After a challenging 18 months, take-up in the Leeds office market for the first half of the year is up 25 per cent based on the city’s half-year average, surpassing the 2020 figure for the same time period, according to Avison Young’s latest Big Nine report.
Following the exceptional activity during Q1, Q2 take-up totalled 204,184 sq ft, 13 per cent below the ten-year quarterly average.
Out of the nine largest cities outside of London, Leeds also secured the second largest investment deal of Q2, with Revcap’s £85m transaction at Broad Gate, Headrow. This deal contributed to the city surpassing its ten-year quarterly average investment volume by nearly £40m.
Despite the promising take-up levels, Avison Young’s UK Cities Recovery Index has revealed that Leeds’ return to office occupancy is still significantly lower than pre-pandemic levels, with the latest Index reading at 42.0, signalling that there is still a demand from employees to work remotely.
Jill Goodman, director at Avison Young’s Leeds office, said: “Although overall take-up figures dipped slightly in Q2 compared to the ten-year quarterly average, the city is still performing well and riding out the challenges that the past 18 months have thrown at us.
“Unsurprisingly, as occupiers continue to assess their needs and adapt to a more flexible approach to home vs office working, they are releasing space back to the market and city centre availability has increased to 855,000 sq ft. This is up from its cyclical low at the end of 2020, but still 50 per cent below the peak in 2016.
“However, there is still a significant shortage of Grade A availability. As we know, many businesses are now looking for different requirements as they adapt to the introduction of hybrid working, as well as downsizing in exchange for higher quality premises, us included, so it will be critical that more schemes are added to the city’s development pipeline if we are to continue to attract and retain businesses in Leeds.”
Avison Young recently announced that it has exchanged contracts and is underway with the fit-out of a new 4,000 sq ft, high-spec office at One City Square.
There are no new developments due to complete in 2021 to add to the pipeline of quality supply, but 244,000 sq ft at 11 and 12 Wellington Place and 37,800 sq ft at Globe Point at Temple will complete in 2022.
The city centre take up was dominated by Global Banking School at St George House on a 15-year lease, taking up 41,000 sq ft of the 106,150 sq ft space, being the biggest of the deals to take place in Leeds across the quarter.
Avison Young’s Big Nine report covers the nine major cities outside of London: Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, and Newcastle.