Call for "new blood" in the city to maintain property momentum
YORKSHIRE is performing strongly on take-up in both its office and industrial markets, but its prices remain below its regional competitors, according to CBRE.
In an otherwise upbeat assessment of the region’s performance delivered to property professionals at an event in Leeds, cautionary notes were sounded about the lack of inward investment and the sluggish take-up of office space at the smaller end of the market.
Jonathan Shires, CBRE’s senior director for office agency, highlighted the pre-lets in Leeds to PwC, Addleshaw Goddard and Equifax, as well as Sky’s forthcoming move into Leeds Dock, as evidence of the buoyancy of the city’s property sector.
“Leeds is doing really, really well, Take-up is up on the 10-year average and this year we are expecting it to go through 600,000 sq ft”, he said.
“What the city is missing is the 5,000-15,000 sq ft lets which really do drive this city forward.
“We need the difference in price between Grade A and refurbished to be much bigger – we are £6 cheaper than the other big six cities. This is great value for those mystic northshorers that seem to go everywhere but Leeds.
“We do need new blood into the city, we can’t keep relying on people moving within the city.”
Mr Shires brushed off concerns about oversupply, estimating that uncommitted new developments in Leeds are only the equivalent of 18 months’ take-up. In Sheffield the bigger concern is about the lack of supply of Grade A space.
“St Paul’s is the only development scheme currently on site,” he said. “Sheffield does need more Grade A stock but thankfully it is coming through.”
He expects the Sheffield digital campus will start work on one of its two buildings early next year following the announcement last week during Chancellor George Osborne’s visit to China of Far East investment in the scheme.
The region’s industrial market, particularly at the larger end, is also performing strongly with a number of eye-catching deals, including Poundland, TK Maxx and Great Bear.
“It is all good news for the region, the big shed market is definitely back,” said Mike Baugh, senior director of CBRE’s industrial agency.
“We tend to be 18 months behind the curve with the North West – we are at £4.75-£5 on big boxes while in the North West they are pushing £5.50-£5.75.
“In terms of take-up, we have come out of a period of massive over-supply. First half take-up in Yorkshire is at about 1.75m sq ft compared to our 10-year average of about 2.2m sq ft. We have had a really good year in Yorkshire.”
