It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Eamon Fox, Knight Frank partner and head of offices and development in Yorkshire.
Demand for space in Leeds remains strong, despite all the challenges we faced in 2022. In addition to the usual existing occupiers in the city looking to move due to lease breaks or a flight to right-sizing and quality, there are also sufficient requirements for office space in Leeds from new occupiers. Some of these are media companies attracted by Channel 4 opening its new headquarters at Rushbond’s superbly-restored Majestic in the heart of the city.
There is no doubt that Channel 4 has brought a media presence demand that we haven’t seen before in the city. The Channel 4 knock-on effect has been significant, building on the city’s reputation of being a magnet for bright young tech, media and creative companies, with state-of-the-art buildings such as Kinrise’s 34 Boar Lane and Boultbee Brooks’ Tailors Corner welcoming some of the best in class. We are now seeing law firms open in Leeds as a direct result of the investment by Channel 4, as well and pre and post-production firms.
There are some tremendous new office buildings coming on stream next year, notably City Square House, where 83,000 sq ft has been pre-let to DLA Piper UK and we are due to announce a significant pre-let in the same building during early January 2023.
Globe Point and 12 King Street all have already attracted prestigious pre-lets in 2022, underlining the strength of the office market in Leeds. The quality of these buildings means that headline rents should reach a record high of £38 per sq ft by the end of 2023.
Two trends are worth noting – the strength of legal sector continues apace, with Knights taking space at the Majestic, DLA moving to City Square House and Brabners opening a new office in the city. At the same time, the regions continue to attract significant new occupiers like the National Infrastructure Bank, Bank of England and the Financial Conduct Authority for example. The regulator first announced its plans to open the office last July and said it would be hiring at least 100 staff in the first phase.
Finally, I believe deals will get smaller by up to 30%. Working from home has led both employers and employees to realise that they don’t need the same amount of space as they have needed in the past. However, although individual space requirements may diminish, there will be a flight to quality, with occupiers willing to pay more to secure shiny new state-of-the-art workplaces that promote strong mental health and employee wellbeing. This should help to further improve the quality of space on offer in the city and push rents in Leeds to new heights.
