Leeds is establishing itself as one of the country’s main business hubs and is widely considered to be one of the best places to invest in property, with demand for commercial premises continuing to grow and vacant grade A office space at sub 3%.
The city’s positive trajectory shows no sign of slowing with an expected 9% GVA growth over the next five years. This is reinforced by employment numbers in the city that are already above pre-pandemic levels and office-based employment is projected to increase by 5% over the next five years.
With such a buzz about the city, it is easy to see why investor confidence is so high and why commercial property is being snapped up so quickly. The city’s economy grew by 34% during the last decade with a forecast of 21% growth over the next ten years.
Bradley Hall Chartered Surveyors and Estate Agents launched its Yorkshire office – with a base in Leeds – two years ago, as part of its Northern expansion plan. The firm charted 175% growth in this arm of the business at the end of the last financial year, through its commercial services including valuation services, lease renewals, rent reviews, commercial agency and land, development and new homes.
Data from Savills showed that Q1 2022 in Leeds saw a promising increase in commercial deals – not just in comparison to 2021 but also compared to the previous five years. The analysis showed that completed deals for Q1 were 33% above the five-year average.
And latest figures from the Office for National Statistics have revealed that the number of people embracing hybrid working almost doubled from February to May, while the number of people working from home has more than halved. The research also found that 84% of those who had to switch to home working due to the coronavirus pandemic now plan to move to hybrid working full-time, reiterating that office space continues to be an important commodity.
Prioritising employee wellbeing as well as recruiting and retaining talent has become a clear post-pandemic strategy for a lot of businesses. Offices which reflect these approaches are often much more spacious and incorporate a variety of flexible workspaces like breakout areas, ‘quiet’ spaces, meeting and video meeting rooms.
And in Leeds there has been clear demand for high quality commercial space with 17% increase in the number of completed Grade A lettings in Q1 this year compared to the same period in 2021, this is highlighted by Lupton Fawcett’s 11,500 sq ft acquisition at 2 The Embankment. Grade A supply decreased by 23% to 305,000 sq ft at quarter end. This is indicative of the continued resilience of Grade A demand and the ‘flight to quality’ that is present within the market. As a result, Grade A supply remains extremely limited, particularly for prime space in Leeds city centre.
There appears to be a decline in the ‘lure of London’ and a change in attitude among many organisations moving away from needing a London office. Many business leaders are putting more store in quality of life, which can definitely be enjoyed in Yorkshire.
The Business & Consumer services sector was the most active sector in Q1 2022, accounting for 25% of overall take-up. The largest transaction in the sector was the 8,750 sq ft Grade A letting to recruitment agency Charlton Morris at 34 Boar Lane. The TMT and Serviced Office sectors also started 2022 strongly, each accounting for 15% of the overall take-up. Serviced office operator 2Work’s 14,000 sq ft acquisition at Bank House was the second-largest letting of the quarter.
As well as office space, Leeds has cultivated considerable growth and interest though other avenues of commercial development. The city has a growing ‘knowledge’ sector, supported by the Innovation District, focussed around its leading academic and teaching institutions including the University of Leeds, Leeds Beckett University, Leeds Teaching Hospital Trust and Leeds Arts University.
Leeds train station is also undergoing significant improvement work that will positively impact workers and commuters.
Bradley Hall has been in the North East for 34 years. Since it branched out into Yorkshire in 2020 the company has taken on eight staff in its Leeds office and has plans to create multiple other job opportunities within the next year to meet growing demand in the area.
