Lambert Smith Hampton's (LSH) National Office Report 2008, which researched 28 centres nationwide, showed that take-up in the office market peaked during 2007.

Yorkshire has experienced strong and improving performance over the past few years, with Leeds seeing a 600,000 sq ft take-up in 2007, up some 435,000 sq ft over the previous year.

Despite the challenging climate, the report said that prime Leeds rents are expected to rise from £27 per sq ft by the end of the year.

Robin Beagley, director at LSH's Leeds office, said: "The economy has undoubtedly slowed and this will impact on the office market, however the city-centre occupier market still remains steady, and predictions show that some growth is expected in rents over the course of the year.

"Overall, vacancy rates are only around nine per cent, and with a limited number of new-build offices scheduled for completion during 2008, the city will see some much-needed Grade-A supply. Despite the uncertainties in the global credit markets, the prospects for Leeds during 2008 remain positive and deals are still being done."

Some of the largest deals over the last year include Ernst & Young and BDO Stoy Hayward's take-up of almost 40,000 sq ft at Bridgewater Place and the take-up of 13,500 sq ft by Walker Morris in the city centre's Bank House.

The report noted that despite earlier concerns about a potential under supply of Grade-A space, the traditional city-centre boundary is expanding, and new developments, offering greater floor space, have been constructed outside the traditional office quarter, including Clarence Dock to the south-east of the city, and Latitude Red, to the west.

The major schemes set to be completed this year include HBG Properties' Latitude Red, on Whitehall Road, bringing 121,944 sq ft to the market, The Mint, by Deltalord, offering 115,000 sq ft, and the 153,500 sq ft Broad Gate scheme.

The largest of the future opportunities for Leeds is the area sandwiched between Wellington Street and Whitehall Road, which is
being marketed by the West End Partnership.

Wellington Place is the most significant part, comprising a 22-acre site which will provide in excess of 3m sq ft of offices, residential, hotel, retail and leisure uses with major new public spaces.

In addition, there are a number of office refurbishments within the central business district. Fountain House, the historic 1930s art deco-styled building at the heart of Leeds city centre, has already secured a hat-trick of lettings following completion of a £5m refurbishment.

According to the report, the impact of the credit crunch and the economic slowdown is likely to be most felt in London, with 11m sq ft of space under construction in central London, which is expected to push up vacancy rates.

In the rest of the UK, Bristol, Birmingham, Manchester, Leeds and Glasgow account for more than half of the space under construction. However, in all of these centres, supply of existing new space is very tight, with the vacancy rate on brand new space below three per cent.

Dr Arezou Said, head of research at LSH, said: "Occupier demand will hold the key. Provided this holds reasonably well, we can expect the supply scheduled for delivery in the next 18 months to be absorbed, especially since the credit crunch and the removal of the empty rates relief will put the breaks on speculative construction starts in the coming months, resulting in little new development in the medium term."

Meanwhile, LSH and Carter & Co have secured a hat-trick of deals this month at Howley Park Business Village, in Morley.

LSH has confirmed a further three deals on the self-contained offices have been secured, creating almost 50 new jobs.

The three new occupiers, Tel-aer Services, Time Limit Interiors and Syke Direct, join existing tenants Arena Legal, AA projects, Impact Control and MyText.co.uk.