Low demand for office space at former Royal Mail building following pandemic

Nicholas Thomas Local Democracy Reporter

A major redevelopment of a former Royal Mail sorting office has hit the buffers because it is “very challenging” to find people needing office space after the pandemic.

The building at Mill Street, Newport is “currently undergoing an extensive refurbishment” and will be known as The Hub when it opens, providing “high-quality office space”, according to the developer.

But the building is currently standing empty, despite a facelift on the outside and the project being “probably about 80% complete”.

‘Reluctant to finish’

The developer is reportedly “reluctant to finish the internals” at the site because the “office market is very challenging at the moment”, Tracey Brooks, Newport City Council’s head of regeneration and economic development, told a committee on Monday (December 11).

Chris Reeks, a member of the performance scrutiny committee for place and corporate, asked her why progress on The Hub had seemingly ground to a halt.

“The issue is across the sector in terms of occupiers”, Ms Brooks said, adding that a timeline for completing the project was a “commercial decision” for the developer, not the council, to make.

But committee chairman Mark Howells asked whether the developer “had effectively taken a significant loan from the council and not paid anything back until they occupy that building”.

“So they’ve just effectively sat on council money doing nothing, and they’re under no obligation to continue and finish it, and let it, and not pay us back – so they could never pay us back if they don’t let the building?” he asked.

‘Take the building back’

Ms Brooks said a “loan agreement” was on the public record, and “following completion they will start to repay the loan. “We are not worried we are going to lose money on the site,” she told the committee.

Gavin Horton, another committee member, asked for a “time stamp” for when the council could seek repayments from the developer or potentially “take the building back off them”.

Ms Brooks acknowledged that was “an option open to” the council, but “I don’t think we are at that point yet”.

The city council was in “regular dialogue” with the firm, she added.

Garrison Barclay Estates is the developer behind The Hub, and on its website said the project was “designed to inspire companies and individuals alike”.