A surge in occupier demand for office space in Leeds last year has resulted in the best take-up figures for over 15 years providing further evidence of the recovery in regional leasing markets as economic conditions improve according to newly released data from the Leeds Office Agents’ Forum (LOAF).
According to office market data compiled by the leading commercial property agents in Leeds, 2013 occupier take-up in the city centre reached a full year total of 794,043 sq ft, the largest transactional volume for 15 years and a 96 per cent increase compared with 2012 (405,951 sq ft). Out-of-town activity reached 491,082 sq ft, a 44 per cent increase on the previous year (340,374 sq ft).
Specifically in Quarter 4 (Q4) transactional activity in Leeds city centre totalled 254,798 sq ft across 34 deals, a phenomenal 262 per cent increase on the same quarter last year (70,361 sq ft). Activity was boosted by two larger sized deals: Leeds City Council taking 50,000 sq ft of new, additional space at Merrion House and KPMG agreeing terms on 28,271 sq ft at Broadgate.
The out-of-town market recorded 200,987 sq ft in the last three months of 2013, a 203 per cent increase compared with the same quarter last year (66,370 sq ft). Of the 22 deals to complete, the largest was Lowell Group taking 81,911 sq ft at Leeds Valley Park.
Richard Dunn, Partner in Agency commented:
As we expected, Q4 take-up has been strong with some sizeable new lettings both within the city centre and out-of-town markets. In all, we’ve seen the best level of transactional activity for over 15 years; driven in part by improving confidence in the wider economy which has had a positive ‘knock on’ effect on occupier sentiment and ultimately their confidence to make property decisions.
The pre let market is well and truly back evidenced across the year by the deals involving Leeds City Council, KPMG and Shulmans. The level of smaller sized deals below 5,000 sq ft, of which there were 18 in the city centre and 16 in the out-of town market in Q4, shows that whilst encouragingly the activity has been driven by expansion we are continuing to see the usual churn of lease events and consolidation.
Whilst 2013 take up levels make for great headlines the supply of available new quality accommodation has obviously reduced even further with less than 200,000 sq ft of Grade A space currently available which is approximately just nine months average Grade A take-up. This extremely low level supply means that currently only one building can realistically accommodate a requirement over 30,000 sq ft. There is now a genuine opportunity for developers and property owners to focus on building speculatively and complete high quality Grade A refurbishments.
The Leeds Office Agents’ Forum was established to collate and distribute definitive market information. Its members include Sanderson Weatherall, BNP Paribas, Carter Towler, CBRE, Colliers International, DTZ, Eddisons, GVA, Jones Lang LaSalle, Knight Frank, Lambert Smith Hampton, Savills and WSB.