Two big lettings see office deals double in Leeds

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THE number of office deals doubled in Leeds during the third quarter of this year, according to Knight Frank’s Regional Office Market Presentation (ROMP) research.

Twenty-two deals, amounting to 123,000 sq ft of office space, were concluded between July and September.

A supply shortage has prompted the start of some speculative development.

Prime rents remain unchanged, with headline rents at £24 per sq ft. However, the shortage of supply means that rents could rise to £25 per sq ft by the end of 2012, according to Knight Frank.

Headline rents in Leeds have remained steady at £24 per sq ft for the past two years, having fallen from £27 per sq ft at the peak of the market.

Elizabeth Ridler, who specialises in office agency with Knight Frank in Leeds, said yesterday: “While these latest take-up figures are a welcome piece of news, the figures are slightly distorted by two lettings totalling 65,000 sq ft at IVG’s Number 1 Leeds, to The Yorkshire Post and Gaz de France.

“These deals make this building the most successful office property in Leeds over the last 18 months, with only one floor of 15,000 sq ft remaining to let. An analysis of the other transactions shows that 77 per cent are under 5,000 sq ft, which reflects the general trend towards smaller deals over the last couple of years. Active named requirements declined in the third quarter but nonetheless remained at a healthy 390,000 sq ft.

“The key active requirements are currently being driven by legal firms such as Squire Sanders, Shulmans and Walker Morris, all of whom are considering whether to relocate by way of a pre-let or re-gear. A number of deals are expected to be signed by the end of the year.”