Leeds office market set for record year
The office market in Leeds is going from strength to strength following massive lettings and the development of the city’s West End.
Office take-up is set to reach 800,000 sq ft in 2017, the highest year on record, according to Savills. Office lettings totalled 415,000 sq ft in 2016, dwn 25% on the long-term average.
This increase was boosted by the 46,000 sq ft letting to Burberry at Rockspring’s 6 Queen Street, the largest office letting in Leeds this year and setting a new milestone of £30 per sq ft.
HMRC and the NHS are currently understood to be under offer for in excess of 350,000 sq ft in the West End area of Leeds, bringing the full year take-up even further from the 550,000 sq ft predictions, bringing take-up to record levels.
The development of the West End has been a major contributor to this growth, said Savills.
With Central Square, Wellington Place and Whitehall Riverside offering space there is further development expected in the area over the coming years.
Several large organisations including Sky are looking at expanding or looking for new space, so the picture looks bright for the office sector.
Sky is reportedly looking for another 25,000 sq ft after having expanded from 40 to 650 employees in the past 18 months.
Grade A space will become more scarce and Savills predicts that only 130,000 sq ft will be in the market by the end of H1, and average Grade A take-up of 256,000 sq ft (23,782 sq m), Leeds will have just a six month supply of such space available.
This has prompted an increase in headline rents, to around £30 per square foot from £27.50.
Paul Fairhurst, head of Savills Leeds, said: “Leeds is set to have a great year, as the investment in delivering good quality office space and improving the fabric of the city has resulted in high profile and exciting companies vying for space. The city centre continues to expand south and west, as a number of mixed-use schemes are being brought forward.”
Clare Bailey, associate director in the commercial research team at Savills, added: “Leeds is an increasingly desirable location and there is a growing need for more city centre office development to keep pace with demand. The differential between top Grade A office rents in Leeds and the City of London is the largest on record and may well lead to even more occupiers following the lead of companies such as Burberry by relocating their back office functions to the city.”