£400m Kirkstall Forge development secures two major pre-let deals
Independent leasing, fleet management and vehicle outsourcing business Zenith has signed a pre-let deal to become the first company to occupy a new flagship headquarter office building at Kirkstall Forge in Leeds.
Developer CEG has also announced it will relocate its northern office to the £400m development.
CEG is running the development of the 57 acre Kirkstall Forge scheme which is set to become home to a mixed-use community in a wooded, riverside setting. Ultimately, the scheme will comprise of 1,050 new homes, 300,000 sq ft of offices and 100,000 sq ft of retail, leisure and community space.
These two key deals have been signed this week, at the same time as the principal contractor Wates breaks ground to deliver the first phase; an 110,000 ft², seven-storey Grade A office building, which will be ready for occupation in the third quarter of 2017.
Zenith will take more than 45,000 sq ft net over the three upper floors, including a roof level meeting room suite.
Tim Buchan, chief executive officer from Zenith, said: “The Forge is another milestone in Zenith’s history and its location presents an opportunity to draw on the highly talented resources from within the North of England and establish a best-in-class headquarters for our future growth and innovation.”
CEG will occupy almost 10,000 sq ft on the ground floor, with the balance of the ground floor and three remaining floors of circa 18,500 sq ft each are to be made available to the market.
Jon Kenny, director of CEG, commented: “It is momentous to have secured a pre-let on this brand new speculative development. Securing two tenants and delivering key infrastructure, including the first new railway station in Leeds for decades, prior to starting development is testament to the strength of the Leeds market and this site.
“Kirkstall Forge is unique, it will deliver fresh, sustainable new ways of living and working amongst acres of green space in a wooded riverside setting. With schools, contemporary housing, restaurants, cafés and light-filled offices, it will provide the vibrancy of city life as well as the tranquillity of the outdoors.
“Ultimately, this will not only be an ambitious and innovative development for Leeds, but will establish a new benchmark for office developments across the rest of the UK.”
Lloyds Bank will provide the bank funding to enable the delivery of this first £40m office development.
Gabrielle Berring, head of major private groups, commercial real estate, Lloyds Bank, said: “We are very excited to be supporting a long-standing client in the first stage of a project that we hope will be a landmark development for the city. We are committed to supporting transactions like this which help to fuel economic growth in key centres such as Leeds through new jobs and regeneration.”
The regeneration of this key brownfield site has been fully supported by Leeds City Council, which approved an innovative loan arrangement to enable the early delivery of a new railway station, access road and car park in 2014.
This has enabled key infrastructure to be delivered in advance of development, including Kirkstall Forge railway station which opens next month, connecting the site to Leeds City Centre in six minutes.
Leader of Leeds City Council Councillor Judith Blake said: “We are delighted that these first deals have been announced for the Kirkstall Forge development, bringing major investment into the local and wider city economy of Leeds. Together with the new rail station due to open shortly, Kirkstall Forge will deliver significant benefits in terms of more than a thousand new homes, more than 2,000 new jobs, training opportunities and apprenticeships as well as new retail, leisure and community facilities.
“This scheme is a great example of the way the public and private sectors can work together using innovative new ideas to regenerate brownfield sites into places which will attract people to live, work and visit, so we very much look forward to seeing the development progress.”
The Kirkstall Forge scheme will create approximately 2,400 new jobs in the office space, leisure and retail facilities, and enabling almost 10,000 people to live and work on this site once complete.
The development helps to lever in £400m of private sector investment and once complete will generate £40m in annual office worker income and an estimated £5m per year in local retail spend. The detailed planning application for the first phases of residential development will be submitted in summer 2016.
Principal contractor Wates will be responsible for delivering CEG and Leeds City Council’s vocational training programme on site. This will enable teenagers as young as 14 having the opportunity to work alongside developers, builders, architects and engineers within the Kirkstall Forge Skills Village, leading to apprenticeship opportunities once they leave school at 16.
Paul Dodsworth, business unit director, Wates Construction North East and Yorkshire, commented: “The Wates team is currently making preparations to commence construction of the first phase of Kirkstall Forge, which once underway will bring to site one of the region’s most ambitious and exciting regeneration schemes.
“Since being appointed as main contractor, Wates has been working closely with CEG to develop an innovative Skills Village to invest in and train the future workforce. This commitment, alongside the announcement of the new tenant at Kirkstall Forge, is evidence of the success that this exceptional project is set to achieve.”
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