City liv­ing rises from the ashes of poor schemes

What is next for city liv­ing in Leeds? Jonathan Mor­gan has some sur­pris­ing an­swers.

Yorkshire Post - Property - - PROPERTY -

WHEN in­vestors were climb­ing over each other to re­serve as yet un-built apart­ments in Leeds City Cen­tre, it seemed in­con­ceiv­able that the boom would ever end. Ac­cord­ing to the City Liv­ing Re­port of 2007, the pipe­line of new apart­ments was al­most 10,000, which would have dou­bled the to­tal stock lev­els – the 2010 re­port con­cluded that just 500 new apart­ments would be com­pleted by 2015 and this may yet prove to be an am­bi­tious pre­dic­tion.

Many of the schemes which were in the pipe­line have been sim­ply left be­hind by mar­ket con­di­tions which are al­most un­recog­nis­able in com­par­i­son to those which pre­vailed through the noughties.

Dozens of pro­posed schemes have fallen by the way­side – a few were un­lucky and were caught out by sav­age mar­ket con­di­tions but most were des­tined to fail.

Lu­miere, once dubbed “the tallest res­i­den­tial tower in Europe” was an am­bi­tious project – very few ar­chi­tects and engi­neers have ex­pe­ri­ence of build­ing such struc­tures, the con­struc­tion is hugely com­plex, and no fun­der is go­ing to sup­port a scheme with­out sig­nif­i­cant for­ward sales.

It was no sur­prise, then, that the scheme stalled and ul­ti­mately failed, and it will be even less of a sur­prise if the 10-year-old plan for a 13/14 storey scheme to de­liver a ho­tel and of­fices comes to fruition. What goes around comes around!

Green Bank is an­other ex­am­ple of a scheme whose success rested en­tirely on the buy-to-let mar­ket. Sit­ting on the ex­treme western edge of the city cen­tre and sand­wiched be­tween the busy Globe Road and the main rail­way lines, it was never any­thing more than a very good mar­ket­ing cam­paign.

It was heav­ily pro­moted in Lon­don where in­vestors were told of its “heart of the city” lo­ca­tion and no end of high qual­ity im­agery pro­jected a scheme in iso­la­tion of its more than chal­leng­ing en­vi­rons. This was a great ex­am­ple of mind over mat­ter for the du­ra­tion of the cam­paign which in­cluded an ex­trav­a­gant mar­ket­ing suite which iron­i­cally did more to draw at­ten­tion to the na­ture of the lo­ca­tion than it did to pro­mote the at­trac­tions of liv­ing there.

Ul­ti­mately, what had been a surface car park is once more a surface car park and it is go­ing to take some rad­i­cal think­ing and a sea-change in the mar­ket for Green Bank to see green shoots.

Bridge House, di­rectly across the road from the York­shire Post build­ing, en­cap­su­lates what went wrong – this is a sec­ondary lo­ca­tion sur­rounded by a harsh road net­work. There is no amenity, no shops or green space and no sense of com­mu­nity – it is sur­rounded by a mish-mash of low grade build­ings, poorly oc­cu­pied of­fices and lit­tle else.

And yet, it was to be de­vel­oped ini­tially as a 17-storey glass tower of apart­ments and lat­terly as a ho­tel.

At the heart of the story it is the de­gree to which peo­ple’s com­mon sense was swayed – we were asked by a bank to look at the pro­posed scheme and to run our eye over the val­ues which had been pro­duced for the de­vel­oper by a local agent. It took us two min­utes to work out that the rents didn’t make sense. Fig­ures like £757.39 kept ap­pear­ing in the monthly rent col­umn and it took us a fur­ther minute to work out that the rents had been cal­cu­lated by a for­mula to en­sure that they rep­re­sented 125 per cent of the cost of a 75 per cent mort­gage.

How­ever, the de­vel­oper didn’t care and it seemed to pass the bank by com­pletely.

Need­less to say, the scheme has never been built.

But, with ren­tals de­mand ap­prox­i­mately 20 per cent higher than it was at the height of the sales boom, and signs of an in­crease in sales ac­tiv­ity, city liv­ing is in great shape.

Oc­cu­pancy lev­els are at record highs which means that there is coun­cil-tax pay­ing pop­u­la­tion of around 14,000 – they shop, they eat and they drink.

And what of the fu­ture? Bri­tain is highly un­likely to be­come a na­tion of renters but it seems cer­tain that we are likely to rent for longer than we have tra­di­tion­ally done and so there will be more de­mand than sup­ply – we are al­ready see­ing the ev­i­dence of this.

The pri­vate rented sec­tor is the sub­ject of much de­bate and in the South-East at least ma­jor in­sti­tu­tions are turn­ing their at­ten­tions to the op­por­tu­ni­ties. This trend is un­likely to fil­ter through to the prov­inces in our view and it will be left to the pri­vate sec­tor to fill the void.

Rush­bonds’ re­cent pur­chase of Crispin House, is tes­ta­ment to a chang­ing mar­ket – 82 fully fur­nished loft style apart­ments with a res­i­dents’ gym, concierge and se­cure park­ing, de­vel­oped specif­i­cally for the rental mar­ket. As the sales mar­ket re­cov­ers, the ren­tals mar­ket will lose stock and it is schemes such as Crispin Lofts which will help en­sure that the city cen­tre has the hous­ing of­fer to sup­port pre­dicted eco­nomic growth.

It’s a brave new world.

SCENE OF CHANGE: Crispin House is the kind of scheme which will en­sure Leeds city cen­tre has hous­ing avail­able to sup­port eco­nomic growth.

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