Leeds office space sector suffers notable lack of occupier activity in 2010

Office space in Leeds take-up down 30% on 5-year average

Article posted: 06 Mar 2011

According to King Sturge’s recently published UK Office Market report, take up of office space in Leeds was 30% below the 5-year average in 2010. A total of 525,000 sq ft was transacted throughout the year but King Sturge do anticipate an improvement in 2011.

Supply stood at 2m sq ft at the end of the year with Grade A supply equating to a little over 3 years demand in a stable market.

Static rents for prime city centre and out-of-town accommodation, at £27 and £18.50 per sq ft respectively, is a trend set to continue in 2011.

Key occupier transactions last year include the 21,000 sq ft letting to The Big World at Roydsbeck House, 15,060 sq ft to GE Capital at Livingstone House and £4,450 sq ft at 2 Wellington Place (pictured) to BSkyB.

There was a good level of investment demand for offices in Leeds with prime yields reaching 6.75% for buildings with 10 years of good income. NFU invested £51m at No 1 Whitehall Riverside while Gatehouse Bank acquired the BT Building for £40m and Lancashire County Council Pension Fund paid £20m for Benson House on Wellington Street.

King Sturge predict consistent pricing going forward with enhanced investor demand and further speculative transactions as the occupier market strengthens.

Commenting on the report’s findings, Richard Thornton of King Sturge Leeds said: “In 2010, there was a notable lack of occupier activity with only four letting over 10,000 sq ft. Furthermore, the average deal size has continued to decrease with over 80% of transactions sub-5,000 sq ft. Enquiry levels are expected to to improve in 2011, as confidence returns to the market and Leeds it well placed for the recovery.

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Posted by Jo