Two major pre-let deals secured at Kirkstall Forge
15 Mar 2016
Zenith, the UK’s leading independent leasing, fleet management and vehicle outsourcing business, has signed a significant 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 prestigious development.
CEG is running the development of the 57 acre Kirkstall Forge scheme which is set to become home to a thriving mixed-use community in a unique wooded, riverside setting. Ultimately it 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 principle 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.
The building received unanimous planning approval from Leeds City Council last year, with members commending the design of this exemplar development and the overall vision for the site.
Zenith will take more than 45,000 sq ft net over the three upper floors, including a spectacular 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 has announced it 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, said: “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, prestigious circa £40 million 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. This has undoubtedly acted as a catalyst for extensive employment and residential opportunities and securing a pre-let reinforces Leeds City Council’s confidence in this location and the development.
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.”
Ultimately 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. It will bring economic revival to a site with an 800 year history as the oldest continuously industrialised site in the UK.
The development helps to lever in £400million of private sector investment and once complete will generate £40million in annual office worker income and an estimated £5million per year in local retail spend. The detailed planning application for the first phases of residential development will be submitted in summer 2016.
Roger Marsh OBE Chair of Leeds City Region Enterprise Partnership commented: “Kirkstall Forge is one of many exciting opportunities that are currently being delivered across Leeds City Region and I’m delighted that the first two tenants have been secured for the site that is truly the antithesis of smart regeneration.
“In its heyday, Kirkstall Forge employed hundreds of people and once CEG has completed works on the site it will be somewhere that more than 10,000 people live and work. The high quality office space that is being designed, coupled with the high end landscaping that will seamlessly incorporate the new developments into the beautiful natural landscape, offer a real unique proposition for businesses looking to locate in the City Region.”
Principal contractor Wates will be responsible for delivering CEG and Leeds City Council’s innovative 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."
Paul Fox of Fox Lloyd Jones who put the pre-let transaction together commented: “This deal heralds a change in market appetite for top quality city centre specification buildings which are now being sought after outside the traditional city centre, providing they are both accessible and have amenities for staff.
“We have recently seen a very clear trend whereby discerning occupiers have pursued a ‘flight to quality’ and are demanding world class HQ buildings in unique and sustainable surroundings such as Kirkstall Forge.
“The accessibility and amenity on offer, in addition to an incredible environment at Kirkstall Forge is a world away from traditional Leeds out of town office schemes, and this has created a ‘game changing’ opportunity which will offer regional appeal.
“The exciting story of Kirkstall Forge is only just beginning to unfold and we are delighted to have been a part of the first transformational deal.”