Floorspace demand could start building spree

The Crane Survey also suggested that a burgeoning demand for floorspace means that property developers could be set to “push the button” on a number of speculative office developments in the city.

The amount of floorspace under construction in the city has risen by 68 per cent since last year’s survey, with a total of 147,000 sq ft spread across four schemes.

Among these is the 1 Sovereign Square development which has been let to professional services giant KPMG and 10 Wellington Place which is part pre-let to law firm Shulmans.

Demand in the first half of 2013 was high, said Deloitte, with office take-up reaching 438,000 sq ft – eight per cent higher than the total achieved in 2012.

Angela Barnicle, Deloitte real estate’s head of Leeds, said office and student housing developments were leading the way for new starts in 2013.

She said: “The rise in activity suggests growing confidence in the Leeds office market and we are seeing renewed optimism and vibrancy across the city.

“Despite the healthy level of activity in the regional office market, developers have thus far not rushed to develop new floorspace.

“However, Deloitte real estate research shows we could be on the point of seeing a number of speculative schemes starting, aiming to attract tenants currently faced with little or no choice of currently available floorspace.”

Looking at the retail scene, the Crane Survey said the opening of the one million sq ft Trinity Leeds development has been followed by the refurbishment of the Merrion shopping centre and the Victoria Gate development is due to start in 2014.

Residential developments in the centre, however, were quieter – no new residential schemes were identified in this year’s survey, resulting in no residential units being delivered in 2013, the first time in over a decade.

The only scheme to complete in 2012 delivered 82 units.

Ms Barnicle added: “There has remained a large supply of residential units since the boom period in 2007 – though this has now largely been absorbed, particularly by the vibrant lettings market.

“We do not expect this slow performance to last too much longer as the success of developments such as Trinity and the arena will entice both developers and residents to the city.”

The 13,500 capacity Leeds Arena held its first concert in July. In 2007, 3,800 residential units were under construction in Leeds.

The survey said that hotel development has been non-existent since 2012, with no new starts recorded. But the research identified a number of hotel schemes that will begin shortly.