Service Industries Take Control of Leeds Office Space

Global commercial real estate services firm Jones Lang LaSalle has said that the service sector has accounted for 42% of all office take-up in Leeds so far in 2012, with this business sector providing a substantial boost to the market in the third quarter through two large deals: the letting of 31,155 sq ft to energy company GDF Suez, and the acquisition of 33,800 sq ft by Johnston Publishing (Yorkshire Post).

Although the second quarter didn’t follow the impressive performance seen in the first quarter, Leeds city centre office leasing volumes up to September came to a total of 335,600 sq ft, up 7.2% on the five-year average. Take-up in Leeds was generous again in Q3, with volumes of 11.1 compared to the ten-year quarterly average.

The research by Jones Lang LaSalle reveals that 88% of Leeds city centre deals were of lettings in the sub 10,000 sq ft market, with only seven transactions over 10,000 sq ft recorded so far this year.

Richard Thornton, director in Jones Lang LaSalle’s Leeds national office agency team, said, “The regional office market remains relatively exposed given the lack of larger deals we’ve witnessed across all the major markets so far this year.

“Outside of the Thames Valley/West London Market there have been just fourteen deals over 10,000 sq ft in Q3 in the major markets. On the whole leasing activity largely remains focused on smaller transactions.”

National commercial property consultancy Lambert Smith Hampton (LSH) have conducted research themselves that has revealed that office take-up in Leeds city centre is quite probably going to exceed 400,000 sq ft for the first time in four years.

According to their research, city centre grade A take-up accounted for 55% of the total in Q3, while the combined total of grade B and C accounted for the remaining 45%.

The out of town take-up was shown to be mostly grade B and C quality accommodation, with occupiers taking advantage of cheap deals.

Adam Varley, head of office agency for LSH in Leeds, said, “The increase on like-for-like take up is encouraging, however the lack of grade A space in city centre locations is likely to be an issue for occupiers in the future.”

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