A new type of city centre office is to be constructed by the Council to satisfy an unmet demand for growing businesses with the first earmarked for Sadler Gate area of the city.
The new model for supplying larger office spaces in the city centre is a key regeneration aim of the Council in 2018 and follows from the previous and successful Connect Derby model which provides managed office spaces for start-up businesses.
Soft market testing has shown that there is a demand for larger office spaces (between 5,000 ft2 to 10,000 ft2 /464 m2 to 929 m2) in the city centre which the private sector has been unable to provide so far.
The findings also show that (a) there is a lack of Grade A office space in the city centre, (b) that new 15 year leases sought by developers and their funders were unaffordable to growing businesses and (c) that companies could not wait for 18-24 months for new offices to be built for them which meant they would take their business elsewhere.
Grade A offices are the most prestigious buildings competing for premier office users. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
The report also reveals that one of the main reasons for this market failure is that there is not sufficient return on investment for the market to deliver. Therefore the Council has pledged to fill the gap.
The pilot site for the new model is 6 Bold Lane, Sadler Gate next-door to Sadler Bridge Studios. The new £6.39 million four-storey office block will lease entire floors to larger businesses for their own management and configuration and is expected to generate as many as 200 new city centre jobs when completed. It will generate income and over-time will be self-sustaining.
Deputy Leader and Cabinet Member for Regeneration and the Economy, Cllr Martin Rawson, said:
“The Connect Derby brand has been successful in helping to grow smaller businesses but there is a need for larger office spaces. This new model of office development is the next step for helping smaller business to grow, develop and generate more jobs and to improve developer confidence.
“We have heard the cry from the market and the Labour-led Council is intervening to meet the demand. In the same way that we provided the stimulus to boost city centre living, I am hopeful that we will do the same in the office market. The Council is already in discussion with a number of interested businesses and they are excited at the prospects.”
Until now the Council has provided smaller managed workspaces at seven locations across the city managed by Connect Derby. These were created to encourage the growth of micro businesses, entrepreneurs and Small and medium-sized enterprises.
This location will reinforce Sadler Gate as a prime office location, bring a brownfield site back into use and support the wider regeneration of the area, in line with the Derby City Centre Masterplan.
If approved, construction is expected to start in autumn 2018 and completed in 2019/2020.
At their February meeting, Cabinet will be asked to approve expenditure and include the project in the regeneration capital programme.