‘Leeds has delivered a record year for take-up and more is yet to come’

The property market in Leeds has delivered a record year for take-up and more is yet to come, the CBRE’s national research director for the organisation said.

At CBRE’s annual market review held in Leeds last night, Andrew Marston said that the results of this outstanding year were driven by the fact that the public sector has begun to invest in property across the UK once again.

Specifically in Leeds, he said the recent announcement that HMRC and NHS Digital will take up significant office space in Wellington Place could “skew” this year’s figures because of the dramatic effect that this has had on the market but that he still expected steady growth in future years. “We are three quarters of the way through the year and Leeds is already breaking the record.”

Total take-up of office space in H1 2017 in Leeds was in excess of 750,000 sq ft – a 96% difference when taken on a five year average and the highest growth when compared to cities including Edinburgh and Manchester. He said there had been 400,000 sq ft live requirements for units of 10,000 sq ft plus.

In terms of returns, Martson said: “We are expecting returns for all of the property market to do better this year than last, which has surprised many of us. The industrial sector has been the best performer and we are still expecting industrial space to do well.”

In terms of occupier demand, Marston said Leeds was one of ten regional cities “ahead of the pace.” In Leeds, 54% of office take up was by public sector/regulatory bodies.he next largest sector has been businesses services, making up 15% of the market . Professional and creative industries both took 9% each.

 

 

Investment in the regions has been healthy since the recovery from the financial crisis of 2008. Investment volumes increased up to pre-crash levels in 2014, and are set to have a healthy 2017 after a strong start to the year.

The six biggest city office markets outside London all look set to perform well with an average 3.4% growth anticipated by 2022, equating to an extra 41,000 office based jobs. Of these 41,000 new jobs, Greater Manchester is expected to account for 15,800, followed by Leeds with 6,600.

The retail market in the UK is still one of the most attractive in the world. Two recent CBRE reports place the UK in the top three indicators of retailers’ interest in expansion.  Victoria Gate in Leeds, the £165m development by Hammerson, offers an even 50:50 split of retail to dining and it has been estimated that over the next ten years this centre will attract more than £82m worth of investment into the city.  The CBRE’s report said: “The mix of luxury retail, coffee shops, evening dining and a casino add a different element to a city that has already seen a boost in retail from the opening of Trinity shopping centre.”

Retail and leisure remains an integral part of the offer to residents and visitors to cities. As Leeds has already demonstrated, a focus on high quality design, a diverse mix of good retailers and a high ratio of food and beverage provision versus traditional retail, can have a significant impact on city centres.

Marston added: “The UK regions are looking stronger than ever, with high levels of investment, active development and a wide variety of planned infrastructure.

Alex Hailey, associate director, CBRE’s office agency team in Leeds commented: “A number of major new retail, leisure and office schemes have contributed to the significant development success in Leeds over the past 5 years, which has transformed into a fantastic and thriving city to live, work and play.

“The city can only go from strength to strength, supported by the planned future investment in its transport infrastructure and in particular the redevelopment of Leeds City Station. It’s also regarded as one of the largest financial districts outside London and we anticipate Leeds will be attractive to key sectors such as technology and media and we’ll see major growth in these areas.

 

“Grade A office stock is becoming limited with circa 500,000 sq ft available, which based on historic figures is around two years take up.  However, it is encouraging to see other major sites such as CEG’s, South Bank mobilising to accommodate future demand and investment in the city,” continued Alex Hailey.

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