The shining, copper-clad exterior of One Friar Gate Square, Derby's newest office development, makes the building impossible to overlook. But its appearance is not the only reason why this building is the talk of town; it is the first speculative office property constructed in Derby's city centre since 1991. Although Lowbridge, the property developer behind the project, is still conducting confidential negotiations with potential tenants, local newspaper the Derby Telegraph reported in May that two firms have already expressed an interest in moving into the building.
“Developers are dusting down their plans, and watching who takes residence in One Friar Gate Square, and how much rent they pay,” says Russell Rigby, director of Rigby & Co, a local commercial property consultancy.
Rush to build
Duncan Ashby is a director of Norseman Holdings, an East Midlands commercial property developer that is among the developers 'undusting' his development plans. Since 2007, he has been working on One Derby, an office complex that comprises five buildings, retail space, restaurants and a proposed multi-storey car park. Unfavourable economic conditions have meant that the project has struggled to get off the ground, though that may soon change.
“We are exploring ways in which we can commence on site with phase one [of the One Derby complex] within the next 12 months,” says Mr Ashby. “Interest in One Friar Gate Square has proved that there is latent demand in grade-A office space located in Derby's city centre.”
Aside from One Derby, there are other developments that are looking to get off the ground, such as City Gate House, a 5500-square-metre office complex built by Cedar House Investments, and Wilson Bowden Developments' 8800-square-metre office building, known as Number One Cathedral Green.
As all of these buildings are located in or around the 'Cathedral Quarter', Derby's picturesque but quiet city centre, it is widely hoped that the developments will 'bring suits back to the streets of Derby', to use the local parlance.
Rush to buy?
Derby's residential market is also showing encouraging signs. In May, Compendium Living, a Liverpool-headquartered development company, started on the construction of Castleward, a major urban development scheme in Derby that will see 800 homes constructed over the next 10 years at a cost of £100m ($151m). Also, UK Regeneration, an East Midlands-based developer, unveiled at March's Mipim property summit the details of its Nightingale Quarter in the city, a site which is expected to host 300 houses and a supermarket.
All of these developments are, of course, important for locals, but their significance goes beyond Derby's boundaries. This shows that the UK property market does not revolve exclusively around London, and that well-run second-tier UK cities, after years of stagnation, are capable of rebounding.
“The situation in Derby reminds me of the scenario in 'The Voice' [a music talent show in which celebrity judges pick promising new singers], where judges are expected to press the buzzer when they spot a hot prospect. I know that there are a number of office developers itching to press the buzzer,” says Mr Rigby.