Financial and media firms are flocking to the emerging capital of the North to share its 24-hour European-class culture. Which is good news for construction companies …
The passengers at Leeds railway station are watching construction activity as they wait for the next train to London King's Cross. Diggers trundle up and down the opposite platform clearing debris while a worker saws up a piece of wood. A film of dust settle on the passengers' clothes, luggage and on the scaffolding that clads the station walls.

The station is in the middle of a two-year, £150m refurbishment, and it prepares new arrivals for what they see when they walk into the streets. Immediately next door, demolition work has begun on the old post office to make room for a £170m, 10-storey office project called City Square House, for AWG Developments and a consortium including property consultant Lambert Smith Hampton.

Look further, and the whole city-centre area, which has the station at its heart, is dotted with cranes and hoardings as office developments spring up in response to booming demand. This is becoming increasingly difficult to meet, as more and more firms, convinced by aggressive marketing campaigns, move to Leeds because of its good transport links and increasingly vibrant cultural and social life. As a result, the city is rapidly growing in importance as a financial and media centre.

"Leeds has shrugged off its former industrial image and is successfully convincing people it's a 24-hour European city," says Chris Jones of Carey Jones Architects. "It's creating a boom for construction. Leeds is absolutely red hot." He illustrates his point with his own practice's projects such as Clarence Dock for the Crosby Group and the Northern Ballet Theatre and Phoenix Dance Company headquarters in the new cultural quarter.

Developers are keen to snap up every available piece of land in the city centre as companies arrive and existing large occupiers hunt for new premises. The DTLR is looking for a site within a kilometre of the centre for up to 900 staff. The workers are currently dotted around offices in Leeds, but the DTLR wants to centralise its operations and will need at least 14,000 m2 of office space. Royal Bank of Scotland and law firm Eversheds are also looking for office space in excess of 9300 m2.

Shepherd Construction business development manager John Dixon says the commercial market has picked up noticeably in the past six months or so, and is now the best it's been for three years. "There are a lot of proposals around and everyone is pitching for them. Everywhere you look, there are opportunities," he says.

HBG regional director Roger Mansell says he's rarely seen Leeds busier in terms of construction work. "It's a very strong commercial market," he says. "All the possible schemes out there have become very strong. You always think that the market should overheat but it never does – it keeps plodding away."

And all the statistics suggest a sustainable boom will continue. The Leeds Development Agency, charged with attracting business to the city (see overleaf), expects commercial and residential development to rise in coming years. The agency estimates that large-scale developments worth a total of more than £3bn are under way or proposed in Leeds, as more high-value services firms, such as financial and legal companies, look to set up regional or northern offices. This has created demand for high-quality office space in the centre. More than 30 national and international banks have made Leeds a base for their operations, and the financial services sector now contributes one-third of the city's production, or £10bn a year. This is forecast by the Office of National Statistics to grow to £12bn by 2010. Employment in financial services has increased from 66,000 in 1990 to more than 100,000 last year, and another 48,000 jobs are expected to be created by 2010.

All these well-paid workers are attracting residential developers like bears to honey, and homes are springing up all over the city. There are several large developments already under construction, including the first stage of 185 apartments at Clarence Dock and a Mayfair Developments canalside project that includes 410 apartments and 5000 m2 of office space. Carey Jones Architects' Chris Jones estimates that there are up to 4000 apartments planned for Leeds.

Another spin-off from the city's growing popularity among financial firms is a dramatic increase in the number of public relations outfits setting up in the city. This growth is reflected in the latest figures from the statistics office, which show that Leeds is England's third largest centre of employment in the media, advertising and communications sectors. There are 13,000 jobs here, and employment has increased 20% between 1998 and 2000. Birmingham, currently in second place, employs only 1500 more people in these sectors, and has seen growth of only 2% over the same period.

Although the commercial and residential sectors may be the hottest news, education and health projects are also providing development opportunities in Leeds. For example, a £170m contract to build an oncology wing at St James' University Hospital is up for grabs with consortiums including Skanska, Bovis Lend Lease, Mowlem and Sir Robert McAlpine in the running. There is also a proposal for a £24m PFI deal to refurbish 12 primary and infant schools around Leeds, and a £500m Supertram project to link the city centre with the outlying suburbs through a 28 km tram network. This project is due for completion in 2007 and four consortiums are shortlisted.

With the local economy carrying on like this, there could soon be a lot fewer passengers waiting on the railway platform for the King's Cross train. In fact, folk could be coming t'other way instead.

What’s the council ever done for us?

The Leeds Development Agency is one of the driving forces behind the city’s emergence as the financial, legal and media hub of northern England. The agency, which is part of Leeds council, is at the forefront of the race against Birmingham, Manchester and Sheffield to attract businesses to the city. The LDA’s mission statement is simple: it wants to drive business growth so that the people of Leeds can benefit from the jobs and opportunities created. It does this by, among other things, preparing derelict council land for development, handling enquiries from businesses and trying to link developers with prospective tenants. The LDA also offers a free inward investment and relocation service to businesses wanting to invest in Leeds. It has 230 staff and six divisions, including a project development arm that deals with regeneration projects and a property division that handles the council’s property portfolio.

Ambitious plans for Aire Valley

The huge Aire Valley regeneration scheme symbolises Leeds’ determination to attract businesses and investment. Property adviser Grimley has drawn up a 20-year vision for Aire Valley, an area of just over 1000 ha on the south-east edge of the city. It is Yorkshire’s second largest regeneration project and aims to create 930,000 m2 of commercial space, reclaim about 180 ha of brownfield land and build 1500 homes. The area already has 300 businesses and 10,000 workers, but another 29,000 jobs could be created if the scheme reaches fulfilment. Just to get it off the ground, experts estimate about £250m will need to be spent on infrastructure and environmental work. Developers are already moving the valley. The Skelton Business Park, proposed for the area near Junction 45 of the M1, is likely to win planning consent. This Carey Jones-designed project includes offices and a 200-bed hotel, and Leeds United FC also plans to build its £80m stadium nearby.