2 St Peters Square September 2016
Two St Peter's Square is due to complete in January

DWP lines up Manchester office options

Jessica Middleton-Pugh

The Department for Work & Pensions is understood to have narrowed its long-running search for an office in Manchester to two city centre options; the new-build Two St Peter’s Square, and the refurbished Arkwright House.

DWP has investigated a number of properties to satisfy its 70,000 sq ft requirement over the past year. The Government office was rumoured to have chosen Manchester Royal Exchange, before pulling out to pursue a deal at Ask Real Estate’s 101 Embankment, under construction at Greengate.

However, it was then beaten to a deal by Swinton Insurance, which is in line to take all of the 165,000 sq ft building.

Now, DWP is understood to be “in dialogue” with Two St Peter’s Square developer Mosley Street Ventures and owner Deutsche Bank. Construction is due to complete by January; DWP is understood to have set a deadline to be in a new office by summer 2017.

The 160,000 sq ft building is one of the most high-end offices available in the city. Accountant EY has already agreed a pre-let on 41,000 sq ft. Quoted rent is £33/sq ft.

DWP’s second choice, Catalyst Capital’s 105,000 sq ft Arkwright House, is a refurbishment of a listed building off Deansgate, available at £26/sq ft.

Based on its requirement size and quoted rents, Arkwright House could cost an annual rent of £1.8m, while Two St Peter’s Square would reach £2.3m.

The DWP could save up to £500,000 a year of taxpayer’s money, if it chose a secondary office rather than a prime location.

However, despite the significant price difference, sources suggest that DWP is leaning towards a new-build office. The office will be a base for the roll-out of the Government’s Universal Tax Credit benefit system, and will need to support high-specification computers.

Negotiations at Two St Peter’s Square are rumoured to be focusing on the issue of break clauses; DWP needs a break at seven years to allow it to potentially move into the planned Government hub in Manchester, should the 900,000 sq ft scheme be progressed. However, Deutsche Bank is pressing for a 10-year break.

The rumour that DWP is preferring new-build offices in prime locations has caused grumbles across the property community. As one commenter said: “It doesn’t sit well with me that my taxpayer’s money would go towards paying the rent of a new building.”

DWP declined to comment.

Your Comments

The DWP runs essential services for every citizen in this country and has an annual turnover of £200bn+. It should be attracting the best and brightest talent to develop ground-breaking and high quality digital services. I’m afraid working out of port-a-cabins in run down towns is a false economy, because the talent attracted will not be of a sufficient calibre to deliver the services we expect. The DWP admin operation has been underfunded for too long- and the effects of this are clearly visible in constant delays and problems with their existing programmes of work.

By Taxpayer

No.2 does look like a 1970s public sector office, so should suit them fine. But will they furnish it in brown and orange hessian?

By Gene Walker

It looks like No.1, but a little bit worse

By zebith

£26/sq ft in a bit steep for Arkwright house isn’t it? nice enough building but wouldn’t have thought it’d have been valued anywhere near that.

Disagree with “taxpayer” though – at least in part. “Run down portacabins” wouldn’t be appropriate at all but grade-A in premium location at around £30/sq ft isn’t needed either. Middle-ground would be fine, I’m sure there are still some affordable options in city centre (is that 1970’s building with the silver dome still available next to first street? Been empty for a while I think, was around £10/sq ft when I noticed it marketed – and a good building and location for that price – big enough too). If not old trafford would provide a great location for decent enough space at a cost acceptable to the public purse.

By Dave

DWP (Doesn’t Work Properly) need to stop fancy-footing around and start doing what they’re supposed to do. Which is getting settled in somewhere and getting on with the job at hand to the best of their ability. These clowns should have “attracted the best and brightest talent” years ago instead of always seeming to be starting from scratch. New offices, new people, new strategy….repeat….new offices, new people, new strategy…repeat…and repeat. Cretins.

By Mizzer

Number one St Peters is an amazing building.Number 2,speaks for itself.

By Elephant

I suppose if DWP are chasing staff that would otherwise work at a big 4 accountancy firm it would make sense. But either way no one should be condemned to work in that mirror glass office on City Road – truly an atrocious working environment and I can say from first hand experience.

By PNW reader comment

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