Friday, 21 June 2019

Leicester Office Development 2019

One of a series of Leicester Business Voice lunchtime events to discuss burning current issues.

This one was superb with three, very knowledgable speakers (Bob Woods – Mattioli Woods, James Phillips – APB and David Beale – City Council).

The conundrum is how to secure more office employment in the City. Figures show that while Leicester is a top 10 retail destination and 13th in population of UK cities; it is only a top 30 office location. But offices rents for Grade A accommodation are currently only about £18 per sq. ft and this is not enough for a developer to make a profit. Here James Phillips gave an excellent idiot's guide to the necessary development appraisal.

Mattioli Woods Scheme, New Walk, Leicester
I believe that it is all the significant schemes this century have had to have some public sector support to fly. David Beale went through the realistic alternatives for the City Council to help. Apart from the smaller, but very successful schemes of its own, such as the Depot and Friar Mill, the Council can't get into developing the big critical impact ones like the 50,000 sq.ft Mattioli Woods scheme at the bottom of New Walk.

It is not only the total cost and risk per se for a Council, like all others severely restricted in funds, but also rules on state aid. Instead its support has to be more nuanced, like CPO powers (for example at the Waterside – but note the massive effort and time involved), planning briefs and lease underwriting, etc.

Ian Woods, who went through his 30 year journey from a private garage start up to a 600 employee company, had made 5 moves to get to the bottom of New Walk. He explained the rationale each time. And how now the City centre ticked the boxes for his staff, both for the ambience of the place, but also the accessibility for the many walking, using the bus or taking the train to work. And that is what mattered, as staff retention for him was critical.

And what was Ian’s take? We are thinking the wrong way round.  It is not the building, it is attracting the people that is key. Make them want to be here and once here stay. Work more on creating the demand as a place where people want to work. Given that the environment of the City centre has improved and is improving dramatically over the last 10 years with over double the number of people living there in this time, the City is obviously doing something right. Now what is needed is to shout about it a bit more. 

Stolen from Fields of Dreams (1989) – “Build it and they will come” coupled with the Leicester City football club motto: "Keep the faith!” seems to be the answer!