Market snapshot

Office Market Pulse Leeds Q1 2015

Office leasing activity for the combined Leeds city centre and out of town markets totalled 147,229 sq ft in Q1 2015 which is a 16% fall from the 176,042 sq ft of space let in Q1 2014.

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In this issue:

Grade A take-up lowest since Q4 2012

Office leasing activity for the combined Leeds city centre and out of town markets totalled 147,229 sq ft in Q1 2015 – a 16% fall from the 176,042 sq ft of space let in Q1 2014.

More notably, the volume of Grade A space let across both markets in Q1 2015 was 20% lower than that recorded in Q1 2014 and is the lowest volume since Q4 2012. This is, however, against a backdrop of falling Grade A availability, which is constraining occupier activity.

The city centre recorded a relatively quiet quarter, with leasing volumes down to just 87,689 sq ft – a 38% fall on the Q1 2014 total of 140,778 sq ft and the lowest level since Q4 2012.

In comparison, occupier leasing activity in the out of town market was up 69% on the Q1 2014, at 59,540 sq ft – albeit a marked decrease on the dizzy heights of Q4 2014.

Both markets continue to be underpinned by the SME sector, with only 24% of the total number of transactions for space above 3,000 sq ft.

Grade A city centre availability may fall to lowest level by end of 2015

At just under 700,000 sq ft, Grade A supply accounts for 38% of the total available space in Leeds city centre.

However, 472,809 sq ft of this is under construction and is not due to complete until 2016 – 51,000 sq ft of which has been taken out of the market following the recent announcement of the significant pre-let, to Addleshaw Goddard at 3 Sovereign Square.

Competition for the remaining Grade A space is fierce, with the top floor (6,900 sq ft) of the recently refurbished 21 Queen Street already under offer, and serious interest in the remaining 30,591 from an educational occupier.

It is possible that Grade A supply in Leeds city centre may fall below 200,000 sq ft by the end of 2015, with the market having to rely on Grade B/C space to satisfy the increased levels of occupier demand.

City Centre rents to reach £27 per sq ft by the end of 2015

The letting of 17,159 sq ft at No 1 Whitehall Riverside to FDM Group confirmed prime office rents at £26 per sq ft.

However, as the pinch on Grade A supply continues, we anticipate rents could reach £27 per sq ft by the end of 2015, making an even more compelling case for speculative development on a greater scale than has taken place to date.

Key occupational transactions


Size (sq ft) 

Landlord(s)/ vendor


Phoenix House, Millshaw Business Park 
Baptista SARL
The GORSE Academies Trust
5th Floor, No 1 Whitehall Riverside, Whitehall Road
17,159 NFU Mutual
FDM Group Holdings
5th Floor, City Exchange, Albion Street
Land Securities
Leeds Building Society
Progress House, Stanningley Road
10,291  Unknown  Motor Mile
Source: Lambert Smith Hampton

No sign of election slowdown

The office investment market in Leeds got off to a strong start in 2015, with the combined value of transactions in Q1 totaling £65.92m - a significant increase on Q1 2014 figure of £25.45m.

The most significant transactions were:
• Deltalord’s acquisition of The Mint on Sweet Street for £30m from Patron Capital Partners.
• CBRE Global Investors’ purchase of 27 King Street for £10m from Palace Capital plc.

View the latest edition of our UK Investment Transactions (UKIT) report.

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Adam Varley | Director - Office Agency | Leeds
Adam Varley

0113 887 6706

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Adam Varley
Director - Office Advisory

0113 887 6706

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