The Leeds property market could look considerably healthier in 2013 with take-up figures for office space in the city centre set to significantly exceed the 10-year average.
Major corporate occupiers in talks over significant pre-lets
City centre office take-up in 2013 looks set to exceed 500,000 sqft this year well ahead of 2012’s 414,000 sqft and 2011’s 388,500 sq ft. A number of occupiers are already committed to some very significant lets in the city centre, including the KPMG deal for 60,000 sqft at Muse Development’s Sovereign Street site which will lead to an extensive regeneration of that part of the city centre. There are also rumours that talks are advanced with another professional services firm for 100,000 sqft at the same development.
Discussions are also well advanced between MEPC and Schulman’s Solicitors which will see the legal practice commit to between 30 and 40,000 sqft of office space at Wellington Place which could effectively restart the development at this key city centre location.
Ongoing shortage of grade A space to kick start pre-let market
In fact, currently, the only real constraint in the market is the ongoing lack of grade A office space in Leeds, which is the same challenge faced by many other regional centres. However, this may be alleviated to some extent by the space which will eventually be vacated by KPMG and other city centre pre-lets when they move, although it could take two/three years for this to become available due to the timescales associated with the development process.
When the pre-lets are secured, they will provide the investment market with the type of grade A investment stock that investors and funders are crying out for but which for the last few years has only been available in London.