Head of office agency, Richard Dunn shares his thoughts on the outlook of the Leeds office market, following an encouraging year of take-up in the city centre and out of town markets.

Leeds’ office market remains buoyant with Leeds Office Agents Forum (LOAF) published figures, showing  a total of c. 625,000 sq ft of city centre take up during 2021, an increase of 85% when compared to the previous year.

This rise in take up supports our anecdotal evidence as we work with businesses, across a number of industries, that are looking to re-size and upgrade their offices spaces to account for new working patterns and use them as a tool to attract and retain talent.

Leeds remains one of the UK’s fastest growing cities and lies at the heart of the wider city region boasting a £65billion economy and workforce of over 1.4million.

With one of the most diverse workforces in the country we are continuing to see growth in the financial, digital and public sector industries in particular with recent moves of note including HMRC taking 380,000 sq ft at Wellington Place and Channel 4’s relocation to the city last year.

No place like home?

There has been a well-documented transition towards a more hybrid form of office working in many businesses where more time is spent away from the office by the average employee.

Undoubtedly, the pandemic will continue to factor into business and individual decision making in the short term, we do believe that over the coming months we will see a resurgence in those returning to offices. Research has shown how physical offices will remain a focal point for  business culture, collaboration, learning and social interaction.

This subsequently places a much greater emphasis on quality, sustainability and office design.

Grade A Supply

During 2021 Grade A office space accounted for almost 50% of total take-up further highlighting the need for occupiers seeking the top quality office stock.

There is currently around 200,000 sq ft of standing Grade A stock in the city centre supplemented by a further 677,000 sq ft of unlet space which is under construction. This space is a mixture of new-build and high quality refurbishments and the additional supply will hit the market in a phased manner with the various schemes due to practically complete before 2024. These unlet units are generating significant interest as prospective tenants plan for future moves and don’t expect them to remain on the market for long.

Alongside changing offices occupiers are also seeking increased flexibility in new leases to better future proof their real estate strategy. This is a trend we expect to continue with more landlords offering Cat A+ / plug and play offices. These offices have risen in popularity for many small and medium sized businesses, offering a mid-ground between full flex providers and the costly design and fit out associated with a more traditional office move.

Ultimately, only time will tell what the landscape of the Leeds office market will truly look like in the next couple of years but it’s clear that the focus for many will be on delivering high quality office spaces that offer employees the flexibility that they’ve grown accustomed too over the past couple of years.