The Leeds office market saw its highest city centre quarterly take-up for 2022 in the last three months of the year and the strongest quarter-four on record for five years, according to data from the Leeds Office Agents’ Forum (LOAF).
210,321 sq ft of take-up across 36 city centre office deals were recorded in the three months from October to the end of December (Q4 2022), a 44 percent increase on the same quarter in 2021. This gives a full-year city centre take-up total of 618,207 sq ft, putting occupier activity on a par with the 624,192 sq ft recorded in 2021.
The 54,545 sq ft letting at 1 Trevelyan Square, off Boar Lane, by Leeds Trinity University was the largest deal to complete in Q4. According to the university, establishing a city centre base will complement its existing campus in Horsforth.
The letting to Arup, who is set to move into 35,829 sq ft of office space at 11 and 12 Wellington Place later this year, was another significant deal. It was also the largest transaction in 2022 to a professional services occupier.
Charles Preston from Colliers said: “Leeds’ city centre office market had its strongest Q4 take-up in five years and shows the bounce back in activity from occupiers. Many larger occupiers have renewed their workplace strategies after the pandemic, and we anticipate some significant additional deals completing in the coming weeks.
“Interestingly during 2022, there were four significant transactions from the education establishment, showing the activity in this sector of the market and the demand for city centre office stock.”
With office availability reduced in the city centre, the Forum says it is very likely that the market will see further rental growth in 2023. Prime rents are currently £36 per sq ft and, given Leeds remains at a discount to the other major UK cities, there is scope for this to increase and remain competitive.
The Leeds out-of-town market experienced a subdued final quarter with 60,631 sq ft of deals completed – a seven percent increase on the same period in 2021. 22 deals crossed the line in the last three months of 2022, giving an average deal size of just under 3,000 sq ft. Total 2022 out-of-town take-up was 271,629 sq ft.
Liam Ridley from BNP Paribas Real Estate added: “Recovery in the out-of-town market has been slower but is a function of limited Grade A supply rather than limited demand. Over 100 deals crossed the line over the course of last year, which gives every reason to be optimistic about the prospects for 2023.
“Business parks with strong fundamentals, like Thorpe Park and White Rose Park, will continue to perform well, underpinned by excellent on-site amenities, access to retail and leisure, and most importantly the arrival of rail halts at both of these locations within the next 24 months. Ease of access and ability to drive to work has continued to be motivating factors for businesses choosing out-of-town offices.”
The Leeds Office Agents’ Forum is made up of Avison Young, BNP Paribas Real Estate, Bowcliffe, Carter Towler, Carter Jonas, CBRE, Colliers, Cushman & Wakefield, Fox Lloyd Jones, JLL, Knight Frank, Lambert Smith Hampton, Sanderson Weatherall, Savills, and WSB.