Bruntwood aiming to breathe new life into iconic city building

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DEVELOPER Bruntwood could be on the brink of snapping up two sites in Yorkshire, after the company delivered “solid” results during a year of economic upheaval.

Bruntwood believes Leeds could benefit from the movement of business to regional cities, because London is becoming too expensive for many companies.

Bruntwood also plans to breathe life into one of Yorkshire’s best known office blocks.

Bruntwood hopes to have City House, which is next to Leeds railway station, ready for occupation next year.

City House was bought by Bruntwood in July 2010 and the company hopes major employers, potentially in the legal or professional services sectors, will decide to make it their home.

Craig Burrow, the director of Leeds for Bruntwood, said: “Leeds is very much a growth city. We are considering a couple of acquisitions in Leeds city centre.”

Last year, Bruntwood obtained planning permission to redevelop City House, which dates from 1962 and has been empty for six years.

Mr Burrow confirmed that Bruntwood was in talks with a number of potential occupiers and is working with Network Rail to make the station entrance more attractive.

Mr Burrow said: “It makes absolute sense to work together to try and improve that whole side of the station rather than refurbish it in isolation. We are working hard with Network Rail and have the full support of the local authority.

“It (City House) is extremely well located and it will take a significant investment to bring it back to life.”

Mr Burrow believes next year will mark a milestone in the city’s development, because the Leeds Arena and the £350m Trinity Leeds development are due for completion.

In the financial year ending September 2011, Bruntwood recorded turnover of £99m, which is slightly lower than the £100.2m recorded the year before.

The pre-tax profit rose one per cent to £11.2m, while the total value of the company’s fixed assets increased by two per cent to £966m.

In a report to accompany the accounts, chief executive Chris Oglesby said: “Our results would imply a relatively flat market, but this has been far from the case.

“For the first six months of our financial year, fear of a double dip appeared to paralyse the lettings market, and although we had many active negotiations, it was very difficult to close them down.

“By March, although it was clear that the economy was far from out of the woods, another recession looked unlikely and we enjoyed an incredible run of lettings as the backlog cleared, so that by summer we had caught up.

“The result of the ‘stop start’ year, was that we agreed four months worth of lettings in the first eight months of the year, and eight months worth in the last four months. Unfortunately, it would appear that as a result of the euro crisis, confidence is starting to ebb away and while at the time of writing (December 16, 2011) we are still to see a reduction in letting interest, deals are taking much longer to complete.”

Mr Oglesby said the company’s sales team had secured a number of significant forward lettings – including 45,000 sq ft to Whitbread at Hepworth Point in L eeds, which is due to complete this year.

Mr Oglesby added: “We remain confident about the prospects for growth in our four regional cities, despite reports of the overall gloomy outlook for the wider regional UK. As London becomes more expensive, there is significant evidence of the ‘northshoring’ of business to the regional cities... The regional cities continue to be more international in their outlook and are successfully winning inward investment from abroad as well as seeing UK business increasingly exporting its knowledge and service economy, as well as its manufacturing. Even if the economy dips back into mild recession, we expect the letting markets in our four regional cities to pick up again towards the end of the first quarter of 2012, as there are many businesses that are trading well with good balance sheets that need to move.”

Mr Oglesby said this forecast was dependent upon there being no catastrophe in Europe, which would put everything on hold. During the last financial year, £27m was invested in the company’s portfolio, through activity including capital development and suite refurbishment. Mr Oglesby added: “While we are working on the basis of the economy being flat and unpredictable for some time to come, we continue to roll up our sleeves and make the most of the opportunities that it presents.”

greg.wright@ypn.co.uk

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