Leeds office market remains buoyant

The Leeds office market continues to be buoyant, accordingly to the latest figures released by leading global property consultancy Knight Frank.

Leeds city centre registered the biggest increase of any city in the UK in terms of occupier take-up in the first quarter of this year, with deals comprising 222,318 sq ft taking place.

This was up by 65% from the previous quarter and 58% above the 10-year quarterly average the highest level of take-up for a quarter since the end of 2017.

Eamon Fox, partner and head of office agency with Knight Frank in Leeds, explained: “The key to this substantial rise was the third largest deal of Q1 across all the regional cities, which was the 71,288 sq ft pre-let to Link Asset Services at Central Square. The financial consultancy’s decision to relocate means the Central Square building is now fully let.

“As a result, the professional services sector accounted for the highest proportion of take-up in the first three months of 2019. This was further supported by the 20,701 sq ft letting at 3 Sovereign Square to WYG Plc., which is also now fully let.

“Grade A availability fell to just 180,000 sq ft during the quarter, 46% below the 10-year average. The only new development delivered was the newly refurbished 33 Wellington Street of which 15,000 sq ft was available.

“New developments to be completed by 2020 include 4 Wellington Place and the first phase of CEG’s £350m South Bank scheme (Globe Point) which – in total – will bring 174,000 sq ft of office space to market,” said Mr Fox.

He added: “Prime rents have remained at £30.00 per sq ft since 2017. Our forecasts indicate an increase to £32.00 per sq ft by the end of this year.”

Investment volumes in the first three months of this year were £19.45m, comprising four deals. This total is 37% above the five-year quarterly average.

The sale of the Paradigm for £10.2m was the biggest transaction of the quarter. The building is the first speculative office building at the £162m Thorpe Park scheme. The park hosts more than 60 blue chip businesses, employing around 4,500 people. Tenants include: Pure Retirement, Wates Construction, EP UK Investments Limited and Renew Holdings. The second largest office transaction was the £7.1m acquisition of The Headrow by Strathearn Glasgow Ltd.

Domestic interest remains strong in Leeds’ city centre, accounting for 52% of volumes over the past 12 months.