Leeds boosts office take-up to five year high

CITY centre office take-up in Leeds in the final quarter of 2013 hit twice its quarterly average, making it the best performing city outside of London.

According to the quarterly regional office market report by GVA, Leeds’ success is yet another sign that the regional commercial property market is on the up.

The Big Nine reports that in 2013, GVA’s nine city centres – including Leeds and all major cities outside of London – recorded the highest level of annual office take-up within the last five years, at a total of 4.82m sq ft.

Leeds followed an impressive first half of the year with its highest level of activity in the final quarter, with office take-up totalling 259,111 sq ft, 76% above its five year annual average.

Significant deals in Leeds this quarter included Leeds City Council committing to 170,000 sq ft – of which 50,000 sq ft is additional space – in a complete refurbishment of Merrion House.

KPMG also agreed to take the remaining grade A space at Broad Gate.

Office take-up in the out-of-town markets also recorded the highest annual total in five years; Q4 recorded 804,500 sq ft, 29% above the five-year quarterly average.

Leeds out-of-town take-up in 2013 was more than double its five year annual average, following the White Rose Park and Leeds Valley Park deals at 60,000 sq ft and 81,911sq ft respectively.

Matthew Tootell, director of national offices at GVA, said: “It is clear both from investor sentiment and the levels of occupier demand that the UK’s regional cities are once again beginning to push forward. However, moving forward there are clear constraints which will curb new speculative office development. Whilst we have seen the early signs that this market is returning, there is clearly going to be a looming shortfall in Grade A availability. This will provide selective rental growth during 2014 onwards and investors are now more willing to consider an increased exposure to risk where the right levels of return justify it.

“From an occupational perspective there are now a fairly significant number of deals close to finalisation which suggests that we should see 2014 being even better.”