THE multi-million Station Approach development in Winchester must address the growing shortage of office space in the city, a meeting heard.

Councillors were told that there is a mounting crisis because of the shortfall that jeopardises the city’s economic future.

Estates director Kevin Warren briefed councillors as they discussed the troubled scheme.

The Local Economic Partnership have undertaken extensive work and there is an absolute shortage of office space, he said.

“A large number of companies have contacted me indicating how concerned they are about the shortage.”

He pointed out that several years ago a refurbished Avalon House on Chesil Street was being let for £19.50 per square foot. Now £26-£27 and more is being mentioned across the city centre. “I have been contacted by a company in the last two weeks, a company with an international reputation and a portfolio of £1.6 billion, extremely concerned about the ability to expand.”

Offices were “being hoovered up by developers” for conversion into residential. “The laws of supply and demand means rents go up in absence of supply. Rents going up from £19.50 towards £30 indicates how serious the situation is for the city. Businesses will be gradually be driven out of the city. That will have a detrimental impact on the economy if businesses are unable to develop,” warned Mr Warren at full council.

The first attempt to develop the area near the train station collapsed in July when councillors voted that the scheme was too big.

Council leader Stephen Godfrey said the council was now taking a different approach, with the design and procurement process managed by the Royal Institute of British Architects.

But he added: “We need to move quickly to meet the needs of the business community. We are under increasing pressure for more office space not least because of residential conversions.”

“We have major business who want to continue or move here. We need to give assurances that the council will deliver these spaces to employ hundreds of people and something to be proud of in the years to come.”

Council approved £1.5 million for commissioning design work.

The ruling Tories accepted a Liberal Democrat amendment that would tighten control of the process. Lib Dem councillors are concerned the second scheme will be too similar to the first because the design brief is likely to be the same.