_City of Culture 2023: Spotlight on Leeds
These are challenging times for the commercial property sector in the UK and closer to home in Leeds. The combination of the cost-of-living crisis, political uncertainty and the continued post-Covid trend of working from home is increasing pressure on the city’s office market. But, before we all get swept away by a tide of pessimism, it is worth remembering the oft-quoted adage: “Our greatest weakness lies in giving up”.
So, let’s look at the positives in Leeds. Leeds remains a magnet for quality workspace and talent. In the past five years, the city has welcomed large employers such as Burberry, Channel 4, and the UK Infrastructure Bank. Organisations on a recruitment drive, including insurance giant Markel and the Bank of England, have also taken to Leeds. At the same time, several high-profile law firms such as Brabners, Knights and DLA Piper have invested in the city, with DLA taking an 83,000 sq ft pre-let at City Square House, next to Leeds station.
Meanwhile, it is widely expected that rents for prime commercial offices in Leeds city centre will break all records this year, rising to £38 per sq ft. This record-busting increase is down to a combination of quality new offices being either built or comprehensively refurbished and the increase in occupier demand. Much of this demand is from those organisations with an eye on the scalability of Leeds regarding property and recruitment. This prediction follows the news that the office take-up in Leeds for the last quarter of 2022 was the highest for five years.
So why choose Leeds?
There are many reasons, so I will be brief. With a population of more than three million and an incredible workforce of more than one million, Leeds is a thriving city offering a wealth of opportunities. The city is blessed with excellent road and rail transport, allowing easy access to London, Manchester, Birmingham, Scotland, and other major cities in the UK. And, crucially, while the cost of living is a concern, it is far cheaper to live and work in Leeds than in other parts of the UK.
This required workforce is being educated on scale. Leeds Trinity University, for example, plans to develop a new base in the city centre as part of its expansion strategy. It is set to establish a city centre location at 1 Trevelyan Square to complement its long-established campus in Horsforth, the 55,000 sq ft facility will open during the 2024 to 2025 academic year.
Working environment and pattern changes
We know that the nature of the working week has changed, due to the increase in working from home. This trend is here to stay. Some analysts are suggesting that the four-day week, with working from home on a Friday, could soon contract to a three-day Tuesday-to-Thursday week. This clearly has major implications for the future of the office market in Leeds and across the UK.
Given that this is paired together with the economic outlook for 2023, investors and occupiers are now assessing the Leeds office market with greater caution. But the flight to quality will counter-balance this, and best-in-class new builds, refurbishments and buildings where a green premium can be applied are becoming ever more popular. Some companies will take more space than they currently need, with a view to scaling up when economic conditions improve, while others will insist on spacious offices to foster good mental health and wellbeing amongst their employees.
With 500,000 sq ft of Grade A office space available, and with the Leeds City of Culture 2023 programme now getting into full swing, the city has much to celebrate.
UK Cities insight report
We're delighted to share our new UK Cities insight report. We have identified key areas that have played an integral part in influencing regional city office markets over the past year, which will shape 2023 and beyond.