Over half a million square feet of occupier demand is looking at Leeds
Over the last two years a lot has been said about how the pandemic has changed the future of the office.
TheBusinessDesk.com recently caught up with Eamon Fox from Knight Frank at the topping out ceremony of Globe Point, CEG’s first building in its Temple development at the heart of Leeds Southbank.
Fox noted that the narrative over the last two years has changed for the better.
“I think the pandemic has taught us that the office has a future and predominately in cities like Leeds and on schemes like Temple where exemplary buildings are being built.”
He explained it’s important to highlight the word “exemplary” as office users – the businesses and their employees – want more than just a place full of desks, they’re looking for local amenities and a building “that’s going to enhance their brand and speak about them as an employer”.
Fox noted that demand for space in Leeds remains high.
“We can track at least half a million square feet of occupier demand that’s looking at Leeds with some intent, with circa 170-200,000 sq ft of that imminent and in decision making mode.”
He also explained that despite the incumbent occupier base roughly downsizing by 30% when they relocate, the businesses are actually “upscaling the quality of space by 25%”, so the reality is people are “buying less but buying better”.
This continued demand means that Fox predicts office costs will increase from the current £34 per sq ft to £36 per sq ft by the end of 2022.
He added in comparison to Manchester which charges a rent of £42 per sq ft and Bristol £42.50 per sq ft making the city “good value for money”.
“It’s important to remember is “, Fox continued “occupational costs and the backbone costs of running any business are typically no more than 15 to 16% of that overhead, whereas people are 55 to 60%. So therefore, which is more important, so you can see maths, you spend a little bit more on property to improve attrition rates and get the best product, you’re onto a winner.”
