Office occupier take-up in Leeds’ out of town office market outperformed the city centre for the second successive quarter in what was otherwise a more subdued Quarter 2 according to the Leeds Office Agents Forum (LOAF).
Q2 2016 figures released today show 76,026 sq ft of offices was taken up by occupiers in the out of town market compared with 73,103 sq ft in Leeds city centre - a 46% and 40% decrease respectively compared with the first quarter of the year.
There were a total of fifty deals concluded in Q2, split equally across both markets. In the out of town market, two deals of over 10,000 sq ft in size concluded: the letting to Slater & Gordon at City West and NHS Property Services which took 10,826 sq ft of space at Wira Business Park in Horsforth. Just one Leeds city centre transaction above 10,000 sq ft completed - the letting to Plexus Law of 14,743 sq ft at Joseph’s Well.
Dan Hodge from Ryden and LOAF spokesperson, said: “Office take-up has been somewhat quieter in Q2 as a number of occupiers became more cautious in the build up to the Referendum. Notably however, we continued to see very encouraging signs in the out of town market this quarter witnessing better transactional volumes.
“We’ve also seen upward movement in prime office rents across both markets with headline rents in the region of £28.00 per sq ft for prime city centre space and thought to be in excess of £20 per sq ft in the out of town market. In the short term it is likely, with the existing tight supply of Grade A space, that headline office rents will largely remain unchanged.”
Roddy Morrison from Colliers International added: “Q2 office take-up activity was undoubtedly muted however a few deals didn’t get over the line in time and will contribute to a healthier Q3 total.
"Existing occupier requirements in Leeds city centre are continuing as planned albeit we will see occupier decision making taking longer over the summer months usual holiday period rather than Brexit hangover, and this could potentially impact city centre take-up levels in the short term.
"2016 was always going to be more challenging compared with the last two or three years of strong transaction levels as there are fewer lease events this year. There are more lease events pending in 2017 and going forwards and the fundamentals of the Leeds office market remain strong with a limited supply of new stock.”
The Leeds Office Agents' Forum was established in 2010 by the leading surveying firms based in Leeds to collate and distribute definitive office market data. Its members, alongside Ryden, are BNP Paribas, Carter Jonas, Carter Towler, CBRE, Colliers International, Cushman & Wakefield, Eddisons, Fox Lloyd Jones, Bilfinger GVA, JLL, Knight Frank, Lambert Smith Hampton, Sanderson Weatherall, Savills and WSB.