Homes the focus of city’s construction

The Leeds Crane Survey by Deloitte Real Estate, shows a mixed bag for the city.

There are strong levels of construction in residential, student accommodation and education sectors, however the office sector has paused slightly over the last 12 months.

Residential

Residential developer confidence is high, with 2,832 units currently under construction. This is 600 more than 2018, a 21% increase, and is the second highest level of residential construction recorded since 2007, when there were 3,839 units under construction.

78% of residential developments under construction are for the build to rent market, the highest proportion in Leeds Crane Survey history. This increase in build to rent units follows the large amount of student accommodation delivered since 2016.

Office

Completed office space in 2019 totalled 578,373 sq ft just under the record levels completed in the previous year. This has the potential to create approximately 4,000 jobs in Leeds city centre.

However there has been a drop in the number of new starts with only three compared to the seven in 2018. 289,059 sq ft of office space across six schemes is currently under construction – a 64% decrease from the previous survey. With all new starts significant refurbishments rather than new build.

The Cranes survey further supports a report by Fox Lloyd Jones which stated the city could run out of Grade A stock.

Education and Research

In 2019, 419,758 sq ft of educational floorspace completed, the largest amount in the history of the Leeds Crane Survey, and a further 483,535 sq ft is still under construction.

The developments are across a number of higher education institutions including the University of Leeds, Leeds College of Building and Leeds College of Art.

In particular, there has been much investment in these under-construction schemes in facilities that support health, science and innovation. Leeds Children’s Hospital also completed its new Heart Theatre in early 2019.

Student Housing or Accommodation

2019 was also a record-breaking year for student accommodation with 2,799 bedspaces under construction. However only one student accommodation scheme completed in 2019, delivering 376 bedspaces.

Nolan Tucker, director at Deloitte Real Estate in Leeds, said: “Our latest Crane Survey shows that investors are looking more to the long term, as they focus on building more build to rent residential units.”

In contrast he said that in the office sector, “developers have taken their foot of the gas following record completions in the past two years”. But with occupier demand still high and limited development and planning permissions he anticipates the pipeline will “grow during 2020 to meet demand.”

He also expressed how collaboration between “is facilitating closer relationships with the private sector. For instance, the new University of Leeds Nexus Building enables businesses to connect with the expertise, talent and facilities at the university, working together to accelerate innovation and maximise business potential. We expect this trend to continue as the Leeds Innovation District gathers pace.”