Market snapshot

Office Market Pulse Leeds Q2 2014

Q2 saw a more subdued take-up in Leeds compared to Q1 with predominance of deals in the SME sector. Occupier demand remains relatively buoyant with larger transactions expected in the second half of 2014.

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In this issue:

Take up subdued but greater expectation for second half of year

Take-up in the Leeds office market in Q2 has been relatively subdued: a total of 103,729 sq ft transacted within the city centre this quarter, which is approximately 50% down in comparison with the same period in 2013.

Unlike last year the market has not yet recorded any significant pre-let transactions and there was only one transaction over 20,000 sq ft completed, compared with three in 2013.

The SME sector has dominated in Q2 and 73% of deals were for less than 5,000 sq ft. While take-up in 2014 is down on 2013, occupier demand remains relatively buoyant with a number of ‘larger’ corporate lead transactions expected to be recorded in the second half of 2014. 

A theme which has now become common place in the market is that more occupiers are attracted to high quality space, with only 16% of deals recorded in 2014 for poorer quality grade C stock.

Quality grade space supply has increased

Supply of grade A space in the city centre has marginally increased, as a number of building refurbishments have been completed, providing much needed space.

A number of obsolete and dated buildings have been acquired for redevelopment, reducing supply of grade B/C space. 

Availability of large floor plates remains limited, with only two buildings in the city capable of providing in excess of 15,000 sq ft.

Key transactions in Leeds Q2 2014


Size (sq ft) 

Landlord(s)/ vendor


St Johns Centre 24,242 Hermes Sanef
City Point 11,146 Aegon Ashcourt Rowan
One Park Lane 10,240 Credit Suisse Call Credit
Temple Point 5,000 Private Harron Homes
Alisa House, Turnberry Park 4,505 Claymore Group Lovell
Source: Lambert Smith Hampton

Rents expected to increase as supply decreases

City centre headline rents have marginally increased to £25.00 per sq ft compared with £24.00 per sq ft in 2013.  Rents in the out of town market have remained static at £16.00 per sq ft.

As supply of good quality stock reduces, lease incentive packages are reducing. As a result, we expect to see rents in the second half of 2014 increase in both city centre and out-of-town markets.

Office investment remains stable in 2014

The Leeds office investment market experienced another strong quarter: the quarterly investment volume increased by 30% to £50.3m compared to £35.2m recorded in Q2 2013. This follows a strong start to the year meaning that office investment volumes have already exceeded the total 2013 figure.

The most significant transaction was:

  • The sale of Commerce House, St Albans Square in Leeds city centre for £1.915 million reflecting a net initial yield of 11.40%. The property was fully let to Trustees of Unison and the Foundation for Credit Counselling with a 7.6 years unexpired.

The most significant outside Leeds was:

  • Standard Life’s acquisition of Kings Pool in York for £43.5m reflecting a net initial yield of 5.90%. The office scheme comprises 142,221 sq ft let to a number of government departments on long term leases.
View our latest 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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