Rising demand for Leeds office space – Colliers International

Demand for office space in central Leeds is rising, according to the latest research on the city by Colliers International. The firm says total absorption rose by 141,482 sq ft during the first half of 2011 – the largest increase in office occupancy for four years. The improvement is being driven by the City Core, where availability dropped by more than 10% in H1 2011, reversing a steady rise in vacancy levels since H2 2009. Overall occupancy of Grade A space reached 77.6%.

Grade A take-up was nearly 100,000 sq ft in the first half of this year, which is 16% more than the total for the whole of 2010. There was even evidence of pre-letting, Colliers International says, with the Clarion law firm signing unconditionally for 15,000 sq ft at the JF Finnegan Elizabeth House refurbishment, which is due to complete in the first quarter of next year.

There are a number of significant requirements in the market, including KPMG (70,000 sq ft), Walker Morris (90,000 sq ft), Squire Sanders Hammonds (50,000-60,000 sq ft) and the Medical Protection Society (55,000-60,000 sq ft), which are all currently considering “a mixture of existing and pre-letting opportunities”, Colliers International notes. Occupiers who want to satisfy requirements in the second half of this year include Lupton Fawcett, Yorkshire Housing, Dickinson Dees and Towry, it adds.

Letting activity in Leeds is increasingly focusing on the upper end of the market. Prime headline rents have remained steady at £26.00 per sq ft, although no recent lettings above 10,000 sq ft have been at this level. Rents are not expected to move upwards in Leeds during the next six months, the firm says.