The second quarter of 2019 saw 213,341 sq ft of office space taken up in Leeds city centre, a 47% increase on the same quarter last year, new figures reveal.
According to the Leeds Office Agents’ Forum (LOAF), 27 city centre office transactions completed in Q2 2019, with the largest of these being the 135,915 sq ft pre-let to Sky Betting and Gaming/The Stars Group at 4 Wellington Place, which is due for completion in autumn 2020. This is the largest office letting to complete in Leeds since 2017 when the Government Property Agency acquired its 378,000 sq ft new hub building on the same scheme.
Continuing the interest in the city from co-working/service office providers, Regus Spaces acquired 23,428 sq ft in 7 Park Row, which was the only other city centre transaction above 10,000 sq ft. Leeds did however welcome a new entrant to the city with Credit Karma taking just over 8,000 sq ft of office space at 6 East Parade.
Commenting on LOAF’s Q2 data, Jeff Pearey, director at JLL, said: “At the half year point, city centre transactional volumes already total 435,659 sq ft, 29% higher than the same time last year. Despite some of the wider economic and political uncertainty, Leeds is certainly continuing to buck the trend with ongoing office requirements looking to be satisfied during the remainder of 2019. Looking ahead, we anticipate occupier activity will match, if not exceed, last year’s total of 663,233 sq ft.
In comparison, the out-of-town market witnessed more subdued activity. 18 office deals completed in Q2 and take-up reached just 34,103 sq ft.
The Forum continues to highlight the lack of new Grade A offices as a key issue for occupiers wanting the best space in Leeds. In the city centre there is just 13,000 sq ft of new build standing Grade A space currently available at 6 Queen Street while out-of-town Lumina, at Thorpe Park, will complete this summer adding much needed new supply. As a result, the Forum anticipates office rental growth across the city for the rest of 2019 and potentially an increase in pre-lets, for larger businesses prepared to plan further ahead.
Roddy Morrison, director at Colliers International added: “Prime office rents in central Leeds are presently at the £30 per sq ft mark but given such limited supply we expect to see deals at rentals of £32 per sq ft by the end of the year, with further growth anticipated in 2020. This is still 10–15% behind prime rental levels in Manchester and also below smaller markets such as Bristol. As such Leeds continues to be hugely competitive in comparison to other regional office markets and offers the most competitive office rents and total office occupation costs among the big six cities outside London.”
The Leeds Office Agents’ Forum was established to collate and distribute definitive office market data. Its members are Avison Young, BNP Paribas, Bowcliffe, Carter Towler, Carter Jonas, CBRE, Colliers International, Cushman & Wakefield, Eddisons, Fox Lloyd Jones, JLL, Knight Frank, Lambert Smith Hampton, Ryden, Sanderson Weatherall, Savills and WSB.
