Wolverhampton pumps fuel into Midlands engine
Wolverhampton has often had to play second fiddle to its bigger neighbour Birmingham, but plans are afoot to ensure the city holds its own as part of the new West Midlands city region.
The city is in the midst of a transformation powered by more than £3bn of public and private investment, with the complete redevelopment of the station being just one key element of the facelift that will also include improvements to the city’s retail, restaurant and office space.
At last month’s Mipim UK, the City of Wolverhampton Council launched a competition for its new i9 office block, which it is developing, calling on architects to come up with designs for an eye-catching modern office worthy of a national headquarters. The confidence in its potential to achieve a big-name letting is unsurprising, after its 40,000 sq ft sister office i10 gained fully-let status within nine months of opening.
The i10 (pictured) was the first major speculative office development in Wolverhampton city’s core for many years, and the first part of the council’s £120m Interchange regeneration project which, along with the new offices, includes the new railway station and accompanying Metro line extension. Signed up tenants include Tarmac, water treatment business Ovivo and developer Countryside. The Birmingham office of Knight Frank brokered the trio of deals on behalf of Wolverhampton council and development managers Neptune Developments, achieving a new record rent for Wolverhampton’s city centre offices of £16/sq ft.
Jamie Phillips, partner at Knight Frank and head of the offices team, admits he was pleasantly surprised by the amount of interest he received in the building.
“Wolverhampton city centre lagged behind for a long time because of a lack of sites and funding,” he says. “It has been less attractive until now but currently it’s a very strong location and i10 proved that. It is business-park-quality space in a city centre location – and it’s much cheaper than Birmingham.
“There’s lots of investment going on in the city. Plans for the new station make it much more attractive for businesses. The council is putting in a lot of investment and thought into how it does it. The problem in the city core is the lack of entertainment, but it is addressing that and making it a better place to work.”
As has already been seen in Birmingham, a new station can create a whole new perspective for potential occupiers and investors – something that has not passed the council by. Work is due to begin on the new station next year after the extension and refurbishment of the existing multi-storey car park, which is expected to be completed by Christmas.
“Interchange is creating a whole new front door to the city,” says Tim Johnson, the council’s strategic director for place. “We have got a lot of occupier interest in office space at Interchange, but it’s not just about filling it – it’s about filling it with occupiers that will employ the kind of people who want to use all the new facilities coming into the city.
“What we are trying to do is bring more quality sites to the market. The big thing is the city centre. What we want to do is create a pipeline of investable propositions and we know the interest is there.”
Importance of recreation
One of the most important sites the council is already investing in is the Westside leisure scheme, with its preferred development partner named as Urban & Civic in July.
U&C fought off competition from 10 other UK developers and investors to land a six-month exclusivity period on the 6.4-acre site, which comprises three adjacent car parks, the freeholds of which are owned by the council. Plans include a multi-screen cinema, restaurants, bars, hotel, apartments and public realm space, to be delivered in two phases over five years.
Those key components were all specified in the brief from the council, but Simon Hawkins, development director at U&C, says there is still plenty for the firm to get creative about as it works on detailed plans for the site. A full planning application is likely to be submitted around autumn next year, with work set to begin on site in 2018.
“We were definitely attracted by the size of site; it’s rare to get that kind of land mass for development,” says Hawkins. He adds the wide catchment area of Wolverhampton – a total of 1.73m people live within a 30-minute drive – as well as the council’s vision for the city, were further reasons U&C was keen to be selected.
“It’s a proactive authority and there is clearly a large amount of development at the moment across the city,” he explains. “The council had the foresight to bring the site together by getting it all under its ownership.
“I think what the city doesn’t have is a leisure offer that keeps people in the centre past 6 or 7pm, certainly not from a family point of view, and there is real restaurant demand there. It’s about trying to develop something that keeps people in the city after work. It’s already got some good entertainment options with the theatre and the concert venue but it hasn’t got the restaurant offer to match.”
Restaurants will form a key part of Westside, but Hawkins says lessons will be learned from other schemes that have tried to put too many food and beverage operators in one place. He says the leisure strategy will be more mature than would have been the case if the scheme had come forward in the early days of the industry’s awakening to the draw of food and beverage.
Wolverhampton’s retail offer has already evolved in the form of improvements to the existing Mander Centre, which has undergone a £25m refurbishment since Benson Elliot bought it two years ago. The hard work has recently paid off with a high-profile letting to H&M, which has just opened a new 30,000 sq ft store there, featuring the brand’s homeware range; a first for the Midlands. A programme of reconfiguration has created 10 new units this year, with other recent lettings including Footasylum and JD Sports. Debenhams committed to the scheme in 2014 and has signed to open a 94,000 sq ft store in autumn 2017.
Ed Purcell, a surveyor in Cushman & Wakefield’s Midlands retail agency team, says the prime lettings to Debenhams and H&M are driving future changes at the centre. “On the back of these two lettings we will seek further fashion, restaurant and retailers for the scheme, and will bring a much needed refreshed and successful shopping centre,” he explains.
“Wolverhampton is the second-biggest city in the West Midlands and it was woefully under-represented by retailers given the size of the town.”
The retail revamp certainly has been a long time coming, after plans for a new £300m shopping complex collapsed in 2011. The Summer Row scheme was finally abandoned after six years of attempts to get it off the ground when developer Multi UK failed to find a new backer after a deal with consortium Northern Ireland Investors fell through.
“Wolverhampton’s image was a little bit blighted in the mid-2000s,”says Benson Elliot’s director of retail Peter Cornforth. “Then the recession came and the Midlands really missed out in 2006-08, which was a great time for retail. There are retailers who have been in stores for 10 or 15 years who perhaps have wanted to move to a different location or a different sized unit but haven’t had the opportunity to do so.”
Once again, lack of space and investment has prevented much-needed development from coming sooner, but Cornforth can also see the upside of the delay. “There are people not represented who should be and people in spaces they would never take now,” he says. “Debenhams and H&M both had long-term requirements going back a decade. H&M’s requirement has changed now and it is taking a space twice as big as it would have taken five years ago.”
Credit to the council
Benson Elliot is firmly on the list of the city council’s admirers, according to Cornforth. “There’s a lot of other things going on as well as what we’re doing,” he says. “The Mander Centre is part of the wider picture and the council is one of the most proactive local authorities we’ve come across, so that helped our decision [to buy]. If you looked at Wolverhampton now and then looked again in five years’ time it would definitely look very different to how it does now.”
One of the key messages of the West Midlands city region has been the need to spread investment and regeneration outside Birmingham and the HS2 area, and rebalance the economy within the region’s urban centres.
It is hoped that this will prompt more investors to look Wolverhampton’s way, but there is already a lot going on in the city, which has led to a newfound sense of excitement about its future and a sense that Wolverhampton can be a crucial driver of the Midlands engine.