Activity in the UK’s key regional office markets strengthened significantly in the first half of 2013 (H1), with office take-up volumes of 3.4 million sq ft, up 43% compared to the equivalent period last year.
According to Jones Lang LaSalle’s research, outside of the South East, Leeds and Manchester were the strongest regional performers in this period recording take-up of 438,000 sq ft and 466,000 sq ft respectively. Combined, both accounted for almost half of all take-up within the Big Six regional markets monitored by the property firm.
Leeds has had an unprecedented start to the first six months of the year in terms of occupational activity which saw pre-lets to both KPMG and Shulmans in the first three months of the year and the second quarter saw a further five lettings over 10,000 sq ft
Jeff Pearey, head of office agency in Jones Lang LaSalle’s Leeds office, said: “Across the regional office markets we have seen far more significant Grade A deals completing in the first six months of the year. This was particularly apparent in Leeds where Grade A take-up accounted for 74% of all deals, compared to just 41% in the whole of 2012.”
According to Jones Lang LaSalle occupational confidence in the Leeds property market has been buoyed recently by improving economic news in the UK with strengthening sentiment indicators, buoyant retail sales and a recovery in employment over recent months.
Jeff Pearey added: “Whilst the outlook for employment growth is mixed across the UK with London expected to lead the recovery, growth in office jobs is not expected to be confined to the capital. Among the key regional cities monitored, independent research by Oxford Economics has highlighted Leeds as showing the strongest growth in office jobs over the next five years. This is superb news for our city and the on-going growth of our regional economy.”
Jones Lang LaSalle also points to continuing signs of confidence returning to the regional market with new speculative starts not only in Leeds but also, Bristol, Glasgow and the Western Corridor in the first half of 2013. Of the 2.1 million sq ft of space currently under construction across the major regional markets, 1.8 million sq ft is due to be delivered speculatively. The majority of this (70%) is not due to complete until 2014/15 with the result that Grade A supply is expected to continue to tighten over the short term.
