Office rents ‘moving towards £28 per sq ft’, claim Knight Frank

KNIGHT FRANK is talking-up office rents in Leeds, suggesting prices are on the way up to an all-time high of £28 per sq ft.

Occupier demand, allied with the quality of new and refurbished space, is pushing rents up, according to its latest regional office market report.

Deals with Handelsbanken and FDM Group saw the companies take space at No 1 Whitehall Riverside at £26 per sq ft.

Eamon Fox, partner and head of office agency with Knight Frank in Leeds, said: “We are seeing the prospect of similar rents be achieved elsewhere in the city of high-quality refurbished accommodation and on new-build product. We are now moving in the direction of £28 per sq ft.

“Meanwhile the good news for Leeds continues. Investor appetite for regional office stock is strengthening. Not surprisingly, given the substantial weight of money targeting regional offices, the office yield, which is the annual return on an investment expressed as a percentage of the capital value, is a healthy 5.25%.

Nationally, given current named requirements of 4.58m sq ft, which is the highest in five years, we expect to see higher levels of occupational demand back above the five year average.”