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2 Embankment, Leeds The story of everything
2 Embankment in Leeds is the story of almost every issue that could possibly land on an office building…
This is a 36,000 sq.ft. office building next to Leeds railway station and is positioned with Riverside views. It was let for 25 years to a single occupier but on our appointment it presented as a relic from the early 1990’s. This is because most of its features were life end and needed replacing. It presented as dated with some of the space needing reconfiguring to modern office standards. The outgoing occupier had sublet parts of the building and had gifted the landlord with a historic landlord and tenant relationships, not all of them were good.
In 2019, HS2 in and out of Leeds wasn’t a real thing but a very strong idea the government wanted to roll out. It was a political hot cake and to many, still is. Many properties on the route had been safeguarded by HS2 but were not yet subject to CPO; so everyone affected by the scheme was soaked in additional risk. This unique scenario raised challenging questions including:
- Why would the landlord invest a penny in a building that was potentially going to be demolished?
- Do you simply mothball the building?
- How do you protect your CPO position?
- Will anyone take a lease on a safeguarded building at a market rent or will it be discounted?
- What is the discount?
- Will the void periods be prolonged?
- How could we protect the existing planning consent?
- What constituted a ‘material start to work’ and ‘under planning law’?
The short answer was, if you wanted the fullest CPO settlement then you had to act like the HS2 scheme wasn’t happening i.e. a no scheme world. In other words, you carry on as normal and pretend HS2 wasn’t a thing, but hope you could draw lettings from a market that was all too aware it was a thing and knew perfectly well it was going straight through the building. The settlement with HS2 would be based on the letting position at the time of CPO, so the decision was made to refurbish the building and price it to let.
The design was agreed. The spec was agreed. The cost was agreed. The planning consent was received. The ‘go’ button was pressed. Contractors were mobilised. Work started… then, a couple of months later the pandemic hit which delayed the refurbishment and threw in the air all the assumptions we’d poured over. Occupier habits changed. But we were committed to the scheme and pressed ahead. Lettings followed completion and the building has since touched 90% occupancy.
HS2 in Leeds was eventually cancelled so the client now has a solid office investment with some really good tenants and in a great location. The rents achieved were £5 sq.ft. ahead of what we initially assumed and the project has over achieved significantly. At the centre of all this was YOKE, pulling all the consultants together, feeding into the higher value calls and harnessing the value of this asset.
Property leaning social media is full of people posting about their part in a process. There are loads of pictures showing off shiny new roofs, flash office fit outs, snazzy reception areas and of course the marketing launch. Here in Leeds it was YOKE who created the vision, set up the process, managed it everyday, rode all the bumps in the road and drove everyone towards the finishing line. Arguably there is a case study on each of the topics below, but to complete this project and earn our right to post some snazzy pictures, the issues we’ve had to meet head on include:
- Dilapidations
- S.18
- Safeguarding & CPO
- Rental tones and letting
- Valuation – theoretical and real world
- Rating
- Service charge management
- M&E
- Refurbishment design, spec and tendering
- Value engineering
- Planning and CLUED
- BREEAM
- ESG
On longer projects like this there are inevitable staff changes. The current personnel count is:
- 6 client contacts
- 4 letting agents
- 3 CPO advisors
- 3 property managers
- 3 facilities managers
- 1 building surveyor
- 3 building managers
- 1 property lawyer
- 2 valuers
…and counting.
