EG Leeds Question Time: Conversation turns to the Yorkshire Mafia. Drinks in hand at EG Leeds Question Time, an architect, a regeneration consultant and an engineer are discussing not a criminal organisation, but a Leeds-based business network where newcomers are vetted to prove they “reflect Yorkshire’s pride, energy, drive and refusal to be beaten by adversity”.
It is a 20,000-member organisation with the stated aim of plugging the gap caused by the decline of government business support networks. The engineer says he is put off joining by the application process and apparent exclusivity of the network.
The ‘Mafia’ tag may be a little unfortunate, but it could also be argued that such organisations can at least boast of strong leadership and an ability to get things done.
And more of the latter is what many in the property industry would like to see in the city region. A poll of the Question Time audience at Leeds’s Everyman Cinema found 56% of the audience thought not having a mayor was a major disadvantage for the region. Some 89% of the audience said they would rather have a businessman than a politician as a mayor.
“It’s not all about policy, this is about achievement,” says David Aspin, founder of property development and investment company Munroe K. To achieve its economic ambitions, a mayor is “absolutely” necessary, he believes.
After six metro mayors were elected around the country on May 5, a leadership gap appeared in West Yorkshire. Does it matter?
“We are behind the curve and I think that does affect investor confidence,” says Leeds Chamber of Commerce president Gerald Jennings.
Paul Fairhurst, head of Savills’ Leeds office, says: “I think having a mayor is a very positive thing for the city. From what I understand, if we don’t get a mayor, then we are in danger of losing out from funding from central government.” Areas with devolution deals will receive new powers and additional funding. The first allocations to the North of England from a £1bn local growth fund settlement in January clearly favoured areas with advanced or agreed devolution deals. This matters because the fund is used to unlock major infrastructure, housing and commercial development projects with new allocations included for town centre regeneration.
However, not all investors will be put off by the area missing a metro mayor. Speaking to EG prior to the event, Bill Hughes, head of real assets, Legal & General Investment Management, says: “Devolution deals are not a pre-requisite for locations being appealing to investors, and it is even conceivable that poorly executed devolution deals will adversely affect the prospects for a location.
“In the case of Leeds, we believe this is a city whose future is bright, and where there is every chance for its true potential to be unleashed, with or without a devolution deal.” Shoosmiths real estate partner Richard Outhwaite said the law firm committed to its Leeds office for three key reasons: client demand, a vibrant market and building up the Northern Powerhouse network. Earlier this month Burberry announced it was moving 300 jobs from London to Leeds. Roger Marsh, chair of the Leeds City Region Enterprise Partnership, says the fashion company’s ambitions in the regions are “much bigger…and that’s quite a game changer for us.”
Without a mayor, Leeds needs to rethink a tendency to talk itself down, and shout about all the opportunities. “We really need to get up and start shouting about what we do and what we can do,” says Jennings. “And everyone has that responsibility.”
Why no devolution for the Dales?
Why doesn’t the region have a devo deal? An early deal for West Yorkshire was announced by the then chancellor George Osborne in 2015. However, local politicians failed to agree on a devolution structure which would allow a deal with central government to progress.
“Some of our politicians have whispered in the ear of Westminster ministers in a not very helpful way,” says Jennings. “And if we hadn’t had that going on I think we would have had a West Yorkshire devolution deal.” After a Sheffield city region deal was put on hold over this year due to concerns there hadn’t been enough consultation, there is now an ongoing debate about whether there should be a pan-Yorkshire devolution deal. However, it is feared that with Brexit in play, new devolution deals have fallen down the government’s agenda.
Meeting the speculative challenge
What is the biggest challenge facing Leeds’s office market at the moment? Take-up in 2016 was down 20% on the previous year, although 2017 looks set to be boosted by a circa 380,000 sq ft commitment by the government property agency for a new civil service hub at MEPC, Hermes Investment Management and Canada Pension Plan Investment Board’s Wellington Place campus.
Paul Fairhurst, head of offices at Savills Leeds, says: “I think the biggest challenge is getting speculative development going again. Leeds had 600,000 sq ft of office space come to the market last year. Of that, 54% was pre-let. We now find ourselves in a position where we’ve only got 150,000 sq ft of office accommodation available of brand new grade-A stock.
“And there are some bigger requirements in the market. We are looking to the GPU signing up HMRC and the NHS at one of the big sites in the centre of Leeds very soon which will bring 4,500 jobs. So we will need more stock. We are going in to a refurbishment market, and after that there will be a pre-let, unless we can persuade people to look at speculative development.”
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