Leeds occupational market set to outperform 2011

Occupational market take-up in Leeds is expected to see a significant increase on 2011 levels, according to a report from BNP Paribas Real Estate.

The report shows that there was an increased take up of space in the city centre, which rose 11% on the previous year. Out of town take-up increased massively by 62% from the Q1-Q3 2011 level.

The improvement was attributed to an increase of completed deals, now totalling 14% from Q1-Q3 2011, as well as an increase of floor space take-up, which rose to 3,700 sq ft over the same period.

However, the investment markets for Leeds tied in with similarly disappointing regional results, with transaction volume down by £183.3m in Q1-Q3 2012 compared to the same period in 2011.

The downward trend ties in to disappointing regional UK office market take-up figures, and comes as no surprise to analysts.

Roger Woolhouse, head of BNP Paribas Real Estate’s Leeds office, commented: “The return to very selective speculative development looks increasing likely, if not this year, then in 2013.

“The anticipated fall in grade A space may even lead to the resumption of pre-letting activity next year. With regards to rent, headline rent is expected to remain stable for the rest of the year, but as the city’s grade A availability tightens, there is potential for the rental level to rise in 2013.

“At the end of Q3 2012, Leeds’ headline rent remained unchanged for the seventh consecutive quarter at £25.00 per sq ft. Tenant incentives remain common place in the market, with tenants typically receiving 36 months rent-free on a 10-year term,” concluded Woolhouse.