Making regeneration feasible: Q&A with Bankfoot’s Andy Day
All along the South Bank of Leeds there are major regeneration projects underway. The sites along the River Aire include Latimer’s 1,800-home, £100m Dyecoats scheme in Kirkstall, Platform_’s 1,350 home and grade A office Sweetfields development, and looming large over the whole area is, of course, Vastint’s place-changing 24-acre Aire Park.
Into this mix of BTR and office space comes Bankfoot APAM’s Canal Wharf development. The existing 1990s office building is set to be demolished and replaced with an eight-10-storey scheme designed by Russdrage Architects. At what point was the decision made to veer away from offices into resi?
“With this particular one, the clients who bought the building six or seven years ago realised that its days as as an office building were coming to an end, and with the tenant vacating and costs required to upgrade making any repositioning unviable, Bankfoot were approached and we ascertained it was no longer the most valuable use for the asset.
“So we got involved a couple of years ago. As a multi-sector development manager, we can understand the best strategy for a stranded asset and formulate a deliverable plan that clients can present to their boards or investment partners.
“ESG is central to what we do. Designs and delivery have a strong focus on the Environment and Social challenges, but we find the Governance side is often overlooked. The client at Canal Wharf is a family trust, and it is critical for them to be comfortable the strategy demonstrates best value for their capital investment strategy.
“Now, with Canal Wharf, it wasn’t the most complicated process. You just have to stand there and look around you and see all the fantastic BTR coming forward.”
Once the decision to change the use has been made, the next steps involve feasibility, design, and – try not to groan – the planning process. What are the timelines involved with this project, and what are the next steps?
“The planning process can be quite complicated in the sense that, at Canal Wharf, there are heritage aspects to consider, height aspects to consider, build costs are only going up, and yields are softening, so there’s a lot of factors that we have to consider to make sure we are bringing forward the right product for our client that will be acceptable to the local authority planning team.
“We incorporated the area’s red brick into our design, so it still has that Canal Side, warehouse employment feel. It doesn’t look too boxy and modern. It fits the area quite nicely and I think a lot of the other developments down there have done that really, really well and we’re quite pleased that we’ve been able to achieve that as well.
“I would say we started the initial feasibilities around two years ago to bring us to this point where we’ve got consent. Looking forward, we are exploring several different opportunities – forward funding and outright disposal, for example – and ultimately will be driven by what produces best value for our client “
Sustainability a core consideration
As well as the financial feasibility and the heritage aspects of a scheme, more and more a focus is being shone on the sustainability side of things. Every press release that comes across my desk will highlight the environmental credentials of a development, and councils themselves are often as concerned with the ‘green’ impact of a project as they are with the aesthetics of it. How did this impact this particular job?
“[Sustainability] is central to pretty much everything we do. We see value in how many rooms you fit in, the rent you can get, but fundamentally these developments actually need to lease – and evidence in the market clearly demonstrates a stronger demand and shorted leasing period for best in class. The way we look at it for our clients is that if they’re looking at a returns basis, those returns are going to be higher if it’s built well and correctly and to the highest standards.”
And finally, Day started off by emphasising the G in ESG – the governance. The still-fairly-new government has, in quite a short space of time, brought in a lot of directives as to how they want to change planning and increase housing targets, which these BTRs will help towards. Has he noticed an impact yet and is he optimistic about the changes?
“I’m very optimistic. I mean, I think the challenges we have aren’t a quick fix. Obviously, we’ve got a planning system that needs improving. We’ve also got the Building Safety Act, which is a huge challenge for us – it adds more time onto the development timeline, which means money is tied up for longer, which impacts returns.
“If there was a bit more clarity around the process we can actively manage and mitigate any challenges to our clients. It’s uncertainty which, as we have seen in the market before, impacts sentiment negatively.”
