Strong year of growth for city’s development sector

Leeds’ development market continued to demonstrate growth in 2023, with 16 new starts beginning in 2023, according to Deloitte’s annual Crane Survey.

The city delivered a robust workspace performance and the residential market remained buoyant supported by the student accommodation sector which delivered another record-breaking year.

Leader of Leeds City Council, Councillor James Lewis, said: “Our city centre continues to grow at an exciting pace, with development showing demand across a range of sectors.

“This demonstrates progress towards our continued ambition of creating a greener and better-connected city centre community, nurturing an environment which brings our neighbourhoods closer to jobs and opportunities.”

Offices  

In 2023, 698,996 sq ft of office floorspace was delivered across three schemes in Leeds city centre. This is a six-fold increase from 2022 when only 97,702 sq ft was delivered.

The city’s South Bank area experienced a particularly strong year for office development, with 385,702 sq ft of floorspace delivered in 2023.

Despite the record-breaking increase in office completions, there was a slowdown in new starts, with one office scheme starting construction in 2023. Total amount of office space under construction also fell to 287,013 sq ft from 858,448 sq ft in 2022.

However, demand for Grade A workspace has continued to grow, with an increase in office refurbishments recorded.

Ellen Sanderson-Clark, assistant director at Deloitte said: “As with many other cities, office refurbishments are on the rise. This is likely driven by changes to office energy efficiency ratings, with offices now required to be at EPC B rating or higher by 2030.

“As business commitment to hybrid working patterns looks set to stay, a move to higher-quality, collaborative office spaces is also likely driving refurbishment activity.”

Residential  

Leeds’ residential market delivered healthy results in 2023 with 15 schemes under construction compared to 11 in 2022.

This comes at a time of strong performance for the residential market, with 5,274 homes delivered since 2018. This level of development is set to continue, with 2,123 new homes on track to be delivered in 2024.

Central Leeds experienced a particularly strong year in 2023, with all three new residential developments commencing in the city.

Outside the centre, the South Bank saw the highest number of units under construction in 2023, with 1,261 homes currently on-site. The North-East Fringe area also currently has 898 residential units under construction.

Nolan Tucker, director at Deloitte, said: “Across Leeds we’re seeing how the residential market is maturing given the recent high levels of development.

“There’s now a renewed focus on diversifying city living, to create vibrant and inclusive neighbourhoods to reflect Leeds’ growing population.

“We can also look forward with interest to the outcome of the newly formed partnership with Homes England. The city has been awarded £2.2m to invest into growing new neighbourhoods across the city.”

Education

For the second consecutive year, Leeds experienced a record-breaking year for student development, with 3,704 beds under construction across 10 schemes.

This is an increase of 12% from the previous record of 3,294 beds in 2022. The Purpose Built Student Accommodation (PBSA) pipeline also remains strong, with 1,558 beds commencing construction in 2023.

This follows a period of significant growth in the sector, with 5,271 student beds delivered in the crane survey area since 2018.

The city has also seen two new educational use schemes starting construction, with the Leeds Mathematics School and the Leeds City College Mabgate Campus further improving education facilities within the city.

The announcement of the Innovation Arc in the west of the city centre will also support Leeds as a growing hub for STEM student numbers.

Tucker continued: “The construction of new educational facilities will help to further the city’s proposition.

“Leeds City Region now houses more STEM students than anywhere outside of London so notable developments and investment will continue to help attracting the best talent to Leeds and complement sectors including Fintech, life sciences, health, and digital sectors.

“By further creating world-class facilities, Leeds will be able to hold its position as a hub for education and research outside of the capital.”

Outlook

Sanderson-Clark added: “With 16 new projects commencing in 2023, the development pipeline for 2024 is set to generate further growth for the city across the residential, retail and office development markets.

“This year’s Leeds Crane Survey suggests market conditions are likely to create a new development cycle in 2024.

“We saw how Leeds2023 helped the city gain international attention for its dynamic cultural offering, and we now expect this to accelerate on the back of the recently announced Investment Zone and focus on the city’s innovation offer.”