Yorkshire building for future

YORKSHIRE Building Society has unveiled a £22m investment in its property estate which will see the Bradford-based lender open an 800-strong office in Leeds.
Chris PillingChris Pilling
Chris Pilling

Britain’s second biggest building society plans to consolidate its operational functions in Bradford and move its marketing, product development and finance departments to the neighbouring city.

The mutual will spend £11m refurbishing its “tired” and “overcrowded” head office site at Yorkshire Drive in Bradford and is investing between £5m-£6m on the 76,000 sq ft office at Broad Gate in Leeds.

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It has earmarked another £5m to spend on its office in Peterborough, which it gained following the 2011 merger with the Norwich and Peterborough Building Society.

Chief executive Chris Pilling said the Yorkshire needs to upgrade its facilities “to ensure a top-class competitive people experience and environment is a key part of that”.

He told the Yorkshire Post: “From a members’ perspective we need to grow. If we are going to grow, we need to make sure we have a modern, collaborative working environment.”

Building societies depend on achieving growth to offset the effect of inflation, which reduces the value of savers’ money.

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Mr Pilling said: “We are definitely a growth story in a flat environment. We need to have the infrastructure and property and working environment.”

The lender took on 200 new staff over the last year, excluding new branch openings.

Mr Pilling added: “The bottom line is we are lending. Others are not. Last year was a record lending year for us. We opened 334,000 savings accounts. Commercial lending grew by 82 per cent. Our buy-to-let business is growing. Current accounts have grown by 25 per cent.”

He said that Yorkshire Drive has become “very compromised” and warned that the mutual will struggle to attract and retain the best staff without investment at the site, which is 21 years old and now home to 1,250 people.

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The Yorkshire has three other sites in Bradford, which will be closed over the coming years with staff moving either to Broad Gate or Yorkshire.

The majority of the 800 jobs at Broad Gate will come from Bradford, said a spokeswoman, adding that staff numbers at Yorkshire Drive will reduce to 1,000.

Yorkshire Drive will continue to be the head office, although Mr Pilling said board meetings will take place across the business, including the new office in Leeds.

The spokeswoman added that the general management team will be spread across the two sites.

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Mr Pilling said: “As a group we’ve experienced substantial growth in recent years resulting in significant accommodation issues, particularly in relation to our offices in Bradford, which are now overcrowded and in need of refurbishment.

“While we have introduced measures to alleviate some of the immediate pressures by securing additional space in Bradford, this has resulted in fragmentation of our teams across multiple sites.”

Under Mr Pilling, the building society carried out research into its physical resource needs over the next five to 10 years.

He said: “Broad Gate offers excellent premises in the heart of a thriving city with good transport links and access to first-rate local facilities.

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“Splitting operations is standard across the industry and a presence in multiple cities spreads risk as an organisation and enhances recruitment opportunities.”

He highlighted the findings of the recent Edelman Trust Barometer which revealed that consumers are more likely to trust organisations which demonstrably look after their staff.

Mr Pilling added: “This announcement not only reaffirms our commitment to the region but to the sector as a whole.

“We are investing in our business, we are opening new branches on the high street, we are actively recruiting in the region, we are increasing our mortgage lending, we are committed to offering competitive savings rates and we have retained a face-to-face financial advice service.

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“Ultimately, we are making the most of our expanded capability to enhance our products and breadth of services for the benefit of all our members.”

Roddy Morrison, a director at Colliers who advised on the deal, said the office transaction is the largest in Leeds since 2004.

He said office take-up in central Leeds during the first half of 2013 has exceeded last year’s total.

Mr Morrison added that Leeds has seen the largest take-up of central office space than any of its rival cities: Bristol, Birmingham, Manchester, Edinburgh and Glasgow.

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“It will be the largest in the UK outside central London,” he said.

The deal also leaves Leeds with little remaining grade-A office space, added Mr Morrison. “It’s a big turnaround,” he said. “At the start of 2012 vacancy was above 20 per cent. Now it is seven per cent.”

Jet2.com, GDF Suez and KPMG are among firms to have committed to new office space in the city.

The shortage of space could trigger property development. Property developer and investor MEPC has started work on the first new office scheme in Leeds since the financial crisis after law firm Shulmans agreed to pre-let space.

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Several professional services firms are facing lease expiries on existing offices and must decide whether to refurbish old space or follow Shulmans and KPMG and kickstart new building work.

Caution over house market

THE chief executive of Britain’s second biggest building society is maintaining a cautious outlook on the housing market in spite of some positive movement in UK house prices.

Prices in Yorkshire and the Humber remained flat in May, despite the strongest increase in a single month nationally for six years, new figures showed this week.

Chris Pilling, of Yorkshire Building Society, said: “We are relatively cautious in our outlook. We are maintaining that outlook.

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“But our trading performance is strong. We are happy with the position we have got. We are definitely doing our bit.

“We are well funded. Other banks are still shrinking their balance sheets.”

Yorkshire Building Society has 230 branches, 96 agencies and assets of approximately £33.5bn.

It employs around 4,100 staff and has more than 3.5m members.

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The Yorkshire posted core operating profits of £137.2m in 2012, a 16 per cent fall on the £163.2m achieved in 2011.

Statutory pre-tax profits were boosted by a debt buyback, growing 21 per cent to £157.1m.

New mortgage lending increased 12 per cent to £4.6bn.