Leeds offices dominated by public sector
The city’s office market saw a strong finish to 2022, with 210,300 sq ft transacted in the final quarter, taking the total for the year to 618,200 sq ft, off a 10-year average of 645,000 sq ft.
JLL’s Big Six research tracks office take-up across Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.
The market was dominated by education and public sector occupiers. This included a 55,000 sq ft letting to Leeds Trinity University at Kinrise’s 1 Trevelyan Square, the largest letting in the city last year.
In the largest professional services letting Arup took 36,000 sq ft at MEPC’s Wellington Place in Q4. JLL acted on the deal.
Development activity in the city continued to be buoyant, with 685,500 sq ft speculatively under construction at year end, which will support the decline in vacancy rates over the last year. The largest new-build scheme is 11&12 Wellington Place, which is targeting net zero carbon, in use and embodied, and has recently practically completed.
Investment activity totalled £1.6bn in 2022, down 9% on 2021 and 17% below the 10-year average. Big six office investment in H2 totalled £789m, a 28% decrease compared to the same period in 2021 and a 27% decrease on the H2 10-year average.
In Leeds, the investment market finished the year positively with £68m transacted, bringing the annual total to £174m. The largest transaction in Q4 was the sale of Bridgewater Place to BWP REIT plc for £62.5m, with JLL acting for the vendor.
Jeff Pearey, head of regional office agency at JLL, commented: “Leeds remains a key market of interest for domestic and international investors and good quality, well-located stock will continue to be sought after. There is a particular focus across the city from investors and occupiers on those buildings leading the charge in terms of sustainability, and this will absolutely continue to be a fundamental theme for the future.
“That strong leasing activity has continued into 2023 with lots of active requirements in the market from an array of occupiers, including professional services and technology firms and a good deal of office space already under offer. A particular feature of the Leeds market is the strong focus on the very best Grade A sustainable office space, accounting for over 55% of all transactions last year and never less than 50% in the last three years. This underlines the ongoing flight to quality in our marketplace.”