Cabinet Office confirms giant Leeds letting

By James Buckley - Wednesday, September 06, 2017 12:51

The Cabinet Office has confirmed that HMRC will take 378,000 sq ft at Hermes Investment Management and Canada Pension Plan Investment Board's 7 & 8 Wellington Place as its new Government hub in Leeds, as first revealed by CoStar News.

CoStar News revealed yesterday that the deal was due to be announced today and revealed in March that the GPU had picked Wellington Place as its preferred option.

HMRC will take a 25-year lease with breaks at 20 and 23 year sin what will be the biggest commercial property letting in Leeds.

The deal will see 6,000 civil servants working in new city centre premises in 2020.  

Developer and asset manager MEPC is developing the site at Wellington Place on behalf of the JV. This in addition to Wellington Place’s other occupiers, including Willis Towers Watson, Squire Patton Boggs, Shulmans LLP and Sky Betting & Gaming, will grow the community to almost 10,000 employees – one of the largest in the region.

Government hubs will transform central government’s offices by accommodating many different departments in shared buildings in London and in the regions. The programme will deliver taxpayer savings, act as a catalyst for regional growth and ensure the delivery of the best quality services to the public.

There will be 18-22 strategic hubs across the UK, located in major towns and cities and accessible by a range of transport links. Hubs will be modern, sustainable buildings, supported by smart technology and shared services.

Wellington Place, close to Leeds Station, will deliver high quality offices for civil and public servants, including for HMRC, which will operate one of its 13 regional centres from Wellington Place.

NHS Digital will also relocate to Wellington Place which will support the organisation’s move to enable smarter and more flexible working, and collaboration.

Minister for Government Resilience and Efficiency, Caroline Nokes, said: “The Civil Service is a great place to work and enabling civil servants to have high quality and modern working environments will ensure that we work productively and deliver the best services to the public across the country.

“The Leeds hubs will be a catalyst for growth in the surrounding cities and towns, helping rebalance the UK economy and underpin our strategy for a strong, well-connected Northern Powerhouse that can continue to provide good-quality jobs and economic growth across the region.”

HMRC Chief Executive Jon Thompson said: “We are delighted to be part of the new UK Government Hub in Wellington Place, Leeds. This is another step in HMRC’s transformation into a modern digitally advanced tax authority.

“It’s the beginning of a process that will see around 3,800 colleagues come together in state-of-the art facilities, enabling closer working relationships and increasing our effectiveness in collecting taxes. It will also make HMRC an important contributor to the economy and to communities in and around Leeds.”

Chief Executive of NHS Digital, Sarah Wilkinson, said: “We are delighted to co-announce our involvement with the new Leeds Government hub, this is a significant investment in the city and re-enforces their long-term commitment to Leeds.   

“As one of Leeds major employers, it is an opportunity for greater consolidation of our Leeds estate when completed and will enable us at NHS Digital to build on our existing strong relationships with the wider NHS and government departments.

“Over the past few years, Leeds has established itself as the major digital city in England with a thriving technology sector which NHS Digital is proud to be a part of. The work NHS Digital does here in Leeds affects the lives of everyone in the country. Being part of the Government Hubs programme in Leeds is a great opportunity to work in partnership with both national and local organisations.”

Chris Taylor, Head of Private Markets at Hermes Investment Management, commented: “Wellington Place is of pivotal importance to Leeds as the long term commercial district of the city and therefore it is fitting to see the Government select this location for a hub in Yorkshire.

“The comprehensive place making initiatives we have undertaken at Wellington Place, in partnership with CPPIB, coupled with its cultural and heritage links, have transformed this highly accessible estate into the commanding commercial district of the city. The Government’s pre-let is testament to the long-term responsible investment approach adopted at Wellington Place by our development manager, MEPC, with support from Leeds City Council, and a further seal of approval for the long term success of the scheme.”

Andrea Orlandi, Managing Director and Head of Real Estate Investments – Europe at CPPIB added: “We are pleased to have the Government select Wellington Place for its regional offices in Yorkshire. Attracting a tenant of such calibre underscores the merits of the modern and flexible office and leisure space found at Wellington Place, and is an important step in our broader development plans for the project, which will see additional buildings delivered over the coming years. The project is well-aligned with our long-term investment strategy of working with like-minded partners like Hermes Investment Management to acquire and develop high-quality, well-located real estate.”

Established in 2010 as part of the Cabinet Office, the Government has central oversight over all government land and property and works collaboratively across the civil service to create an effective and efficient government estate.

James Dipple, Chief Executive of MEPC, said: “This is an exciting time for Wellington Place and we are thrilled to be chosen as the home for the new regional government hub. We look forward to welcoming our new occupiers to join our existing portfolio and believe they will fit seamlessly into the well-established and active public realm at Wellington Place. Both Hermes and CPPIB acknowledge the importance of working in partnership with the public sector and are looking to create sustainable places which not only deliver attractive financial returns to our investors but also have a beneficial impact upon the environment and local communities.”

“The Government’s decision to locate at Wellington Place, in the heart of Leeds, is great news for the city as it maintains its evolution as a key northern location for business. We are proud to be a part of its sustained development and can’t wait to see what the future holds.”

Jeff Pearey, director of JLL who advised the Cabinet Office, said: "This is the largest office pre-let in Leeds ever and a major economic boost for the city. The biggest up until now had been the 374,000 sq ft letting to the Government at Quarry House which heralded the arrival of various government departments, some from London, over 20 years ago.

"As well as constituting the largest first phase acquisition of all of the regional government hubs completed so far, this property deal bolsters and reinforces the long term potential of Leeds' West End."

The government has already announced the location of seven multi-departmental hubs to modernise the working environments for civil servants:

• HM Government Erskine House, Belfast

• HM Government 3 Glass Wharf, Bristol

• HM Government 10 South Colonnade, Canary Wharf

• HM Government 6 Central Square, Cardiff

• HM Government 1 Ruskin Square, Croydon

• HM Government New Waverley, Edinburgh

• HM Government India Buildings, Liverpool

The hubs in Belfast, Bristol, Cardiff, Croydon, Edinburgh and Liverpool are also part of HMRC’s network of regional centres.

JLL advised the GPU; Cushman & Wakefield and JLL advise Hermes, CPPIB and MEPC.

jbuckley@costar.co.uk

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