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Leeds Snapshot, July 2012

Report Authors: Colliers

Report Summary:


Leeds has continued to see strong absorption of Grade A and B office product throughout the first six months of 2012. Total absorption reached 120,633 sq ft across the Leeds market in H1 2012 which is 47% up on the previous six month period. Grade B occupation levels increased by 89,452 sq ft which is the highest half yearly increase for over five years. Absorption in the city core was strong once again with 265,134 sq ft being absorbed over the past 18 months.

While absorption levels remain resilient, take-up of office space in Q2 2012 was down on Q1. Nevertheless, half yearly take-up still showed an improvement on H2 2011, up by 6%. Grade A units made up 32% of take-up in H1 2012 but the majority of activity was for Grade B space, dominated by the sale of 2-3 Victoria Place, LS11 (63,552 sq ft) to the Medical Protection Society. Grade C take-up was modest with just 10 deals totalling 12,191 sq ft compared to 23,253 sq ft in H2 2011. Accordingly, Grade C absorption fell by 18,886 sq ft.

Leeds availability has now fallen from 1.85 million sq ft in December 2010 to its current level of 1.49 million sq ft, a drop of close to 20%. Reduction of Grade A space is even more pronounced, falling by 32% over the same period and now at a four-year low. Speculative construction, while increasing, still remains substantially below the 10-year average of 227,000 sq ft. Currently there is just under 80,000 sq ft under construction in three schemes.

Prime rents remain at £26 psf but there is no expectation of significant uplift in the city core during the remainder of 2012.

About the Author:

The Colliers International Research team provide expert advice and a wide range of specialist services to clients across the UK, including a property market forecasting capability.

Our Net Stock Absorption office research is at the leading edge and provides a unique insight into the health of the London and UK regional office market