2012 has begun with a renewed call for more prime office development as Grade A space in the prime areas remains at a low level with little new supply on the horizon.
At present, Leeds’ largest occupiers may soon have to make the choice between staying put and moving to a fringe location, unless new builds can be brought forward which is increasingly unlikely thanks to the continued restrictions on finance.
As far as plans go to tackle this within the industry, there is a continued emphasis on the forthcoming major lease events in the city that are due to take place between 2013 and 2017 that will hopefully lead to a shake up for the office sector.
The fact that businesses have to consider moving away owing to the lack of choice, serves only to highlight how office development in the city needs to make changes to ensure it moves forward in these uncertain times.
Slowly, we are starting to see developers approaching new projects differently.
As many will know, any speculative office development, even with a partial pre-let in place is problematic to fund, and lining up multiple office pre-lets to fill a building is extremely difficult. Hence, developers are once again looking closely at a mixed-use profile as a way of kick-starting their office schemes.
Whilst for some office occupiers the prospect of sharing their building with retail or leisure facilities is horrifying, it seems that mixed-use buildings could increasingly be the norm if building in the city is to progress.
One such scheme is Whitehall Plaza. Located at 1 Whitehall Road, it plans to combine a 130-bed Premier Inn with 50,000 sq ft of Grade A office space. Its make-up should provide greater financial certainty for investors with building work set to begin during 2012.
Indigo Blu is another example of a mixed-use building, notable for being one of the few to complete during 2011. The project unites over 10,000 sq ft of office accommodation with 46 residential apartments above.
While this type of scheme is not a new phenomenon, it is likely that smaller, new-build Grade A office and mixed-use buildings will become more prevalent, as developers strive to maintain a level of progress in the face of one of the toughest economies of recent times.
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