Our latest Leeds Office Market Pulse, which provides investors, occupiers and developers with detailed insight across the region, revealed that total annual take-up for the city centre exceeded 1m sq ft for the first time on record, while the out-of-town office market was relatively subdued in comparison.
Adam Varley, Director of Office Advisory in Leeds, commented:“2017 saw some very large deals take place. However, 2018 could be a challenging year for the Leeds office market; not as a result of reduced occupier demand, but due to the lack of supply across the city centre with only three schemes totalling 216,378 sq ft currently under construction. More crucially, the availability of grade A space within the out-of-town market is dangerously low. In the absence of any development activity, those occupiers with less than 18 months remaining until their lease events will not be able to rely on the pre-let market to satisfy demand and may find relocations exceptionally challenging due to diminishing availability."
A lack of high quality office stock to meet investor requirements has led to investment volumes being significantly down on the five-year average, at just £17m.
Luke Symonds, Associate Director – Capital Markets for Yorkshire, commented: “A number of high profile deals which would add considerably to volume have experienced slippage beyond the year end, such as Pinnacle in the city core and Lateral on South Bank, totalling £92m asking price.