Why things are looking up for Leeds's commercial property sector: Eamon Fox

So let’s look at the positive in Leeds. Leeds remains a magnet for quality workspace and talent. In the past five years, the city has welcomed national names and large employers such as Burberry, Channel 4, the UK Infrastructure Bank, and organisations on a recruitment drive such as insurance giant Markel and the Bank of England.

At the same time a number of high-profile law firms such as Brabners, Knights and DLA Piper have invested in the city, with DLA taking an 83,000 sq ft pre-let at City Square House, next to Leeds Station.

Meanwhile it is widely expected that rents for prime commercial offices in Leeds city centre will break all records this year, rising to £38 per sq ft.

This record-busting increase is down to a combination of quality new offices being either built or comprehensively refurbished and the increased pipeline of occupier demand, much of this demand is from those firms with an eye on the scalability of Leeds.

This prediction comes hard on the heels of the news that the office take-up in Leeds for the last quarter of 2022 was the highest for five years.

So why Leeds? There are many reasons, so I will be brief. With a population of more than three million and an incredible workforce of more than one million, Leeds is a thriving city offering a wealth of opportunities.

The city is blessed with excellent road and rail transport allowing easy access to London, Manchester, Birmingham, Scotland, and other major cities in England.

And, crucially, while the cost-of-living is a concern, it is far cheaper to live and work in Leeds than in the south of England.

Meanwhile Leeds Trinity University plans to establish a new base in city centre as part of expansion strategy and is set to establish a city centre location at 1 Trevelyan Square to complement its long-established campus in Horsforth.

The 55,000 sq ft facility will open during the 2024-2025 academic year.

But we must accept that the nature of the working week is now changing, thanks to the increase in working from home. This is a trend which is here to stay, whether we like it or not.

Some analysts are suggesting that the four-day week, with working from home on a Friday, could soon contract to a three-day Tuesday-to-Thursday week. This clearly has major implications for the future of the office market in Leeds and across the UK.

There’s no doubt, given this together with the economic outlook for 2023, investors and occupiers are now assessing the Leeds office market with greater caution. But the flight to quality will counter-balance this and best-in-class new builds, refurbishments and buildings where a green premium can be applied, becoming ever more popular.

So, with 500,000 sq ft of Grade A office space in the pipeline and quality space now available at CEG’s Globe Point on the South Bank, Kinrise’s 34 Boar Lane and Opus North’s 12 King Street, there are reasons to be optimistic.

And with the Leeds City of Culture 2023 programme now getting into full swing, the city has much to celebrate.

Eamon Fox is partner and head of development at property consultancy Knight Frank in Leeds