Figures released by national property consultant Carter Jonas show that despite the increasing turmoil in the financial markets, demand continues to outstrip supply in the Leeds commercial market as new businesses are attracted to the region and investors enjoy the benefits of rising capital values.
Recent research by Carter Jonas predicted that total returns nationally for commercial property will amount to 8.8 per cent in 2016. This contrasts with 2015 which saw total returns of 13.4 per cent, with offices and industrial outperforming the wider market.
Total take up of office space in Leeds City Centre in 2015 was up by 24 per cent on last year’s figure of 550,392 sq ft – with Q4 seeing the highest level of take up in any quarter since the recession with deals agreed on 267,187 sq ft of space surpassing the previous record of 254,798 sq ft in Q4 2014. This figure was heavily bolstered by Sky’s acquisition of 97,022 sq ft at Leeds Dock.
The Leeds ‘out of town’ market encompassing schemes such as Thorpe Park and Leeds Valley Park saw marginal growth from 251,360 in 2014 to 267,861 in 2015.
Carter Jonas’ forecasts reflect a relatively positive economic outlook for the UK for the next twelve months, although the degree of uncertainty surrounding the UK’s position in the EU may dampen investor sentiment.
David Aspland, partner and head of commercial at Carter Jonas, said: “In the coming year we expect to see continued investment into Leeds and the regions as they offer a better return than the overheated London market.
“Most regional city centre office markets enjoyed had a good 2015, a trend which is expected to continue this year. With development yet to pick up significantly and steady occupier demand across the board, 2016 is likely to see solid rental growth and a further, albeit marginal, hardening in yields.”