Mixed outlook for commercial sector

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THE prospects for Leeds’ commercial property market are mixed, according to new research.

The property investment sector is going through a period of uncertainty, as many investors are still concerned about the state of the global economy.

The outlook for the remainder of the year is upbeat for Leeds’ occupational market, with total take-up set to easily outperform 2011, according to research compiled by BNP Paribas Real Estate.

However, the Leeds investment market will not fare as well, with the total 2012 transaction volumes expected to be well down on last year’s level. This performance mirrors trends seen in other parts of the UK. Between the first and third quarters of 2012, the Leeds office investment market totalled £57.6m, which was well down on the £241m transacted in the same period last year.

Roger Woolhouse, head of BNP Paribas Real Estate’s Leeds office, said: “The return to very selective speculative development looks increasingly likely, if not this year, then in 2013.

“The anticipated fall in grade A space may even lead to the resumption of pre-letting activity next year. With regards to rent, headline rent is expected to remain stable for the rest of the year, but as the city’s grade A availability tightens, there is potential for the rental level to rise in 2013.”