Optimism on office market
THE Leeds office market saw 81,000 sq ft of office accommodation let in the last quarter of 2010, according to new figures.
The figure for October to December is 35% below average while the 283,000 sq ft transacted over the whole year is the lowest since 1992 and 42% down on the annual ten year average.
The figures are included in the latest Property Times UK Regional Offices Report from DTZ.
Christopher Murfitt, DTZ’s head of valuation for Yorkshire and the Humber, said: “Over the last three years development has all but ceased for new offices and as such there is now limited good quality, well located space. Thus occupiers are now receptive to potential pre-let options although at much reduced volumes.
“The added security offered by guaranteed income will assist meeting banks’ lending criteria to enable a resumption of funding to developers in the city centre.
“Out of town offices remain problematic with a high supply of vacant, modern accommodation and the weak occupational demand. This continues to present a problem to investors and developers alike and reinforces a developing two tier prime/secondary market. Even on a pre-let basis on medium term income, yields are not strong enough for development to proceed and banks remain cautious on their lending criteria.”
