Market snapshot

Office Market Pulse Leeds Q3 2016

Office take-up across Leeds reached 191,265 sq ft in Q3 2016; a 28% increase on the previous three months and a 4% increase on the same period last year, suggesting that the majority of occupiers have adopted a ‘business as usual’ approach to their property requirements following the initial nervousness post EU Referendum. 

As the demand for grade A space continues, so too does the pinch on supply. However, the Practical Completion of Central Square, 5 Wellington Place and 6 Queen Street, along with the soon to be completed 3 Sovereign Square, will provide almost 300,000 sq ft of available grade A space, and will help satisfy any immediate requirements.  

This is causing upward pressure on rents, as grade A space is now available to the wider occupier market and not just those few corporates that have the ability to dictate terms using their size and covenant in the pre-let markets.

Want to know more about the Northern Powerhouse office markets? Download this Office Pulse in fullview our latest research report or open our app.

In this issue:

Leeds office market rebounds after initial post-Brexit blip

Office occupier take-up across Leeds reached 191,265 sq ft in Q3 2016; a 28% increase on the previous three months and a 4% increase on the same period last year, albeit some 7% down on the five-year quarterly average.

In the city centre, four sizable lettings of over 10,000 sq ft contributed to a respectable quarterly take-up of 125,321 sq ft, suggesting that city centre occupiers have adopted a ‘business as usual’ approach to their property requirements following the initial nervousness post EU Referendum.

Out-of-town, the letting of 45,647 sq ft at Darwin House, Leeds Valley Park to GFKL Lowell Group boosted an otherwise reduced level of activity.


Key occupational transactions, Q3 2016


Property 

Size (sq ft) 

Landlord(s)/vendor

Tenant/purchaser

Darwin House, Leeds Valley Park
45,647
XLB/Harbert Management Corporation 
GFKL Lowell Group
5th & 6th Floors, Whitehall II 
23,762
Cording 
The Department of Health
5th Floor, No 5 Wellington Place
12,969
MEPC
Ward Hadaway 

Source: Lambert Smith Hampton

City centre supply boosted by the release of 300,000 sq ft of grade A space

As the demand for grade A space continues, so too does the pinch on supply. However, the Practical Completion of Central Square, 5 Wellington Place and 6 Queen Street, along with the soon to be completed 3 Sovereign Square, will provide almost 300,000 sq ft of immediately available grade A space, and will help satisfy any immediate requirements.

Out-of-town, Paradigm at Thorpe Park and Kirkstall Forge will provide over 86,000 sq ft of grade A space once complete, which will hopefully reinvigorate demand from this section of the market going forward.


Leeds’ prime office rents remain robust

As the supply of much demanded grade A space is now available to the wider occupier market and not just those few corporates that have the ability to dictate terms using their size and covenant in the pre-let markets, we anticipate that rents within the city centre will see increase.

Rents in the out-of-town markets are still experiencing large-scale fluctuations between location-to-location and scheme-to-scheme. However, following Lowell’s acquisition at Leeds Valley Park the availability of grade A office space is at a tipping point with very little choice for occupiers. 



Two major transactions provide welcome boost to Leeds’ office investment market

Two major office investment transactions completed across Leeds during Q3, providing a welcome boost for the city and proving that the yield differential between other cities in the Northern Powerhouse still proves an attractive hunting ground for investors. 

While deals are taking significantly longer to complete, the appetite to acquire across Leeds remains strong but a limited stock supply means opportunities are few and far between, restricting the level of transactional activity.


Key investment transactions, Q3 2016


Property 

Value (£m) 

Yield (%) 

Investor

Vendor

3 Sovereign Square 
43.7
Unknown 
Leeds City Council
Bruntwood Estates & Kier Property
No 1 Leeds, Whitehall Road
34.17  6.67  Credit Suisse 
 Triuva 

Source: Lambert Smith Hampton

Want more information about this Snapshot?

Adam Varley | Director - Office Agency | Leeds
Adam Varley

0113 887 6706

Email me

Contact us now

Adam Varley
Director - Office Agency

0113 887 6706

How can we help?

Submit