City’s public sector-funded office building labelled ‘exceptional’

Richard Youle Local Democracy Reporter

A new office building largely funded by the public sector in a Welsh city has been described as an “exceptional final product” which faced some tricky setbacks.

The building, 71/72 Kingsway, Swansea is due to cost £49 million once final payments of £1.1 million have been made this year.

It opened last year and forms part of a project under the city deal for the Swansea Bay region. Its main purpose is to attract high-tech companies keen to locate to Swansea or those based in the area which might otherwise leave due to a shortage of good quality office space.

A report looking at what has gone well and what could have been better was discussed by city deal leaders at a meeting on January 27.

It said the council-led building has created space for 600-plus jobs and that 366 people currently worked there with more expected to come over the next 12 to 18 months. These were mainly what the report described as “jobs sustained” rather than new jobs in Swansea.

The report said the building was 80% let but hadn’t been able to attract a ground-floor coffee retailer. Despite not achieving full occupancy to date rental income achieved £22 per square metre, considerably more than the £14 per square metre modelled for.

One of 71/72 Kingsway’s tenants, e-commerce business Veeqo, has grown and been acquired by tech giant Amazon. Swansea Council leader Rob Stewart said Veeqo had more than 100 employees and that it might potentially require more space at the building. “That’s what we want to see,” he said. “We should take confidence from that.”

The council produced a design brief for the building in 2018 and a contractor, Bouygues UK, was appointed during the Covid pandemic in 2021.

Comments in the report from Martin Nicholls, the council’s chief executive, said risks had been well managed and that the new building was an “exceptional final product which will be a huge asset for Swansea and its businesses for year to come”.

The report also said the procurement process could have been better, and more flexibility allowed for in the building’s design. It added that the council itself experienced “resource issues” relating to the project and that several sub-contractors had gone into liquidation. Some snagging issues remain.

The cost of the development was expected to be around £48.5 million, with contributions of around £13.7 million from central Government, £29.8 million from the council and £5 million from the private sector. The report said £5.5 million had in fact come from the private sector.

Veeqo has said that moving to 71/72 The Kingsway from its smaller office in Swansea showed the city’s potential to compete as a national technology hub and gave the company scope to attract top talent to the region.