Rumours that two of Britain’s biggest law and accountancy firms are considering relocating to Leeds have prompted one property expert to suggest its time the city moved its speculative office construction into high gear.
Almost 141,000 sq ft of office deals were signed in the city during the first quarter of 2014. That was followed by a more modest 104,000 sq ft between April and June. But claims Elizabeth Ridler, a partner at Knight Frank’s Leeds office, further supplies will be squeezed if speculation about the two large scale moves proves accurate.
Both multinational professional services provider, PricewaterhouseCoopers (PwC), and Addleshaw Goddard, a corporate law firm headquartered in London, already have offices in Leeds but are said to be considering relocating a greater part of their operations to Yorkshire.
Refusing to comment on a possible move, PwC is reportedly close to signing a pre-let of approximately 50,000 sq ft at Roydhouse Properties’ Central Square scheme which, when complete, will include 220,000 sq ft of Grade A office space.
“The dynamics of supply and demand now unquestionably support the case for speculative development,” said the office leasing specialist. “There is without doubt a window of opportunity to capitalise on the significant number of upcoming lease events and also on the number of occupiers who are increasingly demanding a better product and are willing to pay for it.”
With more and more cranes being visible above the city skyline, Ridler anticipates that tenants would start “voting with their feet” and demand office accommodation located within a short distance of the city’s main railway station.
Knight Frank research shows that 23 transactions were completed during the second quarter of this year, 17 per cent of which were lettings in excess of 10,000 sq ft and 26 per cent over 5,000 sq ft.
Among the larger signings were Sanef Operations’ 24,241sq ft move to the Hermes St John’s Centre which created 300 new jobs, Ashcourt Rowan’s 11,146 sq ft occupation of Aegon’s City Point, and Sticky Eyes taking 11,800 sq ft at 100 Wellington Street. The Call Credit Information Group also leased 10,240 sq ft at One Park Lane.
“The occupier market was primarily driven by the finance and banking sector as well as retail and distribution firms, which in total accounted for more than 71 per cent of the activity in the first half of this year,” Ridler added. “There was also a significant amount of pre-let activity during the second quarter and we expect that this trend to continue.”
At the start of July there was 251,256 sq ft of premium office space available in the centre of Leeds. Although Knight Frank said office rents remained largely static, it anticipated the next phase of pre-lets to push headline rents upwards from £25 to £26 per sq ft by the end of the year.
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