Posted 14 January, 2020 OBI NEWS
That’s the view of commercial real estate consultancy OBI, retained agents on the recently approved 330,000 sq ft Wellington scheme – which will become one of the largest multi-occupied workspace buildings in Leeds city centre once built.
Rob Prescott and Oliver Stainsby, of OBI’s Leeds office and national transactions and management teams, predict a new headline rent of £34 per sq ft in 2020 for standing stock and best in class buildings such as The Majestic, the new home of Channel 4.
The pair, who are heading up the consultancy’s Leeds operation, also believe that office refurbishments will continue to plug the supply gap over the next 18 to 24 months due to a limited development pipeline.
“We anticipate strong investor demand for office refurbishment schemes in Leeds,” said Rob, “based on the supply and demand dynamic and shortage of Grade A space in the City.”
He added: “The shortage of standing Grade A stock and floorplates in excess of 10,000 sq ft is also likely to trigger new Grade A development in 2020. With that in mind, we believe pre-lets are still required as it stands, although there is talk that Vastint and CEG may spec buildings in excess of 100k sq ft.”
Founded in 2010 by Will Lewis and Dominic Horridge, OBI has become a big player in the consultancy market. Its landlord and occupier clients include Aviva Investors, Allied London, Bruntwood, Kinrise, Property Alliance Group, Booking.com, AO.com and The Hut Group (THG).
McLaren Property’s 330,000 sq ft Wellington Street scheme – approved by Leeds City Council earlier this month – will provide 17-storeys of Grade A office accommodation and offer a range of workspaces. OBI and Colliers are retained agents on the scheme.
Looking ahead again to the next 12 months Oliver Stainsby said: “We believe that emerging locations will create more opportunities for occupiers outside of the traditional Central Business District.
“Key developments projects throughout the city, particularly the ones on Leeds South Bank, will begin to take shape and move forward with their initial phases.”
“We also predict that growing businesses currently based in out of town locations, may consider moving into the city in order to attract and retain the highest quality staff and to sustain expansion.”
He added: “We anticipate an increased demand for space from flexible workspace providers, based on increased demand from occupies.”
“This will create a ‘land grab’ effect as new entrants to the market look to secure the best space ahead of competing operators.
“Pre-lets that enable delivery of new offices will create opportunities for flexible workspace providers to take the balance and activate the lower floors, allowing Landlords to stack modern workspace buildings for the forward-thinking occupier.” said Oliver.