The Leeds city centre office market saw one of its best results for the year 2017 with leasing topping over 1 million square feet for the first time ever. Colliers International reports that one take-up deal was for 378,000 square feet of pre-let space by GPU at 7 & 8 Wellington Place. The total amount of take-up space without the Wellington Place arrangement included was at 636,615 square feet which is still an increase of 19% on a ten-year average. Media & Tech, financial and business services saw the highest take-up space with these three sectors responsible for 60% of the transactions for accommodations in 2017.
The analysis shows that 68% of all transactions, 96 in all, were for 0 to 3,000 square feet an bringing an increase of 38% year-over-year. Six transactions were for for the size range of 25,000 square feet with a total of 586,987 square feet or 58% of the take-up.
For 2017 the rents for Leeds commercial property hit a new high of £30.00 per square foot.
For Grade A property in 2017 new and refurbished accommodations for the Leeds city centre had a gain of 235,880 square feet. Most notable are the new properties at Platform (Bruntford) that accommodated 120,000 square feet of space and 3 Wellington Street for MPEC and Hermes at 115,880 square feet.
New refurbished Grade A space is planned for completion in Q1 of 2018 and is expected to be near 40,861 square feet for 7 Park Row. Another expected completion is The Majestic with 65,000 square feet being developed by Rusbbond and expected for completion in the second half of 2019.
Vacancy for Grade A property is reported to be at sub 4% of the total stock but pending transactions are currently in the works according to Colliers.
The situation of supply keeping pace with demand in the Leeds city centre especially for prime office space is expected to be limited for 2018.
In the long term new city developments will be coming to market including Vastint’s former Tetley Brewery site, CEG Southbank the SOYO development by Caddick Developments. These developments will bring the much needed large scale mixed use properties to the brownfield areas.
With the exception of the 7 Park Row development the outlook for new or refurbished Grade A prime office space is expected by Colliers to be ‘sparse’ as there are no developments scheduled to come on the market for 2018. Should the local market remain favourable for businesses it is expected that landlords will increase speculative developments for Grade A accommodations in the second half of 2018.
In its review for the Leeds city market Colliers predicts:
‘There remain a healthy number of live requirements within the market place, and as such we expect favourable take-up to continue into 2018 with Q1 figures expected to exceed the 5-year quarterly average.’
‘Leeds will remain attractive to both ‘north-shoring’ initiatives and footloose’ occupier requirements as the cost of real estate and employment remain extremely competitive when benchmarked against other major regional cities.’