Leeds commercial office market in 2009
The Leeds commercial office market was one of the few UK areas which haven’t seen a great overall weakening in 2008 of demand and take up for office space.
Thanks to the high level of take ups for commercial offices in the previous year, especially at the beginning of 2008, the number of rents in Leeds increased. This was mostly due to the low level of availability of centrally located grade A office space at that time, maintaining prices. In the second half of 2008 there was a weakening of the office space market, mainly due to a drop in demand as tenants reassessed their needs due to the unravelling economic crisis and shroud of uncertainty.
In 2009, there is still a limited choice of grade A office space, although there will be more available soon with the completion of 500,000sq ft of new office space currently under development. According to office agent Drivers Jonas, the Leeds office market is predicted to bottom out this year and slowly return to growth by the end of 2009.
The weaker demand will make the rents inevitably fall however, Leeds City Council is currently looking at taking 300,000 sq ft in the City Centre. To put it in perspective this is half the overall take up for commercial office space in Leeds, which will give a boost to the market if the deal closes.
The total amount of take up in Leeds last year was 400,000 sq ft. The first quarter of 2009 saw a total of 99,000 sq ft of office space rented, which is 8,000 sq ft lower than the figures achieved in 2008.
The general outlook given by Drivers Jonas in 2009 indicates a drop of approximately 8% in the average rents as well as an increase in the free-rent incentives, which is good news for the occupiers. For landlords on another hand, the most encouraging news for 2009 will be the large take up planned by Leeds City Council, which should boost the Leeds office space market and help it get through this tough year.
Written by Emily Mouquot, Marketing Director.