Strength of Leeds' office market fuels next phases of the city's development, says Savills

The continued resilience of the Leeds office market is fuelling development within the city, says Savills, as Leeds enjoys record levels of take-up and ongoing rental growth in spite of wider macroeconomic headwinds.

Savills research shows that prime office rents for Leeds have grown by 3 per cent so far in 2023, reaching £37 per sq ft at the end of Q1, with the real estate advisor forecasting a further 14 per cent growth between 2023 and 2027.

This rise follows an already strong period, with rents growing by 20 per cent between 2019 and 2022, marking the biggest uplift of the ‘Big 6’ regional cities (comprising Leeds, Manchester, Birmingham, Bristol, Edinburgh and Glasgow).

The continued rental growth comes off the back of a particularly strong start to 2023 for Leeds, with take-up reaching 275,000 sq ft, making it the best Q1 on record (since Savills began tracking data in 2007). Savills notes that Q2 should also offer robust take-up figures, with a number of further pre-lets due for completion across the city.

Clare Bailey, commercial research director at Savills, comments: “The Leeds office market is continuing to defy the wider, more challenging, market conditions. The flight-to-quality narrative is evident across the city, with take-up for Grade A space reaching record levels last quarter, as businesses seek the best accommodation to attract employees back to the office whilst also aligning with growing ESG ambitions.”

Savills goes on to report that the strength of take-up across the city is resulting in a new wave of office developments, with a number of prime Grade A schemes cited for completion over the next two years.

These include 9 Wellington Place, the next phase of MEPC’s award-winning development in the city centre, as well as the significant and exciting commitment by Vastint to develop Aire Park, a new mixed-use district on the South Bank of the River Aire.

This week sees the commencement of the next office building at Aire Park, which will comprise 75,000 sq ft and is due for completion in early 2025, while 1 and 3 South Brook Street are due for completion at the end of this year.

Patrick Carter, head of office agency at Savills Leeds, adds: “The significant confidence in take-up is undoubtedly supporting developer activity across Leeds. When complete, this influx of new buildings will provide a much-needed boost to the supply of Grade A space within the city, driving rents upwards and offering occupiers an opportunity to acquire standout office space in one of the UK’s most exciting and dynamic markets.”

By Mark Adair – Correspondent, Bdaily

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