By David Cran, Director at Bradley Hall Chartered Surveyors and Estate Agents.
Leeds is seeing ongoing inward investment and substantial growth in various sectors including media, high tech manufacturing, pharmaceuticals, and logistics. The city centre continues to see high profile and substantial office lettings reducing grade A office vacancies to sub 5%.
Being the UK’s fastest growing city, and a key player in the city region with a £64.6 billion economy, Leeds’ combined population of three million and workforce of 1.37 million appears to have no intention of slowing down. Within the last ten years, Leeds has become home to dominant corporations such as Channel 4, HMRC, NHS Digital and Sky with the BBC recently announcing plans for substantial investment and noted enquiries for a new British Library and a new pharmaceutical lab, both located in Holbeck.
The city’s economy grew by 34% during the last decade with a forecast of 21% growth over the next ten years. The relatively limited speculative development has resulted in limited new build residential, office and warehouse space in the city region which is driving rental and capital values up.
Bradley Hall Chartered Surveyors and Estate Agents has launched its Yorkshire office with a base in Leeds as part of its Northern expansion plan. The firm has appointed director David Cran to oversee the operation which offers commercial services including valuation services, lease renewals, rent reviews, commercial agency and land, development & new homes.
As we prepare to re-enter the business sphere away from the comfort of our homes, it becomes more obvious that offices are essential, not just for the growth of businesses and for the needs of our clients, but similarly for the desires and health of staff members too. Statistics from Nuffield Health have recently highlighted that 80% of the population in the UK have noted a negative impact on their mental health when working from home over an extended period of time. Due to this, it is paramount that environments such as offices, which encourage the sharing of ideas, as well as meaningful and collaborative work, resume as part of our everyday lives as soon as is possible safely.
There has been an extraordinary interest in office space across Leeds over the last year, despite the challenges posed by Covid 19. A real fight has occurred for quality space that promotes employee’s positive mental health and wellbeing. Leeds is one of the UK’s dominant commercial strongholds, with office stock of over 20 million sq. ft. The Leeds office market saw total take-up of just over one million sq. ft. in 2019, set against the wider UK political and business uncertainty of the Brexit deal.
Owing to a strong level of occupancy being recorded in the city over the past few years, which has led to most of the existing Grade A office space being occupied, traditionally this would be considered a problem. Yet, as we move towards a more flexible approach to the working week, it appears that the struggle for quality space is a more extreme than the battle for quantity. Office space is still very much in demand in Leeds, but it seems significant that the Coronavirus pandemic has brought the change in how we work, with a more flexible approach, to the forefront of our minds.
James Scott of Muse Developments, a company that focuses on mixed-use development and urban regeneration, as well as a range of major commercial and residential schemes across the country, made comment on the commercial property sector in Yorkshire.
“2020 was dominated by Covid 19 which, coupled with the uncertainty surrounding Brexit, has had a largely negative impact on the market. The exception to that is the industrial sector where the rapid rise in e-commerce has pushed up rents and hardened yields. Looking ahead, I see the way buildings are used changing swiftly and significantly. Factors of technology and climate change have always been with us, but there are now other issues, like the rise of working from home and the increased need for safety, to consider, which will lead to a fundamental change in the design and purpose of new builds. This will be especially applicable to offices”.
Caddick Developments, a company that specialises in the acquisition, development, construction and management of residential, industrial and regeneration projects, discussed their focus and logistical plans for the future. Managing Director, Myles Hartley, noted the ways in which the company plans to remain resilient going forward. “Agile delivery will be key to the success all developments, and with a strong end-to-end offer which sees Caddick Group companies collaborate to streamline the planning and development process, we’re in a prime position to deliver this much needed space”.
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. With the government announcing that the HS2 high speed rail line will go ahead in full, Leeds stands to benefit substantially resulting in immediate inward investment focussed on areas set to be revived by the new station and connections to the new Leeds station, which itself is undergoing substantial renovation and improvement with more to come. The new line will create fresh relationships from Leeds City Centre to Sheffield, Birmingham and London.
Leeds looks to have a bright future both in the immediate and longer term as more government, public bodies and private firms seek to “north shore” their businesses and with the BBC, Bank of England, British Library and the new national infrastructure bank seeking space within the city now is the time to invest.
