Posted 7 June, 2021 OBI BLOG
The past 12 months has seen sentiment and the future of the city centre office market, discussed and debated in light of accelerating trends and impact of the pandemic. As we emerge from the other side and lockdown restrictions ease, we are experiencing a large increase in enquiries, inspections and transactions across the city.
The first quarters take-up figures support this renewed optimism with 168,996 sq ft transacted, an increase of 17% on Q1 2020 (144,231 sq ft). Within these figures, DLA Piper cemented their city centre footprint long term, finalising their pre-committing to 83,012 sq. ft. at City Square House, which will deliver new Grade A workspace overlooking Leeds train station and City Square.
March saw another flagship deal for the city complete, Labcorp, a leading global diagnostic and drug development company also pre-commit to CEG’s Drapers Yard, a building forming part of Temple in the heart of the Southbank. Although a consolidation of multiple locations, this investment in Grade A offices is testament to the quality of workspace on offer throughout the city and Leeds as a powerhouse in the health and life science sector.
The Bank of England’s announcements for a new northern hub situated in Leeds alongside proposals tabled as part of the 2021 Budget will see the country’s first infrastructure bank to base itself in the city, which is exciting news. Leeds’ strong foundations and reputation within this sector, renowned as a financial services powerhouse looks set to pay dividends with a raft of inward investment planned which will pave the way for new jobs and economic recovery.
As a proportion of the pent up demand comes to fruition in the office sector, we are experiencing an increase in demand for fully fitted and serviced solutions. As expected, there remains elements of caution from occupiers, favouring workspace which can offer flexibility, cost transparency and mitigate the need for significant capital spend associated with traditional fit-out costs on conventional workspace. As a result of this, managed workspace centres are seeing occupancy levels increase following the pandemic, which is a positive sign. Conventional landlords are now exploring and beginning to deliver hybrid products, offering fully-fitted solution on all-inclusive flexible terms, we expect demand and subsequent supply of this hybrid approach to increase significantly over the next 12 months.