Office leasing figures released by the Leeds Office Agents’ Forum (LOAF) show a rebound in occupier activity in the third quarter of 2020 (Q3).
Following a subdued Q2 as Covid-19 impacted on occupational activity across all regional markets, Leeds’ city centre office market recorded a total of 88,507 sq ft of take-up in Q3. So far this year, 248,653 sq ft has been let in the city centre compared with 578,574 sq ft at the same point last year, a drop of 57 per cent, but there are encouraging signs with increasing occupier demand and schemes still coming forward to address the continued undersupply.
Of the 18 city centre transactions to complete in the three months to September two were over 10,000 sq ft. Law firm Knights took 22,000 sq ft at Majestic and the NHS agreed terms on 21,804 sq ft at 2 Park Lane. Headline prime rents have held up during the pandemic remaining in the region of £32.00 per sq ft.
Nick Salkeld from Fox Lloyd Jones said: “2020 started with a healthy level of leasing activity across most key regional office markets but, not surprisingly, this was followed by a subdued Q2. During Q3, we were encouraged by the number of new office enquiries in Leeds and many businesses still moving ahead, having got to grips with their spatial requirements.”
According to LOAF’s data, a total of 62,117 sq ft of offices was transacted across the out-of-town market between July and September this year. The largest of the 27 deals to complete was the 13,134 sq ft letting to Carlsberg at Unit 9, Temple Point.
The Forum cited that the office market remains characterised by a scarcity of new quality space which means the better buildings continue to remain sought after. However, the level of supply is also expected to increase as there is the potential for some tenant-released space to come back to the market, although this is not expected to address the supply imbalance.
Eamon Fox from Knight Frank added: “There are several new build and refurbishment schemes currently underway and scheduled to deliver workspace to the market over the next 12 months, such as Tailors Corner and 12 King Street. The evidence shows employers are ready for a post Covid-19 world, with the intention of creating an environment for employees to thrive in the workplace. The pipeline schemes point to a brighter future for mental health and well-being in the workplace – in our eagerly awaited post-pandemic world, Leeds is ready.”
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.