Office take-up in Leeds this year is on track to potentially record over one million sq ft for the first time, following a major pre-let to the UK Government.
Last month it was announced that a total of 6,000 civil servants are to be relocated to a new Government Hub in Leeds at the Wellington Place development.
The 378,000 sq ft pre-let has resulted in the best ever quarterly Leeds office take-up figures and put the city on track to hit take-up exceeding one million sq ft for the year, according to office market data compiled by the Leeds Office Agents’ Forum (LOAF).
Jeff Pearey, from JLL and spokesperson for the LOAF, told The Yorkshire Post that the acquisition by HMRC and NHS Digital, working with the Cabinet Office, had added “dramatically” to the take-up figures.
Mr Pearey said: “Clearly that’s improved the figure substantially for 2017 but also behind that we’ve seen a number of other expansions and office transactions.
“The market is in a reasonably positive state at the moment. There’s evidence of local occupiers, people who are already established in Leeds, taking additional office space.
“That is certainly the case with Sky, NHS Digital and Regus. They are all expanding, taking on additional office space.
“You’ve got one or two new entrants as well. One area that Leeds is particularly noted for is attracting new entrants to the market. We are starting to see interest from businesses that are located elsewhere.
“The immediate future looks reasonably positive for the office market.”
However, looking ahead there is a “relatively limited supply” of new grade A office space coming through, says Mr Pearey.
He added: “That relatively limited supply may well encourage people to make property decisions a little bit earlier to make sure that they can take the space that is available and on the market.”
During the first nine months of this year, Leeds office take-up in the city centre alone had already hit a total of 797,722 sq ft.
The buoyant office market in the city is down to “fairly benign” trading conditions in and around Leeds, Mr Pearey says.
“People are perhaps a little more confident than they were 18 months ago,” he added.
Despite there being a potential for shortage in brand new grade A office space, Mr Pearey still believes there is a “reasonable degree of choice”.
He said: “The Leeds market doesn’t just rely on brand new grade A office stock.
“There is also a wide array of really good quality refurbished buildings that have been launched in the last six to 18 months. I don’t think there are any grounds for concern at this particular point in time. It’s something that maybe we look at in 12 months’ time.”
The out-of-town market recorded 120,000 sq ft in the third quarter, a 45 per cent increase compared with the same quarter last year, 54,000 sq ft.
“The success of the out-of-town market is clearly critical. We’ve got overall build stock of four million sq ft out of town,” said Mr Pearey.
Works starts on Government Hub
Work has begun on the new Government Hub at 7 and 8 Wellington Place with the developer MEPC hosting an official ground-breaking ceremony to mark the start of the build.
James Dipple, chief executive of MEPC, said: “This is an exciting time for Wellington Place and we are thrilled to see work starting on the new Government Hub.”
Jeff Pearey said that the new hub “could lead to additional businesses looking to be clustered” around the area.
The building, which has been let on a 25-year lease, is scheduled for completion at the end of 2019 and 6,000 civil servants will then move into the site.