THE site may still look empty, save for half a dozen diggers, tractors and cranes, but progress on the £150m Milburngate, on the site of the city's former passport office is ticking along. Faced with an asbestos riddled office built on a former gas works, the remnants of which were still lurking under the building, it was a slow process to demolish the concrete block and get it ready for work.

Having crushed the concrete, piling is ongoing to support the existing structures like Milburngate Bridge and Framwellgate Peth before the steel structure is finally erected in the coming months.

When complete, it is hoped the development will pave the way for a newly styled business quarter, attracting high quality jobs to the city and becoming a rival destination to Newcastle.

A mix of residential flats, a hotel, cinema, bars, restaurants, at the heart of the scheme is a 53,000 sq ft office block. Dubbed "One Milburngate", the building will be home to some of the first occupiers of this central business district, with modern offices aimed at the enterprises of the millennial generation.

Who they will be, no one knows at this stage, but Allan Cook, managing director of Arlington Real Estate, which is developing the site in partnership with Richardsons, seems nonchalant at the prospect. Despite the size of the premises, he is in talks with a single occupier, though it has been designed to accommodate several businesses.

"I'm a big advocate for Durham," he says. "I think it can attract occupiers but to build 53,000 sq ft of space without having an occupier is quite an ask.

“Having done soft market testing and knowing what else is on offer in the North-East I think we can fill it."

He adds: "In my day we wanted our own office but now it’s a much more collaborative environment which is an interesting change. It's the millennial generation.

“What we’re trying to do is offer that kind of environment. There’s nowhere else like that in Durham.

“I don’t think we will have trouble filling them. I get the feeling there’s a pent up demand for that kind of space."

Despite being unbuilt and largely without occupiers lined up, Milburngate sparked a bidding war between five London-based investment companies when it was put on the market earlier this year.

Eventually securing £120m of forward funding from LaSalle Investment Management, Allan describes the interest as almost unheard of for the North-East.

But what exactly about Durham – in truth more of a town than a city – has sparked this interest?

"When we were speaking to investors we didn't speak to anyone who didn't know about Durham," says Allan. "That doesn't happen when we've got schemes in places like Darlington or Teesside.

"I think it speaks volumes about what the city has to offer. Durham has a bit of a premium brand of its own. We want to build on that brand value. I think the quality of the environment is something to do with that.

"The university is another key thing. We’ve got a Russell Group university. We’ve had that in the past but nowadays business occupiers are looking for places with access to talent. People come out of Durham University and there’s a talent pool. If a business had a building in London or Manchester they’ve got a bit of competition."

In Allan's onsite portacabin office, there is a wooden model of Durham. With familiar details like Framwellgate Bridge, St Nicholas' Church in the Market Place and the viaduct, it contains a replica of how Milburngate will look in just over 18 months time when the first buildings in phase one are handed over.

But there are still some blank space, with just under a third of the six-acre site yet to secure detailed planning permission.

The success of the first phase will dictate the second.

Like phase one, it has outline permission for a mix of uses but the company will decide what gets built on the remaining 30 per cent when it knows more exactly what the demand is.

The key to its success is connectivity – both in terms of the city and wider region – says Allan, something that has not always come easily to those planning Durham.

"There are a lot of dead ends," he adds. "I see people arriving at the station all the time and they're looking around them because they don't know where to go. People get dropped off from coaches outside Walkergate and all they can see is a 40ft wall."

It means that vision through the development has been a priority since day one.

While the passport office was a block of concrete, when Milburngate is finished people will be able to walk through it, almost on a straight line from the railway station to Durham Cathedral. And if all goes to plan, there will be a new bridge crossing the Wear to avoid pedestrians having to use the often-congested Milburngate Bridge. It's why Freeman's Reach, opposite Milburngate, where the new passport office and National Savings and Investment building is, also developed by Arlington, already has infrastructure to enable the bridge to be constructed.

Should Durham County Council's plans to develop Aykley Heads as a business park, Allan hopes there will be scope for opening up more routes to make access between them as easy as possible.

"Connectivity is the key," he says. "At the minute there are people who work in Newcastle and commute from Durham. I can see people living in Newcastle and working in Durham and using the train to do it."