Leeds Employment Growth to Drive Office Demand
Employment growth in business administration and support services, as well as professional, scientific and technical occupations will drive the demand for office space across the Yorkshire region and by 2014 Grade A office space will be in short supply according to new research from CBRE.
CBRE’s regional Prime Office Rent Forecast Report indicates that the key to improvement in local office markets will be a return to some meaningful employment growth following a boost in overall levels of business confidence. Certain sectors are expected to drive forward recovery such as the business administration and support services sector which was one of the key drivers of growth pre-downturn. Across the eight regional cities, growth in this sector is forecast to be 12.8% over five years, with cities including Leeds, Glasgow and Manchester forecast to see the fastest growth.
For professional, scientific and technical services employment collective growth across all eight cities of 14% is expected over five years. Leeds, Manchester, Glasgow and Bristol are expected to see the strongest growth from this sector also.
Jonathan Shires, Director of Office Agency at CBRE Leeds explains; “Looking back, between 1998 and 2009 employment in public administration grew by 13%, with Yorkshire and Humber being one of the regions which experienced significantly higher rates of growth at 29%. Given austerity measures over the remainder of this decade, further growth is not expected from the public sector. Consequently future office demand will be primarily driven by private sector growth on specific sectors as aforementioned.
“Looking elsewhere, underlying growth within financial services employment is likely to remain slow, particularly in the short term at just 1% over five years. In contrast, and perhaps the area of particular interest in the upturn, is the information and communications sector. Growth over the last 20 years has been from multi-national hardware and software developers, particularly those who support the commercial market and more recently there has been increased focus on design, content and creativity and a blurring of the boundaries between IT, telecoms and traditional media. These sectors could therefore contribute to a return in occupier activity.
“In Leeds there are around 1.5 million sq ft of lease events in the next five years but at present stock stands at just 1.4 million sq ft and this is everything from small 500 sq ft units to larger availability such as the 130,000sq ft of Grade A space at Broad Gate. Refurbishments in 2013 such as 21 Queen Street and 1 Aire Street will set the benchmarks for what can be achieved with older buildings but with no substantial new stock in the pipeline, Leeds could be in short supply moving ahead.
“We are likely to see more companies going down the pre-let route as confidence for speculative development is still some way off. The key message from these findings is that the forecast increased requirement for new office stock within the city is positive and will hopefully signal confidence to the rest of the UK that Leeds is a place to do business, a fact cemented by the completion of the Arena and Trinity Shopping Centre.”
This was posted in Bdaily's Members' News section by Space PR .
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