The Future of Leeds: A city striving to be the best

When is great still not good enough? Ask the leadership of Leeds. Already mentioned regularly when discussion turns to the UK’s best places in which to live or work, the city council is now aiming to be not just one of the best, but the very best. In its own words: “Compassionate and caring with a strong economy.” Like cities across the country, Leeds faces an even greater need for those attributes as it exits the Covid-19 pandemic. The crisis of the past year and a half is allowing city and industry leaders to rethink how modern communities look and live. There’s big potential for those willing to grasp it. In the real estate industry, that means bringing forward the kinds of schemes that the city once lacked, says Paul Pavia, head of development at MEPC, the company behind Wellington Place, a 21-acre urban quarter with a masterplan that will ultimately offer 2m sq ft of office, leisure and retail space. “It was a large site with massive potential five minutes from the station,” Pavia says of the scheme’s original plot. “At the time, Leeds really didn’t have a central business district that competed with other major cities. And for a city of Leeds’ stature, that was a real omission.” Now, the offices in Wellington Place are home to corporate occupiers including Sky Betting & Gaming, law firm Shulmans and the GPA. “It’s 1.2m sq ft of office space delivered in seven years – I’m not sure where else that’s been done,” says Pavia. “I hope that Leeds can feel proud and feel like they can definitely punch their weight in in the UK.” Opening dialogue As the city economy reopens, asset managers such as MEPC are trying to understand what their tenants’ journey back to the workplace looks like. At Leeds University Business School, Helen Hughes, an associate professor who studies the way we work and how that shapes our workplaces, says working practices have “undoubtedly” been changed since the pandemic. “That catalyst for change has triggered new ways of thinking about how you can do your work,” she adds. “’Actually, I don’t need to be overseas to do this bit of my work anymore’ or ‘I don’t need to be in an office to do this bit of my work anymore’. I think it’s opened a new dialogue with people about how they do their work. And a lot of people are reluctant to get rid of some of those advantages that they’ve seen in the last year or so.” That will change the landscape of a city like Leeds, says Hughes, who is currently working on a project examining how offices will alter after Covid-19. “The question now is what space do we need and what do we need that space for? And I think employees need to be attracted back to something that is better than what they’re doing at home. There is an appetite for that amongst a lot of employees. The research we’re doing is showing people are really missing spontaneous conversations.” She adds: “Organisations want to get some of that back but they need design to support that. So perhaps you live in the suburbs, and the idea of travelling all the way to Leeds to get exactly what you can do at home is not appealing to people. Organisations are realising this and thinking, ‘How can we make our workspaces not just Covid-safe but somewhere people can thrive and can deliver on those innovations and collaborations?’” Evolving demands For Savills directors Mark Wilson and Patrick Carter, the line between the best buildings and those that will struggle to woo back occupiers is becoming clearer. “There’s definitely an emphasis on evolving to meet occupier demands,” says Wilson. “One of the most important things is ESG and particular emphasis on the environmental part for investors, where what we’re going to see is people looking to BREEAM ratings to get excellent and outstanding.” Carter adds: “We’re seeing almost a joint direction from developers and occupiers. Both are driving towards achieving the same thing, which is stimulating a lot of the unique development that we are seeing in Leeds. And that is basically the demand from the occupiers for accommodation, but also from the developers getting on board, spending the money and going into the detail of exactly what occupiers are wanting.” That won’t only shape the way that Leeds’ buildings are built, Wilson says, but also whether they can be funded. “We’re already seeing the green discount on debt,” he adds. “But there’s actually going to be investors having to meet certain criteria to be able to invest into new and existing buildings. So existing buildings will have to change, whether it’s through management, through refurbishment, redevelopment or repurposing to meet occupier needs but also meet the ESG credential that investors need.” Technology, too, is likely to be a game changer, giving asset owners a clearer picture of demand and offering occupiers amenities that could play a key role in encouraging workers back to their desks. Leeds is a smart city pioneer, says technology-focused Shoosmiths partner Alex Kirkhope, pointing to Data Mill North, the city’s open data initiative. “There’s a great business community here, fantastic educational institutions and a great ecosystem of tech companies already in the city – the challenge on the back of all of that is bringing it together,” Kirkhope says. “Historically, that’s always been seen as a local authority or public sector task to bring all of those strands together. I think the truth is that’s only going to happen in a meaningful way over the next decade where the public and private sectors come together. Investors and developers can no longer come in, build their building and see it in isolation. The more we can work in a connected way, the greater the benefits the city is going to see over the over the coming years.” Richard Outhwaite, a colleague of Kirkhope working in the real estate team, says the industry is ready to bridge the gap. “One of the beauties behind real estate is that they’re always willing and able to adapt quickly to evolve to an ever changing cultural and economic environment,” Outhwaite says. “Real estate is prepared to embrace that challenge and meet it.” Embrace, don’t fight About six miles outside of the city centre, Scarborough Group International is trying to bring together all parts of the puzzle – new office space, a differentiated retail offering and new homes – at its Thorpe Park scheme. Development director Mark Jackson says the company has learned plenty of lessons about what a modern mixed-use development should look like and how to work with partners to achieve it, not least in the struggling retail sector. “Business parks and out-of-town business space have traditionally suffered badly from not having decent facilities for retail and leisure,” Jackson says. “What we had with Thorpe Park was the opportunity, because of the location next to the M1, of using a traditional strategic retail out-of-town location dynamic, but making sure that it was integrated into the business space.” During the retail park’s development, the focus has changed to be on smaller units and fewer big covenants, Jackson said, a shift Scarborough has initiated alongside partner Legal & General. “We quickly embraced the change rather than fighting, so moving to a greater base of turnover rents, to looking at it as almost a town centre management job where you create the place and then enliven the place with regular events to drive turnover,” he says. And many of the people to enjoy those events could be right on the doorstep, in the new homes Scarborough has developed next to the business park. Jackson wants Thorpe Park to provide “everything that the people need for their lives”. “Putting new housing stock next to a growing business and retail and leisure location means that people can walk to work or it’s a short bus ride,” he says. “It just breaks down that commute. I think that people with a long commute are the ones who are really going to prefer working from home. So that blend makes sense. The scale we’ve got here means that you have the critical mass to create that .” He adds: “Rather than trying to knock down the city and reshape a city, we’re bringing a space to the edge of a city where there’s already a lot of people and a good strong infrastructure and building upon that. It started as a traditional business park and has morphed into this very forward looking, pioneering development.” To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews