As take-up of commercial space continues to grow in regional locations, office space in particular is becoming more difficult to acquire as development remains slow to catch up with the pace of the market.
However, Sheffield has this week taken the first steps to increase its Grade A office supply, having started work upon a ten storey tower which will mark the city’s first speculative build since before the recession began in 2008.
The property, at 3 St Paul’s Place, will contain a total of 76,000 sq ft of Grade A office space and will complete Sheffield’s £130 million Heart of the City project. This scheme also includes a neighbouring Mercure hotel, along with two further office towers, a 330 unit residential block and the “Cheesegrater” multi-storey car park.
Leader of Sheffield City Council, Julie Dore, believes that the completion of 3 St Paul’s Place in November 2015 will help to grow business investment in the northern city.
She says; “The city centre is a major driver of the city region’s economy.
“By enabling this development to proceed now, it will help complete one of the key projects in the City Centre Master Plan and help to support business growth in Sheffield.
“These are challenging economic conditions and the council has taken the initiative to make things happen – we firmly believe this new development will assist several businesses that want to move into good quality new offices, and could attract businesses into the city.”
The property, and indeed the Heart of the City project itself, is being funded through several means: an ERDF grant, senior debt funding from Barclays and, in addition, a £3.75 million loan from a local initiative set up to support growth in infrastructure and real estate investment throughout the Sheffield area, known as the Sheffield City Region JESSICA Fund.
This level of support has allowed the city council to embark upon the latest build despite not having yet secured tenants.
During the recession, and so far during the recovery, speculative developments in key regional cities have remained relatively rare due to the risky financial nature inherent in this type of development. This risk was underlined by Crown House which, until earlier in the year, had stood empty since its completion in 2010
Fortunately, director David Topham of development firm CTP is confident of the scheme’s success.
He says; “We are delighted to be working with Bowmer & Kirkland again.
“They have a proven track record of completing projects on time and within budget.
“Of course there is an element of risk in any speculative development, but we are extremely confident occupiers will be swiftly found.”
