Market snapshot

Office Market Pulse Leeds Q3 2013

Take-up in the Leeds office market was very strong in Q3 2013, with 53 transactions totalling 195,360 sq ft, bringing the total for the year to an impressive 829,008 sq ft. With several large deals due to complete in Q4, including 60,000 sq ft to Lowell Group, we expect the end-of-year total to exceed 1m sq ft.

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In this issue:

Leeds office take-up to exceed 1m sq ft in 2013

Following a record breaking Q2 2013, Leeds’ combined city centre and out of town office take-up figure returned to a more ‘normal’ level in Q3, with 53 transactions totalling 195,360 sq ft. 

Take-up this year stands at an impressive 829,008 sq ft, compared with 610,064 sq ft at the same point in 2012. With several large deals due to complete in Q4, including 60,000 sq ft to Lowell Group, we expect the end-of-year total to exceed 1m sq ft.

Q3 witnessed the return of SME occupiers to the city centre, with two thirds of all deals completed for space sub-5,000 sq ft. City centre take-up levels are down 18% on the same quarter last year, to 101,100 sq ft. However, the year-to-date figure of 539,245 sq ft is 62% higher than the corresponding period in 2012 and is the city centre’s highest take-up since 2004.

The out of town market continues to perform well, with 94,260 sq ft of office space let or sold during Q3 – up 57% on the same period in 2012.

For a detailed breakdown of Q3 2013 take-up by grade, please click here or on Chart 1 to the left of this article.

Significant Leeds office lettings Q3 2013

Property 

Size (sq ft)

Landlord / Vendor  Tenant / Purchaser 
3 The Embankment, Sovereign Street

22,510

GE

NHS Leadership Academy

Kernal House, Killingbeck Drive

 13,261

Undisclosed Leeds City Council
17 Marlborough Street

10,958

Telereal Trillium PlusNet
Ground Floor, Vanguard House

 8,868

IM Properties  Civica
7th Floor, City Exchange

8,332

Land Securities

MASTA Healthcare

Source: Lambert Smith Hampton

Cranes return to city centre skyline but supply continues to fall

Total availability in the Leeds city centre office market reduced by 6% in Q3, and now sits at just over 1.5m sq ft - the majority of which is in the second hand market.

While cranes are returning to the city centre skyline - with Muse starting on site at KPMG’s One Sovereign Square and MEPC on site building Shulmans Solicitors’ new offices at Wellington Place - occupier demand is now outstripping supply by three times. With city centre office take-up set to exceed 600,000 sq ft by the end of the year, this situation will only worsen.

For a breakdown of Q3 2013 office supply by grade, please click here or on Chart 2 to the left of this article.

Supply and demand imbalance boosts city centre rents

Bolstered by the imbalance between supply and demand for grade A space, prime rents in Leeds city centre increased by 23% year-on-year in the third quarter of 2013 to £27.

Out of town, prime rents remain unchanged at £15 per sq ft.

For a breakdown of Q3 2013 office rental values, please click here or on Chart 3 to the left of this article.

How did the national investment market perform in Q3 2013?

Despite London’s relative expense, quarterly investment increased to almost £5bn, which was more than double the amount transacted in the first quarter of the year.

Regional investment levels in Q3 are the highest they have been since Q1 2011. Total investment was £3.71bn, a 14% increase on the Q2 figure of £3.24bn. 

Overseas investors purchased £4.16bn of UK property in Q3: the highest total since Q2 2012. However, early indications are that UK investors are ready to play a larger part in the market, accounting for 55% of the quarterly investment total: a 15 point increase on the 2012 average. 

What does this mean for the market? Find out in UKIT Q3 2013.

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Adam Varley

0113 887 6706

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Adam Varley
Director - Office Agency

0113 887 6706

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