Workspace

There is a need for the Council to play an enabling role in increasing the supply of quality business accommodation within the borough whilst leveraging this for its economic development and growth strategy. Due to the current market rent levels (which in the short term may decline) and the lack of substantial inward investment from the private sector, the activation of a scaled workspace needs to come from the public sector.

For the city's long-term prosperity, the council should act as the leading enabler (as it did with Storyhouse). However, this should be in conjunction with several other partners to ensure its animation, success and sustainability.

CWAC council acknowledges in various reports that there is a need to increase business activity and support within the city alongside growing skills which employers now require. This would also be supportive of key findings in the LEP consolidated evidence base 2018, and the Reimagining Chester report (2e employment opportunities)

If the borough grows economically and delivers on the jobs target set within its strategy, the supply and demand of commercial premises need to be improved; otherwise, businesses will migrate to areas where they feel best supported.

It’s important to note that this organic growth around business and entrepreneurialism will drive Chesters businesses and attract others. It has built its ecosystem outside of its two neighbouring cities to a certain extent. However, to increase and attract business investment along with growth, the borough needs to deliver relevant and appropriate facilities to allow these businesses to facilitate start-up and scale up further.

For Chester, creating a workspace will require Capex funding, as there is a market failure within the city for quality office space with flexible terms which target the micro and smaller SME sectors. The council needs to be the enabler.

The key recommendations for Chester would be to:

Investigate and develop funding capability for a Capex project such as this for long-term business growth. This should be a bold statement of intent, and the recommendation would be for a minimum-sized space of 10,000 sq ft.

In partnership with a developer or potentially the University, look to repurpose an existing space previously given to retail to utilise a vacant building.

Evaluate the current office stock that the council holds and understand if any suitable space is available.

Discuss with University the possibility of space within their portfolio which could be utilised.

Foregate street would be a key location due to its proximity to the station and surrounding media / creative businesses (more details are included in the appendices section). However, another key area could also be identified as development potential, which supports long-term planning and city development.

If CWAC can activate a development company, it may be that they can provide the Capex for a fixed return and then look to create a consortium of key partners with a waterfall profit structure.

Chester needs to retain its indigenous businesses and attract others into the area.

The current availability of suitable space would indicate limited short-term partnering opportunities within the city for workspace. This approach would reduce the need for high CAPEX requests and, where possible, should be explored further.

Assumptions made on workspace being the refurbishment of an existing space, with new M&E installed.

Expectations would always be a loss in year one and are subject to the ramp-up period of which these models assume a conservative approach. Smaller spaces will always be harder to make profitable, given restrictions and the membership levels applied. Rent is applied at £8 per sq ft, with service charges and rates also being applied - it may be that these costs could be reduced by using a council asset.

The recommendation would be to initially look at a space of 10,000 sq ft and then build from there subject to further demand.