Q3 Leeds office take-up shrugs off wider uncertainty with another strong performance

1 Whitehall Quay, Leeds

Occupier activity in Leeds has continued to shrug off the wider political and economic headwinds with another strong quarter of office take-up, according to figures released by the Leeds Office Agents’ Forum (LOAF).

The third quarter of this year (Q3 2019) saw 142,915 sq ft of office space taken up in Leeds city centre, with 33 deals completed.

The TMT sector continued to build its growing presence in the third quarter with all four of the largest city centre deals coming from businesses in this sector. The largest was at Legal & General’s 1 Whitehall Quay where, IT and business consultancy firm, BJSS agreed a ten-year lease over three floors totalling 33,000 sq ft. The other three transactions above 10,000 sq ft were: the 26,000-freehold sale of Kidd House to Versa Studios, Red Kite Games leasing 12,496 sq ft at Park Row House and, ahead of its move to Majestic, Channel 4 agreeing a one-year lease of 11,700 sq ft at Bruntwood’s Westgate.

Eamon Fox from Knight Frank said: “Occupier activity in the Leeds city centre office market continues to be robust with take-up over the year to date at 578,574 sq ft which has already exceeded the 10-year annual average of 560,930 sq ft.

“While larger deals have ensured that Leeds will have another strong year for take-up, a two-tier market is in evidence with a more challenging environment at the smaller end.”

LOAF highlighted the ongoing lack of supply as a key issue within the market with only 34 Boar Lane due to practically complete this year, bringing 57,000 sq ft of grade A space to the city centre. Despite this, there will be nearly 145,000 sq ft of additional grade A space coming forward next year when the refurbishment of 1 City Square and 1 Embankment and completion of Majestic will help to address the supply shortage.

Meanwhile, Leeds’ out-of-town market saw somewhat of a resurgence in activity, with Q3 take-up reaching 91,010 sq ft and 27 deals completed. This compares favourably to the same quarter last year where 86,117 sq ft of office space was transacted.

Paddy Carter from Savills added: “Looking ahead, with headline city centre prime rents having reached £30 per sq ft, the outlook for the remainder of the year is for further rental growth, as supply shortages are likely to persist meaning that much of the speculative space being developed is likely to let before completion.”

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.