New Offices Vital for Durham

Durham City’s economy could miss out on significant investment and job numbers unless it creates new office in the next 12 to 18 months, a leading property firm claims.

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Newcastle-based real estate firm Cushman & Wakefield says in the first half of the year it firms were on the hunt for 730,000 sq ft of office space across the North East, which could have considered Durham, with an average enquiry size of 40,000 sq ft. That equates to around 6,700 jobs, a large chunk of which could be attracted to Durham.

The office space enquiries – which came from both the public and private sector – also doubled within six months, and in the second half of 2017 enquiries tallied up to 330,000 sq ft with occupiers seeking an average of 20,000 sq ft.

The organisations seeking space needed between 20,000sqft and 120,000 sq ft – but Durham City had to be discounted as it has no office space available to meet those requirements.

Newcastle, Middlesbrough and Darlington, meanwhile, have all increased commercial property development in recent years.

Greg Davison, partner at Cushman & Wakefield, said: “Durham’s global reputation as a City of significant heritage and home to one of the UK’s most highly-regarded universities, is undoubted and yet, commercially at least, it has not had the infrastructure to build on that reputation.

“There have been a number of examples recently where occupiers have set out to seek office premises across the UK, but they will only focus on those cities that can demonstrate an available pipeline of suitable stock.

“In most cases, they are looking on a 12-month time horizon. We have one live example at present, where the decision to locate in the region will, to a degree, be dependent on the availability of office space.

“Put simply, Durham cannot compete to attract businesses such as this to the city on the timescale they require. Given that office development tends to take 18 to 24 months to deliver, without speculative development of appropriate scale, any city without an established pipeline is going to be at a disadvantage from the word go.”

Several schemes are progressing – including the proposed development of Aykley Heads and neighbouring sites, The Fram Well adjacent to the railway station, and Milburngate on the banks of the River Wear – showing Durham developers are looking to address the scarcity of grade A space.

Aykley Heads is aiming to create provision for around 6,000 new jobs, but as it is still in the very early stages of planning and development it can’t meet the immediate requirements of potential occupiers looking to locate in Durham.

Milburngate has the potential to bridge the gap in the short term, with developers Arlington altering plans to create extra office space as part of the first phase of the £160m mixed-use development.

Subject to planning, these offices, as part of the first phase, will begin construction early next year for completion at the start of 2021.

The Riverside, meanwhile, has helped retain more than 1,000 jobs in the city at Freemans Reach, while the county council has also selected it as its preferred option for its new County Hall.

Mr Davison added: “Durham County Council’s ambitious plans for Aykley Heads will bring significant benefits, but the immediacy of the enquires requires a ready supply of office stock with a critical mass to meet occupier needs.

“To turn this situation around the city needs developments that can meet the shortfall. There are some positives on the near horizon with developments such as Milburngate, which is at the very core of the city and where occupiers want to be, helping Durham again compete on a national and global stage in attracting inward investment in the form of new businesses.”

Allan Cook, managing director at Arlington Real Estate, part of the JV developing Milburngate with the Richardson family, said: “As developers we know there is strong interest from the market for high quality offices in Durham City and as a result have evolved our plans for Milburngate accordingly.

“Attracting and retaining jobs is an essential part of building Durham City’s economic prospects and Milburngate will be a catalyst to attracting regional and national occupiers to the area.

“The city has fantastic potential to benefit from its strong global brand and reputation by delivering the right blend of offices, homes and leisure developments which, within a beautiful world heritage setting, positions it well against its peers not only in the North of England but also across the UK and Europe.”