Demand to do business in Leeds is apace as more than 580,000 sq ft of office space was let to companies in the third quarter of the year – a 10% increase on last year’s Q3 results.
Media, technology and business service sectors have dominated the take-up during 2019 so far.
Currently prime city centre vacancy stands at only 1.39% (176,470 sq ft) of the total market and overall vacancy is 7.29% (928,248 sq ft).
Roddy Morrison, Colliers International’s director of National Offices in Leeds, said: “The city is a really hot location at the moment; media and technology occupier demand continues to dominate, with new and existing occupiers looking to complement the likes of Channel 4. Prime space is really restricted which is going to have an impact on rents, most likely rising from £30 per sq ft to £32 by the end of the year.
“With only small spaces available, we’re seeing lots of sub-5,000 sq ft spaces being taken as well. Now is a prime time for investors to come to the city and regenerate the brownfield sites with mixed use developments to house these new businesses and their workers or renovate older buildings.”
During the last three months there were 27 deals completed for spaces below 5,000 sq ft, and in total in the first nine months of the year there have been 78 smaller space deals, amounting to 136,150 sq ft of take up. Grade B leasing activity also overtook Grade A this quarter representing 53% of total take-up.
The completion of 1 Leeds City Office Park (61,000 sq ft) has brought some much needed Grade A space to the city centre office market this year. Next year the new space coming through (513,471 sq ft) has already been snapped up by GPU at 7&8 Wellington Place and Stars Group at 4 Wellington Place. However, there will also be 89,954 sq ft of refurbished space becoming available.
Lisa Dean, associate director for research and forecasting at Colliers, added: “It is expected that business interest in Leeds is going to continue to grow over the next few years, particularly as the cost of property and employment is competitive compared to other regional cities. Future developments will provide much needed regeneration among mixed-use developments in the city centre.”