Commercial Property Finance News:- Leeds success as a magnet for media and tech companies means prime office space is set to command record rentals, claims Savills.
The estate agency said office supply has been falling since 2015 with 2018 seeing a 31 per cent drop and a 9 per cent decrease in grade A premises.
Commercial research associate director, Clare Bailey said: “It’s a very desirable city and rents are very competitive. It’s a good place to build new offices or refurbish as supply is so low.”
Companies looking to develop in the city are well placed to gain commercial property finance given the current demand.
Commercial Property Finance – Leeds Becomes a Media Draw
Channel 4 and Sky are among the latest media companies to have offices in the city where take-up reached 657,000 sq feet during 2018. This exceeded the ten-year average of 490,000 sq ft by 34 per cent. Private sector office-based employment within Leeds city region has grown by 15 per cent over the last five years and is forecast to expand by a further 7.9 per cent over the next five.
Channel 4 is to move more than 200 staff to the city with its studio headquarters expected to go live by 2023. Sky is growing its technology hub around Leeds Dock with developer Vastint set to transform the former Tetley Brewery site in the South Bank shortly. Vastint is creating 850,000 sq ft of employment space, including a dedicated spot for creative industries, as well as 150,000 sq ft of retail, cultural, educational and leisure space.
Tech Mushrooms in the City
Property developer Bruntwood has been awarded £2 million to establish a tech hub at its new Platform scheme above the railway station. Leeds has already seen a rush of tech-based firms move south of the river over the last few years, particularly around the Holbeck area. Tower Works, Globe Place and Grove Square will also provide 262,600 sq ft of space for this sector.
Leeds has the highest concentration of digital, data and technology innovators in the UK with 35,000 tech jobs, according to Tech Nation 2018. The sector is expected to increase by 10.7 per cent over the next five years, with digital jobs in the region predicted to grow at 10 times the rate of non-digital.
Savills said £326 million of office investments were transacted in 2018 – a 109 per cent rise on the ten-year average, as investors seek enhanced returns underpinned by rental growth and growing demand. Nearly half, 47 per cent, of this came from overseas investors who Savills said are looking outside Manchester and Birmingham as they become more comfortable with regional office markets.
Yorkshire’s economy is expected to accelerate by 8.3 per cent over the next five years compared with a 5.7 per cent growth over the last five.