Office shortage threat in Leeds

LEEDS is facing a potential shortage of top-class office space owing to the uncertain economic conditions, according to a new study. However, Jones Lang LaSalle's report, Reposition for Performance, argues that landlords should consider refurbishing Grade B office space to bridge the potential supply gap in the office market.

The report states that the credit crunch and global recession led "to the brakes being applied to speculative development".

As a result, UK development activity fell by more than 60 per cent between 2007 and 2009.

Many landlords in Leeds have been focusing on income preservation rather than refurbishment.

A Jones Lang LaSalle spokesman said: "However, with just 40,000 sq ft of office space under construction, and no further starts anticipated, there will be tightening of good quality space as take-up absorbs existing supply."

Jeff Pearey, head of Jones Lang LaSalle's Leeds office, said: "There is a growing awareness from occupiers and developers about the potential shortages of Grade A space that we forecast will emerge in Leeds during 2012.

"While Grade A supply in Leeds is relatively stable, one large transaction could quickly change the market barometer from 'feast to famine' and shape market sentiment regarding strategic refurbishment. Upgrading Grade B offices seems a logical, relatively low-risk strategy to bridge any supply gap."