Market snapshot

Office Market Pulse Leeds Q2 2013

Take-up in the Leeds office market reached 302,073 sq ft in Quarter 2 (Q2 2013), an impressive 40% increase compared with Q2 2012 when just 214,839 sq ft was transacted. This brings the half yearly total to 633,648 sq ft – up 48% on the same period last year.

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In this issue:

City centre drives big rise in take-up

Combined city centre and out of town take-up in the first half of 2013 was 48% up on the same period last year, at 633,648 sq ft.

Activity in the second quarter alone rose to 302,073 sq ft, an increase of 40% on the same period last year.

Yorkshire Building Society’s 76,413 sq ft letting at Highcross’ Broad Gate boosted the city centre take-up figure which, at 203,145 sq ft, was uncharacteristically high.

Out of town, take-up reached 98,928 sq ft, in line with the previous quarter, but some 39% down on Q2 2012.

For a detailed breakdown of Q2 2013 take-up by grade, please click here or on Chart 1 to the left of this article.

Key Leeds office lettings Q2 2013

Property 

Size (sq ft)

Landlord / Vendor  Tenant / Purchaser 
Broad Gate, 1 The Headrow

76,413

Highcross

Yorkshire Building Society

Broad Gate, 1 The Headrow

 25,389

Highcross CapGemini Financial Services
17 Malborough Street

21,042

BT PlusNet
2200 Thorpe Park

18,269

Commercial Estates Group Age Partnership
Part 2nd Floor, City Exchange

11,951

Land Securities QA Training

Source: Lambert Smith Hampton

Return of big ticket deals sees grade A stock diminish further

Total availability in the Leeds city centre office market reduced by 17% in Q2 2013, and now sits at 1.6m sq ft, the majority of which is in the second hand market.

At 226,850 sq ft, grade A stock accounts for just 14% of the total available space, representing just one year’s supply. 

There are now no offices capable of accommodating a requirement in excess of 35,000 sq ft available for immediate occupation.

For a breakdown of Q2 2013 office supply by grade, please click here or on Chart 2 to the left of this article.

Out of town rents show signs of recovery

Out of town prime rents rose to £16.50 per sq ft in Q2 2013, compared with £14.50 per sq ft in the corresponding period last year. This rental growth is restricted to a number of isolated locations where there is an undersupply of grade A specification, large floor plate buildings.

Prime city centre rents held steady at £26 per sq ft.

For a breakdown of Q2 2013 office rental values, please click here or on Chart 3 to the left of this article.

Leeds office investment volumes remain stable

The office investment market across Leeds remained stable during the second quarter of 2013. 

While total investment volumes fell marginally by 12% to £34.7m compared with £39.3m in Q2 2012, there continues to be healthy demand for the best product. The most notable transactions include:

  • British Steel Pension Fund’s purchase of 1 Sovereign Square for £25.2m, reflecting a net initial yield of 6.24%;
  • Leeds City Council’s purchase of St George House for £7m, reflecting a net initial yield of 5.76%; and
  • Commercial Estates Group’s purchase of three buildings at Thorpe Park for £6.5m from receivers.

To view our latest UK Investment Transactions (UKIT) report, please click here.

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Adam Varley | Director - Office Agency | Leeds
Adam Varley

0113 887 6706

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Director - Office Agency

0113 887 6706

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