Bradford’s economic outlook

The district’s economy.

Almost every time I am at Council I’m told that the district is creating ‘highly skilled and highly paid’ jobs. This has been the case since 2014, but there’s little evidence to support statements.

Last year I started dialogue with businesses across the region, most employing 250+ people. The purpose is to understand the reasons why Bradford has lost so many big businesses and to look at the barriers that prevent investment in Bradford. This is something which I would expect to be done by the council or local MPs, but there’s little evidence to show that this is happening.

In the recent past, I was informed that a lack of ‘Grade A’ office space was the issue, consequently and understandably, Bradford built One City Park.  Price Waterhouse Cooper moved into this new office space from Godwin House, Bradford into the new office facility. Since then, One City Park has remained only half full. The question, why only half full?

Jump to helping business.

Highly skilled, highly paid job losses.

Over the past 2-years Bradford has lost highly paid, highly skilled jobs:

• Provident Financial Services, who had moved it HQ to London. Nobody at the council was aware of the loss. Provident Financial (now Vanquis Banking Group) did not leave Bradford but restructured, closing its 141-year-old doorstep lending division in 2021 and pivoting to a digital bank model
• Emerald Group Publishing, a Born in Bradford company formerly based in Bingley has moved to Leeds.
• More recently, Yorkshire Water moved its head office from Bradford to Leeds. Bradford still retain Yorkshire Water’s call centre in Thornton, but one must wonder if or when these jobs will displace elsewhere.
• UKAR (UK Asset Resolution) which moved from Bingley to the HML building in Skipton.

I then started to approach big business to understand barriers, and most of the information I obtained was fed back to the West Yorkshire Combined Authority (WYCA).

External meetings (LOAF).

I met with one member of LOAF (Leeds Office Agency Forum) who provided the following detail:

Further to our recent conversations please see below –

• The city is awash with Grade A office space

Grade A space is difficult to define as it can differ from market to market. If we look at the BCO (British Council for Offices) we can make a judgement from the information there. Technically the new building would be the only ‘Grade A’ space in the City Centre, however there are lots of other buildings with the potential to be Grade A.

A definition of Grade A office space yields:

• Location: Prime business districts with excellent transport links.
• Design & Quality: Contemporary, high-spec finishes, premium materials, unique architecture.
• Technology: Advanced HVAC, high-speed internet, smart building systems.
• Amenities: High-quality facilities like gyms, catering, or collaborative spaces.
• Sustainability: Often includes environmental certifications (BREEAM, LEED) and energy efficiency.
• Age: Generally built or substantially refurbished within the last five years.

Vacant Commercial Office space in Bradford is currently c. 180,000 sq ft in Bradford City Centre, of which 30,000 is the new build One City Park. This Grade A office space, located in Bradford City Centre has office suites from 1,548 sq ft. There’s only 29,255 sq ft remaining and available to rent by Knight Frank.

Buildings such as 1 The Interchange (former HMRC building prior to the GPU Hub being constructed in Leeds and consolidating numerous local HMRC centres) sit on the market vacant. This building has the potential to become Grade A office space again however it is not cost viable to do so. This building has not been occupied (in the most part) since the HMRC left in 2017 (9-years ago).

• The appetite to invest in Bradford is lacking.

Aldermanbury House, a Grade A building has 8,800 sq ft of vacant floorspace and has been on the market for c. 5 years now.

Typically on an instruction in Leeds, we have monthly marketing meetings to run clients through potential interest, marketing and so on. Due to the sheer lack of interest, I have a quarterly 10-minute call with the client at Aldermanbury House. Typically, we will have zero to one enquiry per quarter.

In Leeds we have the LOAF – Leeds Office Agents Forum, a consortium of property consultants that sit down each quarter to run through the office deals that have been done in Leeds City Centre and Out of Town, so that we are able to report consistent figures to the press and to our clients. The Leeds market has roughly 15 consultants that submit information, 10 of whom are national or internationally recognised companies.

By contrast Bradford does not have anything similar because there aren’t enough transactions.  The only national firm represented with a Bradford office is Eddisons, then there are three main niche firms operating, Sharma Williamson, Starkeys and Mark Brearley & Co.

There’s an instruction for Shire House at  https://markbrearley.co.uk/property/shire-house-harris-street-bradford-bd1-5hq/. There are two floors vacant in this building, both for over 7-years. Enquiries for this space coming years apart. As you can see from Mark Brearley’s brochure, office space is still space available at Shire House.

There has been numerous client calls over the years looking to invest in Braford, because buildings can be bought for next to nothing, for example The Wool Exchange. This ordinarily doesn’t matter, however, when you can’t let a building, you are left with void service charge costs and empty rates to pay.

• Developers and investors only looking at prime business locations.

Development finance is currently very expensive due to lack of confidence in the market (amongst other things). Schemes in Bradford are extremely difficult to make viable. On the other hand, Wellington Place in Leeds has built a building every 12 to 24 months over the last 14 years, they have let the buildings each time they have rebuilt them. Lettings are mainly to top end covenants (most recent large deal 120,000 sq ft to Lloyds Bank).

In Bradford, developers cannot get the financing to stack up to build. If they cant build I don’t see who can!

To build in Leeds now, developers are needing to quote rents of £50.00 per sq ft and the majority need a pre-let (space that is committed to prior to building rather than speculative development). The level of pre-let can vary depending on the scheme but most look at 50% of the available space.

You must bear in mind that top rents in Bradford (prior to One City Park) were at £17.50 per sq ft, and rarely achieved, now One City Park is quoting £22.00 per sq ft. They are only able to do this due to the Council finance wrapper. I understand why the council wanted to build One City Park, however it is still largely vacant and as far as I am aware there are no real active requirements in Bradford now.

• The Bradford business market.

Bradford has a tertiary classification now due to its very low prime rents and minimal market activity.

I know all of the agents mentioned above, if you wanted to talk to anyone from Eddisons, Starkeys, Mark Brearley & Co or Sonny Sharma I can set that up.

Other big business and SMEs.

I’ll continue to work with business to drive matters forward, and have even tried to work with the opposition on these issues but my assistance was forcefully declined.

I recently met with a large Bradford based food manufacturer who have created 200 jobs, invested £11 million in new plant and equipment, and who at the time were struggling to fill vacancies. I approached the Combined Authority (WYCA) and suggested that they entered into dialogue with this company, having already taken time to ensure that WYCA would be welcomed to the business.

The bottom line, no financial support could be offered for the 200 newly created jobs. Conversely, following a visit to India, the WYCA attracted £8 million inward investment into Leeds and created 50 jobs. I assume that the offer was subject to incentives. If I look at these two cases objectively, then:

• The UK based company pays Corporation tax, wages, is creating UK jobs but receives no grant/job creation assistance.
• The India company will not pay Corporation tax in the UK and is creating only 50 jobs. Readers need to be aware of the £9.6bn trade deficit that the UK has with India.

Which business would you provide support to?

The crisis in the hospitality sector.

Hospitality employs around 13,500 people in the Bradford district and is aligned in part to tourism.

In the last few weeks, I have been talking to business in the hospitality sector to understand their challenges. Several successful small pubs serving food have expressed financial concerns. Among which the consensus is that increases in business rate, increased wage and national insurance hikes are costing them and extra £50,000 – £60,000 annually. Many are reluctant to pass price increases to customers, and already work with wafer-thin margins and dwindling footfall.

To drive the point home, and having spent time discussing turnover figures, an extra £50,000 per annum equates to around £1,000 per week. In the overall scheme of things, that doesn’t appear to be much. However, to be able to pay that extra £1,000 turnover needs to increase by £3,000  per week!

Many establishments have said that unless there’s some change in direction, August is likely to see many business closures. I have consistently raised these issues in WYCA meetings.