City liv­ing re­vival set to bring new boom in build­ing

De­vel­op­ers are show­ing in­ter­est in the Leeds city cen­tre apart­ment mar­ket once more. Sharon Dale re­ports on the ap­peal of city liv­ing.

Yorkshire Post - Property - - PROPERTY -

CRIT­ICS who forecast that the flats in Leeds city cen­tre would be­come “the slums of the fu­ture” and con­demned them as “rab­bit hutches in the sky” should be eat­ing their words right now.

The apart­ment mar­ket, which was born in the 90s and boomed in the noughties amid fears of over­sup­ply, is thriv­ing.

Young pro­fes­sion­als can’t get enough of the high rise homes and fight for the best prop­er­ties. Both owner oc­cu­piers and in­di­vid­ual buy to let in­vestors look­ing to in­vest their sav­ings, are ten­ta­tively re­turn­ing af­ter a long hia­tus when banks were loathe to give mort­gages on flats and con­fi­dence in them was low.

Now there are signs that de­vel­op­ers are coming back and they’re look­ing at both build­ing to sell and to let.

East Street Mills is a prime ex­am­ple. It was left half fin­ished when its Ir­ish own­ers were forced into liq­ui­da­tion af­ter the credit crunch hit in 2008. The re­ceivers hung on to the prop­erty un­til re­cently, reap­ing an in­come from a newly-built sec­tion of of­fices they were able to let.

When they put the mixed use site on the mar­ket last year, there was a sur­pris­ing amount of in­ter­est with Black­brook Val­ley, a Mid­lands based com­pany, win­ning the bid­ding.

The de­vel­oper has re­fur­bished the 19th cen­tury flax mill, cre­at­ing 136 stu­dios, one and two-bed­room apart­ments spread across four blocks and 80 of them are al­ready rented.

Guy Ack­ern­ley, of Jones Lang LaSalle’s res­i­den­tial team in Leeds, says: “There are a lot of signs that the mar­ket is coming back. Sales are im­prov­ing and the res­i­den­tial ren­tal mar­ket is phe­nom­e­nal. Our man­aged port­fo­lio is 98 per cent oc­cu­pied, which is in­cred­i­ble.

“Black­brook Val­ley bought East Street Mills on the back of a strong ren­tal mar­ket, good yields and the fact that Leeds has such a strong fi­nan­cial sec­tor.”

Although fund­ing for schemes is still scarce, cash rich de­vel­op­ers who have been sit­ting out the re­ces­sion are start­ing to ex­plore op­por­tu­ni­ties in the city.

“There are two sites in Leeds city cen­tre be­ing ac­tively con­sid­ered for new mixed use devel­op­ment and those apart­ments would be built to sell,” says Guy

“But I don’t think we’ll see any high den­sity res­i­den­tial schemes with 50-storey tow­ers like Lu­miere, which was planned but never built. They will be smaller, lower den­sity schemes.”

He also be­lieves that In­vest­ment Funds look­ing at build­ing to let in Lon­don and the South East will tar­get Leeds and other north­ern cities over the next 10 years.

Leeds looks set to be­come even more de­sir­able thanks to the open­ing of its long-awaited arena, which will stage acts in­clud­ing Bruce Spring­steen and El­ton John this year.

The newly-opened Trin­ity Leeds shop­ping cen­tre is an­other at­trac­tion for ur­ban dwellers.

Jonathan Mor­gan, of city liv­ing spe­cial­ists Mor­gans, says: “Af­ter a long and fal­low pe­riod for city cen­tre res­i­den­tial ac­tiv­ity, there are sure signs that res­i­den­tial de­vel­op­ers are be­gin­ning to look once more at city cen­tre sites. I have had more dis­cus­sions of this na­ture in the past six months than I have in the last three years com­bined.

“Early movers are likely to be fo­cused on a ren­tal model as has been ev­i­denced at Crispin Lofts, where take-up has been out­stand­ing-and this ob­vi­ously re­quires a longer term ap­proach and deeper pock­ets.

“It is un­likely that we will see any spec­u­la­tive res­i­den­tial devel­op­ment in the city cen­tre this year but it seems likely that when sen­ti­ments shift and the mar­ket starts to come back, that it will do so very quickly.”

He adds: “Our city cen­tre sales ac­tiv­ity is up around 80 per cent on this time last year and our per­for­mance in Au­gust 2012 was the best we have seen for five years, on the ba­sis of sales agreed.

“Put this into the con­text of the acute hous­ing short­fall and it doesn’t take a great leap of faith to fore­see some mod­est new spec­u­la­tive build in the next 18 months and in­deed we are ad­vis­ing clients on two new schemes which, if all goes well, could be on site next year.”

He be­lieves few of the high pro­file, high den­sity schemes pro­posed be­fore the credit crunch will be de­liv­ered, not least be­cause buy­ers want big­ger and bet­ter flats.

Gra­nary Wharf is the new bench­mark. The scheme, built and sold through­out the re­ces­sion, has been a huge success with owner oc­cu­piers and ten­ants alike.

Its lo­ca­tion helps. It is next to the canal and the rail­way sta­tion., but de­vel­op­ers ISIS also put more thought into the de­sign both in­side and out learn­ing from mis­takes made dur­ing the boom years,

Apart­ments there com­mand a pre­mium. Whereas the av­er­age one bed­room flat in cen­tral Leeds starts from £500 per month, at Gra­nary Wharf they are fetch­ing £700.

Guy Ack­ern­ley says: “Gra­nary Wharf proves that if the lo­ca­tion, the qual­ity and the price are right then apart­ments will sell well and let at a pre­mium.”

For de­tails of flats and com­mer­cial space to let at East Street Mills, con­tact Jones Lang La Salle , tel: 0113 244 6440.

COUN­TRY­SIDE IDYLL: Hard­wick House Farm is in need of ren­o­va­tion but sits in a splen­did lo­ca­tion. The orig­i­nal brochure from 1961 shows a Mor­ris Mi­nor parked out­side, but own­ers may be wary of us­ing a mod­ern car on the track lead­ing to the site if it is not a 4x4.

EN­DUR­ING AP­PEAL: East Street Mills, which has been bought and re­fur­bished by de­vel­op­ers who stuck with it through the down­turn.

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