Sladen Estates and Peveril Securities are understood to be considering speculatively developing the 170,000 sq ft first phase of Nottingham’s 460,000 sq ft Unity Square scheme to take advantage of the dearth of office space in the city.
The duo, which purchased the site from the Peel Group in June, is to submit a reserved matters planning application for the scheme next month.
Sladen approached Peel, and Peel felt it was an offer too good to refuse an offer for what observers say was a time-consuming project peripheral to Peel’s main interests. The site has been slated for development since Peel Holdings acquired the freehold in the late 1980s.
The sale price is the best-kept secret in Nottingham. Estimates vary from just under £10m down to £2m-£3m.
With headline rents in the city at less than £20 per sq ft, and the bulk of the market closer to £17.50 per sq ft, some market observers argue that spec development could be a little too far ahead of the curve.
However, Sladen’s adviser says the developer’s answer to the would-you, wouldn’t-you question is a surprising: “Yes, maybe, and soon.”
Assuming planners approve the reserved matters application and allow the four-tower courtyard proposal by Peel to become a more outward-facing, three-tower scheme, Sladen and Peveril will demolish the existing Sovereign House and start clearing the site early next year.
Will there be a speculative start on offices? John Procter, director at Nottingham agent FHP and an adviser to Sladen, makes encouraging noises about the prospects for a 170,000 sq ft first phase, including a 60,000 sq ft hotel.
“Yes, there’s a chance they could do some of the first phase speculatively,” he says, “if they get a prelet on some of the office space.” He adds: “They don’t need third-party finance – they can do it from their own resources in the first instance. So they could do two buildings in the first phase, including the hotel.
“We have decent discussions going with potential occupiers and we’d need something to come out of those to kickstart the scheme for summer 2016.”
Meanwhile, in Leicester, the city council and elected mayor Sir Peter Soulsby have been the driving force behind the transformation of the 1.8-acre former New Walk offices site.
Following its relocation to new offices on Charles Street, the local authority chose local firm Ingleby – a joint venture between Sowden Group and William Davis – as the preferred developer for its former site. A mixed-use scheme, including 50,000 sq ft of grade-A offices, flats, leisure uses, underground car parking and new public realm, was drawn up.
Then, this summer, before the scheme had been granted planning consent, a single tenant agreed to take all of the office space. Shortly after financial services firm Mattioli Woods agreed to move to the development, now known as New Walk Centre, as an owner-occupier, councillors gave the scheme planning consent. Ingleby hopes to be on site by the end of this year and have the majority of the new buildings completed early in 2017.
One thing is for sure: the rapid progress of New Walk was no accident. Direction came from Sir Peter Soulsby. “The mayor’s approach was clear and strategic – to get jobs into the city centre. And having an elected mayor meant decisions were able to be made quickly,” says the council’s head of inward investment Helen Donnellan.
Leicester council has now agreed to transfer the freehold of the site to Ingleby for an undisclosed sum and local sources suggest that the figure achieved will not even cover site clearance costs.
Ingleby has subsequently passed on the freehold of the offices to Mattioli Woods for £14.6m. A 54-flat residential block that forms part of the development is likely to have a gross sales value of £30m.
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