Member Article

Study shows Leeds under regional office market pressure

Leeds is in danger of losing out to other regional markets because recent successes in securing new office occupiers have drastically limited quality office stock availability in the city, according to Colliers International, which has today revealed its latest Net Stock Absorption (NSA) study for the first half of 2013.

The study shows that the Leeds office market has heralded the strongest levels of Grade A take-up and absorption since before the onset of the credit crunch.

Grade A absorption (physical occupation of available stock) reached 127,348 sq ft, which is the highest figure since June 2007 and the largest half year take up of the ‘big six’ regional markets.

Central Leeds office take up in the first half of 2013 was more than the entire figure for 2012 and take-up of offices in central Leeds has now risen in each of the last seven half year periods.

The recent acquisition of 76,413 sq ft at Broad Gate in Leeds for Yorkshire Building Society, brokered by Colliers International in May, was the largest single office transaction in central Leeds for almost 10 years.

Dart Group (Jet 2) also agreed terms for 73,100 sq ft at The Mint and KPMG took a pre-let for 61,250 sq ft at Sovereign Square.

Roddy Morrison, head of offices at Colliers International, commented: “This success is fantastic for Leeds but as a consequence we have now reached a ‘tipping point’ in terms of supply and demand.

“The city is now really lacking in Grade A and decent Grade B available office stock, with many of the buildings ripe for refurbishment not available until after existing occupiers vacate to new build solutions in 2015-2017.

“We need more stock and speculative development is key. We are now in a pre-letting market and those who dare will win.

“Manchester and Birmingham have experienced similar success over the last two years and are more able to sustain delivery against demand with more existing stock but also, crucially, they have speculative schemes coming out of the ground.

“Leeds will soon be at a competitive disadvantage to attract true footloose occupiers, despite the fact that occupation costs are much lower than other major markets.”

This was posted in Bdaily's Members' News section by Mark Lane .