Member Article

Encouraging signs for Leeds real estate market

Property developers could be set to ‘push the button’ on a number of speculative office developments in Leeds, according to a detailed survey by Deloitte Real Estate.

The Deloitte Real Estate UK Cities Crane Survey 2013 has revealed growing confidence in the Leeds office market, driven by a burgeoning demand for floorspace – and the firm believes growing demand will encourage developers to act.

The amount of floorspace under construction in the city has risen by 68 per cent since last year’s survey, with a total of 147,000 sq ft spread across four schemes.

Demand in the first half of 2013 was high, seeing take-up reach 438,000 sq ft – eight per cent higher than the total achieved in 2012.

Praising the ‘consistent’ property market in the city, Angela Barnicle, Deloitte Real Estate’s head of Leeds, said office and student housing developments were leading the way for new starts in 2013.

Barnicle said: “The rise in activity suggests growing confidence in the Leeds office market and we are seeing renewed optimism and vibrancy across the city.

“Despite the healthy level of activity in the regional office market, developers have thus far not rushed to develop new floorspace. However, Deloitte Real Estate research shows we could be on the point of seeing a number of speculative schemes starting, aiming to attract tenants currently faced with little or no choice of currently-available floorspace.”

The Crane Survey also revealed good news for retail in Leeds – the widely-celebrated opening of the one million sq ft Trinity Leeds development has been followed by the refurbishment of the Merrion shopping centre and the Victoria Gate development due to start in 2014.

Residential developments in the centre, however, were quieter – no new construction starts and zero deliveries of residential units in 2013 leaves residential completions at their lowest level for a decade.

Barnicle added: “There has remained a large supply of residential units since the boom period in 2007 – though this has now largely been absorbed, particularly by the vibrant lettings market. We do not expect this slow performance to last too much longer as the success of developments such as Trinity and the Arena will entice both developers and residents to the city.”

This was posted in Bdaily's Members' News section by Deloitte LLP .