Download Market Update Q1 2016.
Office occupier take-up in Leeds continued to show strong demand during the first quarter of 2016 with the out-of-town market outperforming the city centre for the first time since Q2 2012.
According to the Leeds Office Agents’ Forum (LOAF), a total of 141,174 sq ft of office space was transacted in the out-of-town market between January and March this year – a 30% increase on the previous quarter and 137% increase on the same period in 2015. This compares with a total of 121,908 sq ft of city centre offices taken up in the first three months of 2016, a 39% increase compared to quarter one 2015.
Activity was buoyed by the first pre-let at Kirkstall Forge which saw Zenith Intelligent Vehicle Solutions take 45,000 sq ft in what was the largest out-of-town office deal for over two years. Of the 25 out-of town-deals to complete in the first quarter of 2016, five were over 10,000 sq ft.
Richard Dunn, Partner in our agency department and LOAF spokesperson, said: “A healthy combination of volume and size of deals over 10,000 sq ft means out-of-town market conditions are arguably at their most buoyant for four years.
“We saw the first significant out of town pre-let for several years at CEG’s Kirkstall Forge which has kick started the development of this 56-acre site and most importantly, the first office building on the scheme. This also helps to underpin Scarborough’s confidence in commencing the only fully speculative out-of-town office building at Paradigm, 3175 Thorpe Park , which is likely to set a new benchmark for out-of-town rents when completed towards the end of this year.”
In the city centre, 22 occupier office deals transacted over the first three months with an average size of 5,500 sq ft. Just three deals over 10,000 sq ft completed: RSM securing 25,539 sq ft at Central Square, the letting to Hestview Ltd of 39,605 sq ft at No 6 Wellington Place and Dentsu Aegis Network agreeing a pre-let on 13,800 sq ft at 6 East Parade.
Richard added: “With five city centre schemes – 5 Wellington Place, Central Square, 6 Queen Street, 6 East Parade and 3 Sovereign Square – all scheduled to reach practical completion in Q2/Q3 this year, Leeds offers a UK leading choice of new offices backed by competitive rents and access to a diverse and skilled workforce. These all make our city very attractive to both local businesses as well as companies looking to north shore from the expensive and overcrowded London and south-east markets.”
The Leeds Office Agents’ Forum was established in 2010 by the leading surveying firms based in Leeds to collate and distribute definitive market data. Its members are Sanderson Weatherall, BNP Paribas, Carter Towler, CBRE, Colliers International, DTZ, Eddisons, Fox Lloyd Jones, Bilfinger GVA, JLL, Knight Frank, Lambert Smith Hampton, Ryden, Savills and WSB.