Steady start for office market

YORKSHIRE’S office market has made a “cautious start” to 2010, according to several new pieces of analysis.

Property consultant Ryden said office take up in Leeds city centre over the first quarter of 2010 was down by 39% from the final quarter of 2009.

However, Ryden said take up had been affected because of a number of large deals in the latter half of last year, including a 57,000 sq ft letting to Yorkshire Water.

Ryden said second quarter take up was likely to exceed that of the first quarter.

In the out of town market, take up is still recovering from 24,000 sq ft in the second quarter of 2009 but has made “steady progress” to 61,000 sq ft, Ryden said.

Knight Frank’s Regional Office Market Presentation (ROMP) said the office vacancy rate was 12% in 2009 and in Sheffield 12.5% over the same period.

The figures compared relatively well to other major centres in the UK.

Prime rents in the first quarter of 2010 were £24.50 in Leeds and £18 in Sheffield, according to Knight Frank.

In a separate piece of research, Sanderson Weatherall said the the Leeds city centre office market had made a “cautious start” to 2010 with take up figures for the first quarter 25% less than the first quarter in 2009.

Glenn Levison, partner in office agency at Sanderson Weatherall in Leeds, said: “2010 is off to a careful start as the number of deals and floor space occupied in first quarter indicate. However, there is still activity in the market with Grade A office space such as King Street being occupied and we expect accommodation that is well located and offers flexible terms to continue doing well this year.

“The bulk of requirements currently on the market are still for smaller office space and this is representative in the number of deals.

“The (Leeds City) Council’s decision on its 100,000 sq ft office space requirement is expected shortly, but there is still no guarantee that the Council will relocate. If it chooses to then this could provide a big boost for the market and would help the 2010 take up figures.

“I expect that as the year goes on that market take up will improve and I am hopeful that the general election will instil confidence in the market as a whole, which in turn will encourage movement again.”