City centre’s office take-up will ‘easily’ outperform 2012 levels
LEEDS city centre office take-up in 2013 will easily outperform 2012 and for the first time in six years will be on a par with pre-recessionary levels, according to new figures.
Research by property adviser BNP Paribas Real Estate also says that 2013 Leeds out of town take-up is expected to reach 440,000 sq ft, well ahead of last year’s level.
BNP Paribas Real Estate’s head of Leeds office, Richard Dunhill, said: “Total Leeds office take-up between Q1-Q3 2013 reached 829,000 sq ft, up 36% on the equivalent period a year earlier. This rise has been driven by strong transactional activity in the city centre, with three exceptional deals over 60,000 sq ft completed this year. In 2012, there was just one deal of this magnitude.”
Jo Warren of BNP Paribas Real Estate’s research department, added: “Total investment in Leeds offices has already surpassed the 2012 level, reflecting investor appetite for quality regional assets. Q1-Q3 2013 Leeds office investment totalled £120.9m, double the £60.2m transacted between Q1-Q3 2012. This upturn in activity reflects the growing investor appetite for good quality, secure regional assets offering attractive yields.”
Whilst it has been a positive year for the Leeds office market, the pick-up in market activity levels should not be over exaggerated, says BNP Paribas, as market confidence is rising, but there is a degree of caution overhanging the recovery.
“Developers still won’t commit to speculatively developing a new building without signing a significant pre-let, instead preferring the less risky option of speculative refurbishment,” added Dunhill.
At £25.00 per sq ft, Leeds headline office rent remains unchanged.
Favourable incentives continue to be offered to attract tenants but with anticipated rising competition for premium grade A space, levels may soon start to reduce whilst rents start to rise, said BNP Paribas.