Office leasing figures released by the Leeds Office Agents’ Forum (LOAF) show strong occupier demand continued in the third quarter of 2018.
Leeds’ city centre office market recorded 191,464 sq ft of take-up in the third quarter (Q3) meaning that the year-to-date total is 528,654 sq ft. This is comparable to the same time last year when city centre activity reached 557,990 sq ft by the end of September 2017, a total which included the 378,000 sq ft GPA deal. The Forum anticipates the end of year total will be in the region of 700,000 sq ft.
City centre activity across the three months from July to September was buoyed by two lettings at 3 Wellington Place: HMRC agreed terms on 60,000 sq ft of space and accountancy firm Mazars took 13,000 sq ft. Of the 39 city centre transactions to complete, four were over 10,000 sq ft.
Roddy Morrison, from Colliers International and LOAF spokesperson, said: “The positive momentum has continued in Q3 and, given the number of active occupier requirements, the Leeds office market looks set for another stellar performance. “Leeds is one of the regional cities in the running for Channel 4’s ‘National HQ’ outside of London and, if the broadcaster decides on our city, it would further underpin the quality of offering available within Leeds and help accelerate the case for further investment and development.”
“With Brexit negotiation deadlines looming, the Forum feels that our regional economy is both strong enough and diverse enough to keep performing at these levels.”
According to LOAF’s data, a total of 86,117 sq ft of offices was transacted across the out-of-town market between July and September this year. Two out-of-town deals over 10,000 sq ft completed: BUPA acquired 23,715 sq ft at Kirkstall Forge and Wates signed for 10,275 sq ft at Thorpe Park.
The Forum says that the office market remains characterised by a scarcity of new quality space. In the out-of-town market, Paradigm at Thorpe Park is now fully let as well as White Rose Office Park. In the city centre, only one building, Majestic, is currently on site with the construction of No 4 Wellington Place about to start.
Jill Goodman from GVA added: “HMRC’s acquisition was a sizeable letting, in the context of Leeds market, and leaves a limited amount of standing Grade A product available in the city centre. To satisfy future occupier demand, it is critical we see a response to this continued appetite for good quality product. With only around 66,000 sq ft under construction, which has not already been prelet, the onus is on developers to address the lack of new offices coming through.
“As a result of ongoing demand and declining supply, we could see prime office rents move up over the remainder of the year. Prime grade A rents are still at a discount when compared to the likes of Manchester and Birmingham though, and Leeds remains very attractive.”
The Leeds Office Agents’ Forum was established to collate and distribute definitive office market data. Its members are BNP Paribas, Bowcliffe, Carter Towler, Carter Jonas, CBRE, Colliers International, Cushman & Wakefield, Eddisons, Fox Lloyd Jones, GVA, JLL, Knight Frank, Lambert Smith Hampton, Ryden, Sanderson Weatherall, Savills and WSB.
