Office occupier take-up across Leeds city centre totalled 109,682 sq ft in Q4 2016, a fall of 12% from the previous quarter. Grade A space accounted for 71% of activity, illustrating occupiers’ continued appetite for modern office accommodation. Professional and Financial Services continued to dominate the market, accounting for 48% of transactions combined. However, the TMT sector remains increasingly important, representing 24% of the total transactions.
Out-of-town, take-up was down some 50% on the previous quarter, reaching just 28,942 sq ft. Indeed, 95% of all transactions were for space sub-5,000 sq ft, which explains the somewhat poor performance. In line with the city centre, the TMT sector was a key contributor of activity, accounting for 50% of the transactions concluded.
While the EU Referendum result may have dampened occupier confidence, the structural imbalance and lack of significant lease event activity was the greatest barrier to the growth of the city centre office market during 2016. Conversely, the out-of-town market performed relatively well, up 14% on 2015’s total and above the 10-year average.
Looking ahead, 2017 has the hallmarks to be a phenomenal year for Leeds’ office market. With the anticipated Government Hub requirement, a raft of upcoming lease events, and the relative ‘value for money’ the city offers occupiers looking to rebalance their UK footprint, the city is well-positioned for growth.