Case Study
We have provided a Growing Places Fund (GPF) loan of £4 million to support the redevelopment of the former Fenwick’s department store on Market Street, Leicester.
The loan was used to convert the former department store into serviced apartments and co-working business space with associated facilities and four new dynamic commercial units. The building has been renamed ‘The Gresham,’ in a nod to its original name when it was first opened in the 1880s.
Our decision to award a £4 million GPF loan is in line with our commitment to kick-start projects that will have a significant impact on employment and investment in Leicester and Leicestershire.
Fenwick’s store was an iconic retail location in Leicester and we were keen to ensure that the site was brought back into commercial and public use after the company moved out. The building itself is a prime example of Leicester’s Victorian architectural heritage and is grade-II listed.
The four-storey building has been converted into serviced apartments (or an ‘aparthotel’). The plans consist of 121 bedrooms with a hotel lobby bar, onsite restaurant and gym together with 4 ground floor and basement commercial / retail units totalling nearly 11,000 sq ft. In addition, the site hosts a 12,000 sq ft state-of-the-art co-working space which has been pre let to the Leicester Council for 25 years.
Co-working spaces are shared workplaces that allow small businesses, start-ups or freelancers to take advantage of top-class facilities without renting an entire office. This new development would be the first dedicated co-working space in Leicester, though similar facilities have proven extremely successful in Birmingham, Nottingham and Derby. It is envisaged that The Gresham will host nearly 12,000sq.ft. of high-quality office space.
The total capital cost of The Gresham scheme was £17 million, which included the building purchase, the preparatory works and the redevelopment / refitting costs of the scheme.
The funding comprised £4 million in developer equity, a £9 million development finance loan and our £4 million GPF loan.
The City Council will also invest £450,000 to fund the fit-out and set-up costs of the proposed workspace and then take a 25-year lease on the new space. Council funding for the proposed co-working scheme will come from capital set aside for the Leicester Economic Action Plan.
Originally opened in the 1880s, the building was home to Joseph Johnson’s, a family-run store, until its acquisition by Fenwick’s of Newcastle in 1962. Fenwick’s expanded the interior of the building by incorporating adjacent shops on Market Street and Bowling Green Street. The new LLEP-supported development will include the whole of the property as it was used until its closure in June 2017.
The Gresham was completed and fully opened in November 2021. The overall redevelopment timetable was only 13 weeks over schedule due to the COVID restrictions in play during most of the construction period.
The GPF loan repayment and accrued interest were settled in full in April 2022.