Developer Scarborough International Properties is testing the strength of the out-of-town rental market after unveiling its first speculative office building since the height of the financial crisis.
The company, led by founder and chairman Kevin McCabe, has built a 31,650 sq ft ‘headquarters’ office building which sits prominently at the gateway to Thorpe Park Leeds overlooking the M1 at Junction 46.
It is the first of a total 940,000 sq ft of new business space planned at the business park where planning consent is secured for a further 1.35 million sq ft of office, leisure and retail development.
Plans include a 300,000 sq ft shopping and leisure park with cinema, 300 new homes, further leisure and hotel space and 140 acres of parkland and sports facilities.
Mr McCabe said the building was a prototype to show companies what else could be built within the second phase of the business park.
Delivery of the next phase follows a £162m investment by Legal & General Capital as joint development partner last year.
Gordon Aitchison, director of investment and development at Legal and General Investment Management Real Assets, said: “One of the things that has held back business park development is that the rents are low and there is no money to upgrade and add new amenities. To have all that on your doorstep is unique.”
Mr McCabe said the office, known as Paradigm, will set a new benchmark for rents away from the city centre. Thorpe Park is also targeting upmarket brands and has already signed up a number of names, some new to the north of England, which will be announced over the next few weeks.
He added: “I don’t think you can find direct competition to what we’re doing here on a community business park in the Leeds area. We’re in an unusual position here of being way in advance of anyone who wants to do anything similar.”
Earlier this week, Leeds City Council, which remained supportive of Thorpe Park during the recession as Scarborough International looked to revive the site, confirmed that a new railway station would be built at the site, providing an integral part of the infrastructure that will connect the business park to Leeds city centre.
“As a developer or an investor, the new train station will make Thorpe Park ever more appealing and ever more valuable,” said Mr McCabe.
Mr McCabe said that Brexit has not had an impact on occupier demand and that the Northern Powerhouse brand is gaining traction in the Far East with investors keen to put their money in places like Leeds and Sheffield.
“I travel quite a bit to the Far East and the northern powerhouse branding seems to have struck home,” he said.
“The Government last year inviting president Xi Jinping to Manchester and the availability of flights has spread the word that the northern powerhouse is the place to be.
“Because investors can get round Manchester, Leeds and Sheffield in one day, they can see it on a map and it is appealing.”
The north of England is also benefiting from investors who are shying away from uncertainty in Scotland, he said.
“Politically, because Scotland is still threatening not to be part of the UK, it is starving itself of investment,” he added.
“There is less for the institutional investors to look at because they’ve crossed Scotland off the map for the moment.”