Nottingham City Council has signed an outline agreement with the Peel Group for a £70m scheme to build a new office and hotel complex. Almost half of the office floorspace would be taken over by the local authority.
The infrastructure, transport and real estate investment company said it was confident that due diligence and heads of terms (HOTS) would be swiftly ratified to allow construction work to start early in 2015. When complete the development, opposite Nottingham’s recently refurbished railway station, would include 50,000sq ft of office space and a 160-bedroom three- or four-star hotel.
“We are delighted to confirm very positive recent progress on bringing forward our Unity Square scheme in Nottingham,” said Peel Group’s Richard Mawdsley.
“These are still early days,” he continued, “but we are confident that outstanding matters can be put to bed very soon and a start made on this very exciting Grade A office development.”
Plans for the regeneration of Unity Square were first mooted almost a decade ago but collapsed when the recession hit. The site, adjacent to several listed buildings and two conservation areas, was then acquired by Peel Holdings which initially wanted to build a near-100,000sq ft office block on the land.
Knowing that the city council intends to occupy 25,000sq ft of Unity Square as overflow offices from its Loxley House headquarters was also a key factor in the agreement. “The kind of arrangement we have come to with Peel is not unusual and is similar to agreements other local authorities have entered into,” council leader, Jon Collins, explained. “It gives developers the confidence to proceed at a time when the economy is starting to improve and means there will be very high quality office space available as demand for it grows.
“This is a good deal for us on a number of levels. It will transform a gateway site which currently has a pretty ugly car park on it. Peel also has significant further landholdings alongside the railway line and I’m pretty confident further development will come.”
David Bishop is the authority’s corporate director of development. “We still have a need to bring some of our services out of tired, older properties and this represents a great opportunity to do that while also kick-starting an important development,” he said.
Mr Bishop added that the council would take a flexible approach to its involvement. “We have guaranteed that we will take half the space in the building, but if the demand emerges from a commercial occupier we could stand aside.”
There is currently a shortage of new, high quality office space in Nottingham. By the time Unity Square is completed it’s hoped a number of professional service companies will be considering relocating when their existing leases expire. “It is also vital that Nottingham is able to compete commercially with locations like Birmingham and this will give us an opportunity to do that,” said John Proctor, of commercial property agents Fisher Hargreaves Proctor.
