loss due to appeals.

I would argue that there is no need for an entirely new system to replace business rates. It just needs to be better understood, operated properly and modified as and when necessary without being subject to wholesale political meddling.


Robert Brown
Partner, Rating
(0113) 221 6120
robert.brown@sw.co.uk

Passing the Test of Time

Passing the Test of Time

A showcase office development has put Darlington on the UK style map once again by winning a second major national title.

Lingfield Point’s Memphis building, which houses the Student Loans Company (SLC), has been awarded the prestigious BCO ‘Test of Time’ Award five years after it was named the best recycled building in the country.

That’s no mean feat, with scores of fabulous born-again buildings vying for the title.

Not only does it show that the 1,300-plus SLC employees are working in the best possible surroundings but also that Lingfield Point is leading the rest of the UK when it comes to truly sustainable development and design.

Memphis was created by up-cycling a 70,000 sq ft disused building that was once part of the 1950s wool factory Patons & Baldwins – the ultimate in recycling.

And should anyone think recycling means a quick rub down and a coat of paint, the stunning offices prove just how much thought, design and hard work goes into projects like this.

John Orchard, a director at Lingfield Point, said

Winning a BCO award for the second time really is a coup for us, for Darlington and for the North East.

Given all the hype – and the massive price tags of buildings in other parts of the UK – the fact that the best offices are right here is certainly something to celebrate and shout about. Even our success is sustainable here!

The BCO judges said:

The design of the former wool mill epitomises work/life balance and provides quirky and interesting meeting spaces, breakout areas, quiet zones, a central café and a games area.

The invigorating workspace makes it viable for the staff to work their round the clock shift patterns.

The contemporary and vibrant feel noted by the judges five years ago is still there in abundance. This successful regeneration shows that Darlington offers a strong base for employers.

Around 27,000 visitors saw the Memphis building recently as part of the back-drop to the UK’s first Festival of Thrift held at Lingfield Point.

Festival curator and one of Britain’s top designers Wayne Hemingway, said:

Rather than flatten the site and build soulless new build, as is so often the case, Lingfield Point is – lovingly and artistically – starting to bring these evocative mid-century factory buildings back to life.

Now there are dozens of companies, a cool canteen, a child care nursery and homes being built in one some of the open spaces on the site.

I was taken aback by the attention to detail and couldn’t think of a better example of up-cycling of old industrial buildings in the UK.

For more details go to www.lingfieldpoint.co.uk.

Or http://www.bco.org.uk/Awards/Winners/2013/TestofTime2013.aspx


Jonathan Simpson
Partner, Agency
(01642) 426 918
jonathan.simpson@sw.co.uk

Making of a Great Point

The regions are set to become the new centre of the UK’s property world in the coming years, with predictions that the secondary market will outperform prime during the recovery from global economic meltdown.

John Orchard, a director of Lingfield Point, believes what is happening at their business park in Darlington, is shining a light on a better way of getting the most out of regional property – and setting a money-making trend for others to follow.

John says the opportunities for commercial success in the regions are considerable and cites several reasons that they are now reaping the rewards of its investment in the 107 acre former Patons & Baldwins wool factory site.

With construction underway on eco homes Lingfield Point is set to become Europe’s largest mixed-use sustainable development and a return to its glory days at the heart of the Darlington.
John takes a holistic view of property development – mind, body and soul – by looking after the physical appearance, the ethos and culture, and most importantly, the ‘feelings’ experienced by its customers.

And therein lies one of the answers to why it is so successful – its tenants are ‘customers’ and it borrows its gold standard management approach from the hospitality industry.

Lingfield Point believes in working with the best and it’s no coincidence that the site was master-planned by architects FAT, or that it won the BCO Award for the UK’s best offices and five years later had that reaffirmed with a second win with the Test of Time Award.

John also worked with designers Wayne and Gerardine Hemingway to establish the UK’s first ever Festival of Thrift, perfectly set around the reclaimed, recycled, upcycled buildings that comprise Lingfield Point.

The festival, a very timely, fun-filled ‘celebration of everyday sustainable living’, was a massive success, taking everyone by surprise and attracting 27,000 visitors over a weekend. This massive community event put the finishing touches to a development that is rapidly becoming a textbook example of place-making at its best.

Design, architecture and art are at the heart of all things Lingfield Point – attention to details is obvious everywhere you go in Lingfield Point from the tiny Please don’t stay off the grass signs, to the vast public works of art, the sweeping original art deco staircase and the threaded corridors of the YARN building.

John explained:

Doing business in the regions, especially, the North East is a different thing from in London. In London, property companies can complete deals without ever seeing the client – the agent speaks to the agent. In the North East they like to meet face-to-face, look you in the eye and shake hands – it’s a much more personal way of doing business. It’s hard work to attract top class customers, and at Lingfield Point we have some fantastic customers, the national Student Loans Company, AMEC and NAAFI to name a few. It’s hard to attract them so we work hard to keep them happy.

Our customers want to keep their staff, they don’t want the churn or the expense of training new staff. Many have a young workforce – they want a trendy workplace and things to keep them engaged.
We recognised that and addressed it. We regularly ask our customers what they want and do our best to give it to them. We offer ‘added value’ in everything we do and it is not by chance the number of people working out of Lingfield Point just keeps going up and up.

We programme regular events to engage our customers, from cycling group and fitness classes to a knitting circle, bees and allotments, there’s something laid on most days. We have remodelled our on-site team to provide a hotel style concierge service. Our artist in residence provides classes in weaving and felting and her classes are packed.
We know that’s unusual in the rather macho world of property where creativity is often a bit of a dirty word.

We also unashamedly hook up with top people – like FAT and like Wayne Hemingway – to bring something different and something that makes a tangible difference to the way our customers feel about us.
It is a big deal for a business park in Darlington to be winning national awards, especially one that was built in the 1950’s. The Memphis Building won the BCO National Award for Best Recycled Workplace when it opened in 2009 and five years on has just been awarded the BCO National ‘Test of Time’ Award.

Ok you can’t put a meter on it, but the combination of all of this extra effort means we are punching above our weight and despite the awful economic climate over the last five years our income keeps on rising.

In his blog, Wayne Hemingway recently wrote

Rather than flatten the site and go with soulless new build, as is so often the case, Marchday lovingly and artistically started to bring these evocative mid-century factory buildings back to life.

Now there are more than 2,500 people working there, for dozens of companies, a cool canteen, child care nursery and now homes are being built in some of the open spaces on the site.

We were taken aback by the attention to detail and couldn’t think of a better example of up-cycling of old industrial buildings in the UK. If it had been in London rather than Darlington it would be being used as an exemplar by Government agencies and the media.


Jonathan Simpson
Partner, Agency
(01642) 426 918
jonathan.simpson@sw.co.uk