Enterprise zones have become huge drivers of growth in cities around the country, with the low business rates incentives and growing supply of space for emerging and established companies boosting local economies. However, until recently speculative development builds remained relatively low even in these areas, as developers remain wary of investing in schemes which could prove loss making in the long term.
Fortunately, this has not been the case for the £5 million logistics and manufacturing development in the heart of Leeds City Region Enterprise Zone. The 80,000 sq ft scheme has already attracted the interest of a number of potential occupiers, despite the fact that it is not due to be completed until July this year.
Known as Connex 45, the two unit development lies in the Leeds Aire Valley and is currently under construction in a programme led by Wilton Developments. Work began last October when the developer was awarded a £670,000 grant by Leeds City Council under the Government’s “Building Foundations for Growth” fund.
Wilton Developments’ managing director Jason Stowe believes that the support of the local council has gone a long way in bringing the ambitious project to fruition.
He says; “You can’t under-estimate what the council has done.
“They have managed to kick start the process, that’s a key factor in getting the zone going.
“There’s a real doubt whether any of the developers who are now on site would have started without the council’s input.”
Before 2008, the number of speculative developments within key city centre and regional areas was high as developers were confident that the space created would be at least partially let by the time construction work completed.
However, the financial crisis and ensuing recession caused the number of speculative builds in progress to plummet – only a few developers, including Wilton Developments, chose to continue to invest in speculative projects.
Thanks to widespread economic recovery, it seems that the Connex 45 project will face little difficulty in obtaining tenants as developers have already begun to show the available space to groups of property agents keen to become involved in the lettings process. The developer is also confident that the interest shown by businesses in the logistics and manufacturing sectors will convert into deals as the completion date approaches, especially as the construction work remains on schedule.
Mr Stowe continues; “The council’s input helped, the underlying prospects helped, the lack of potential supply in Leeds helped – there was an opportunity here.
“We did other speculative developments through the recession but we hadn’t done any industrial buildings for a while.
“We have had very strong interest in both units and we are reasonably confident it won’t take too long to let them.”
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