42 The Headrow Bought for Offices, Not Flats

MCR Property Group has acquired the former Direct Line HQ and will refurbish it for office and flexible workspace, shelving an approved plan for 230 co-living homes

A prominent Leeds office building will stay as offices, after its new owner chose to shelve permission to convert it into flats. MCR Property Group has acquired 42 The Headrow, the former Direct Line headquarters on the corner of Albion Street, describing it as a £37.6m gross development value opportunity. The ten-storey landmark, empty at its upper levels since 2021, already had planning consent to become 230 co-living homes. MCR will not use that consent, opting instead to refurbish the building for commercial use — a notable vote of confidence in the Leeds office market.

Why This Matters For Leeds

This is a useful signal about where the investment sees value in Leeds. The trend has been converting tired offices into homes, so a professional investor doing the opposite, buying an office with residential consent and choosing to keep it as workspace says something about demand for quality city-centre space. It should reassure occupiers worried about shrinking supply, and it keeps active retail frontage on a key Headrow pitch.

What MCR Plans for 42 The Headrow

MCR intends a comprehensive refurbishment, letting the building under its original Headrow House name and bringing the vacant upper floors back into use as quickly as possible. The ground floor stays in retail use, keeping an active frontage. Floors one to seven will offer leased office space aimed at larger occupiers, while floors eight and nine become serviced and flexible workspace for smaller and growing businesses. The building will also anchor a new national workspace brand MCR is developing, designed to let a company move from its first serviced desk to a leased headquarters without leaving the portfolio. Completed in 1955, the building sits opposite Dortmund Square, close to the city’s main retail, business and civic districts. The residential consent, secured by Watkin Jones in January 2025, had included a £2.4m affordable housing contribution and a rooftop garden.

“The existing residential consent provides the building with additional flexibility, but our strategy is clear. We will retain and invest in its established office use.”

— Martin Brown, Director of Commercial Property, MCR Property Group

A Bet on the Leeds Office Market

With a shortage of top-quality space in the centre and older, out-of-town stock being repriced, and much national commentary has focused on converting surplus offices into homes. MCR’s move suggests it sees enough occupier demand to back refurbished city-centre workspace. The Manchester-based group frames it as part of its most active year of commercial investment, alongside acquisitions including Manchester’s CIS Tower, Granite House and CityPark in Glasgow, Broadway Park in Edinburgh and Windsor House in Harrogate. The signal is clear: a serious investor is backing Leeds offices.