Commercial Property News

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Tuesday, November 27, 2023

Office rents in Leeds are on the up

The report states that demand for office space in Leeds remains high and, in fact, outstrips supply, with only limited schemes in the pipeline and just a couple of schemes ready to start on site in the city centre within the next year.

There is currently 1.2 million sq ft (111,480 sq m) of supply in the market, equating to a vacancy rate of 8.9%, and only 25% of this is grade A. Looking forward, rents are on the rise, with small suites in the traditional core of the city aspiring to achieve 28 - 30 per sq ft (301 - 323 per sq m) in the next 12 - 18 months. The report indicates a potential rental growth of 12% on prime grade A space and 16.5% on grade B refurbishments in this period.

Paul Fairhurst, director at Savills' Leeds office, comments: "There have been significant changes in the Leeds office market over the past few years. With around 420,000 employees, there is a strong business base, which has been forced to move away from the traditional central core, towards the south and west of the city due to lack of available space in the core bordered by The Headrow and Wellington Street.

"There is a continuing significant move away from manufacturing in the city with growth focussed in the financial and professional services sector. Manufacturing employment in Leeds is likely to see a 15% decline against a 10% reduction in the UK. This will undoubtedly have a positive impact on the demand for office space in the long term."