Member Article

Time for speculative office development to start again in Leeds

Despite healthy take-up in the first quarter of 2014, activity in Leeds city centre has been more modest in the past three months, with take-up of 103,729 sq ft, according the latest research by property consultancy Knight Frank.

Elizabeth Ridler, partner specialising in office leasing at Knight Frank’s Leeds office, commented: “While activity in the first quarter of this year as a whole was down 44% on the same period last year, the Leeds market was characterised by a number of major deals in 2013 which pushed take-up to a record annual total”.

Ms Ridler said that she believed the time had now come for speculative office development to start in earnest in the city for the first time since the recession.

She commented: “The dynamics of supply and demand now unquestionably support the case for speculative development.

“There is without doubt a window of opportunity to capitalise on the significant number of upcoming lease events and also on the number of occupiers who are increasingly demanding a better product and are willing to pay for it.”

“With more cranes being visible in the city, we anticipate tenants to start ‘voting with their feet’ and show a strong preference for office accommodation located within short distance of the train station.

“Meanwhile, although rents have remained largely static, we anticipate the next phase of pre-lets to push headline rents upwards from £25.00 per sq ft to £26.00 per sq ft by the end of this year.”

Knight Frank research revealed that a total of 23 transactions had been completed between April and July this year, 17 per cent of which were lettings of over 10,000 sq ft and 26 per cent were in lettings over 5,000 sq ft.

Notable deals included Sanef Operations Limited at Hermes St John’s Centre (24,242 sq ft), which has resulted in the creation of 300 new jobs for the city; Ashcourt Rowan at Aegon’s City Point (11,146 sq ft); Sticky Eyes at 100 Wellington Street (11,800 sq ft); and Call Credit Information Group at One Park Lane (10,240 sq ft).

This was posted in Bdaily's Members' News section by Knight Frank .