Welcome boost for Out-of-Town market whilst supply maintains stranglehold over city centre performance
After a strong start to the year, Leeds City Centre take-up slowed considerably in Q2 reaching only 56,440 sq ft (Q1 2011: 150,277 sq ft).
However, the Out-of-Town market experienced a welcome boost in activity as some significant requirements were finally satisfied resulting in total take up of 157,938 sq ft (Q2 2011: 54,436 sq ft).
These results mean that at the half year mark, total take up in both sectors (H1 City Centre: 212,287 sq ft & H1 Out-of-Town: 213,959 sq ft) is in-line with expectations and looking ahead the year should at least match 2011′s total. This is comforting news for those with an office or space to let in Leeds.
City Centre activity was down on the last quarter with fewer transactions and lower take up. Small transactions dominated with only one letting exceeding 10,000 sq ft.
For Out-of-Town, Education and Laboratory users accounted for the majority of office space taken with Leeds City College’s freehold acquisition representing the largest deal of the quarter.
The level of Grade A stock in the City Centre continued to contract and looking ahead, with several significant lettings expected to complete in Q3, the available options for larger occupiers in the prime core will be a very limited. Given the lack of readily available development finance and continued economic uncertainty, no new supply will be forthcoming without a significant pre-let.
This is providing a window of opportunity for buildings in the prime core and fringe areas that can satisfy such requirements. Looking further ahead, a good number of major professional and financial occupiers with lease events between 2014 and 2017 are currently considering pre-let options.
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