Leeds commercial property experts are optimistic for 2016

A PANEL of Leeds experts from Bilfinger GVA discussed everything from macroeconomics to the Wakefield high street at a commercial property event.

A full audience of business leaders from around the county attended the event at Aspire last week. 

The Bilfinger GVA experts said 2016 was looking to be a positive year for the commercial property market, with upturns in logistics and distribution, retail, both in and out of the main cities, and the growing regional office market.

In macroeconomic terms, growth may have slowed in 2015, but the panel suggested there was much to look forward to this year, with investment opportunities increasingly flowing in around Leeds and Yorkshire.

The Northern Powerhouse

Ben Hall, regional senior director at Bilfinger GVA, said: “The Northern Powerhouse is providing the opportunity for key northern cities, like Leeds, Manchester and Sheffield to collaborate. We now have one voice and this, combined with stronger markets all round, is helping to move the agenda forward.”

Industrial

Iain McPhail, associate, Industrial at Bilfinger GVA said: “In the industrial sector we are seeing headline rents increasing for the first time in 15 years as a direct result of regional market conditions.

“The market has continued to perform well in 2015, with several key transactions completing recently including one of the largest lettings of the year involving Bibby Distribution taking IDI Gazeley’s 281,000 sq ft G Park unit at Wakefield Europort.

“Internet and discounter retailers, as well as the third party logistics sectors are driving the big box market.

2015 saw two major retailers Poundworld and TK Maxx sign up to bespoke buildings along the M62 corridor taking space of 524,000 sq ft and 635,000 sq ft respectively.

“Along with rising rental values, we are also seeing incentives packages returning to pre-2008 levels. A strong 2015 take up performance, coupled with the current market conditions, increased developer confidence and a rising rental market may be the catalyst towards further speculative development during the next 12 months.”

Offices

Matthew Tootell, director, Offices at Bilfinger GVA said: “The office market in Leeds city centre is another positive story with the region performing significantly above national trend levels.

“Stand outs deals include Sky taking two lettings of 60,500 sq ft and 36,500 sq ft at Leeds Dock. Of the four schemes (totalling 450,000 sq ft) in the city centre due to complete this year, almost a third of the space is now let.

“Supply of brand-new prime space remains tight however there are a number of refurbishments underway, looking to satisfy the large number of requirements in the city. There is significant opportunity to raise rental value to £28 / £29 sq ft and bring Leeds to the same levels as cities such as Manchester and Birmingham.”

Retail

“There’s no denying that the city has had a fantastic year in terms of retail,” said Richard Padley, director of retail at Bilfinger GVA. “With the continued success of Trinity Leeds, a number of high profile names signing up to the long awaited Victoria Gate development, due to open October this year, and some high profile new lettings on Briggate, Lands Lane and Commercial Street, it really is a positive story for the city.

“Elsewhere in the region, the new Broadway Shopping centre in Bradford finally opened in November last year to huge success, securing some great names such as M&S, Superdry, H&M, River Island to name a few.

“It is still tough for occupiers and everything is still price driven but we believe the retail market in our region is in a good place with an extremely positive outlook moving forward.”

Investment

“There is a large amount of capital allocated to be invested in the regional property market, but we are not currently seeing investors under a huge amount of pressure to deploy the equity. That, coupled with landlords who are under no pressure to sell, could lead to a steady period in the transactional market. However, it is early in the year and inflows of money and buying strategy may change to accelerate liquidly,” Ben Hall, regional senior director at Bilfinger GVA finished.