Rents rise for Leeds's prime office space but under-supply threatens

The City Centre Office Market Report Spring 2010, by property consultant GVA Grimley, found that prime office rents increased from 26 per sq ft to 27 per sq ft. It predicts a six per cent rise in capital property values across the UK this year.

Take-up of Grade A space reached 192,000 sq ft in 2009 – 30 per cent below the national 10-year average. Availability has increased marginally by 40,000 sq ft to 500,000 sq ft.

The most significant Leeds transaction was Yorkshire Water Service's 56,700 sq ft letting of Livingston House, at Clarence Dock

The investment market in Leeds improved and was noted as the seventh UK city for prime investment according to property funds.

However, as construction activity has fallen to only 100,000 sq ft, with the delivery of Wilton Developments 10 South parade, Crusader House and The Green Building, under-supply is predicted by 2012.

Dan Hodge, head of office agency at GVA Grimley's Leeds office, said: "We will...see an increase in the pre-letting for larger requirements, resulting in rising rents and falling incentives. Leeds could also benefit from the Budget 2010 announcement regarding the creation of a network of Government hubs around the UK; moving 15,000 civil servants out of London over the next five years.

"Inevitably, public sector cut-backs will also make themselves felt in the property market but this will also create opportunities as departments merge, relocate and use space more efficiently."