SIGNS of a modest upturn in the property market should bring more investment to Leeds in 2010, says a major consultant.
CB Richard Ellis says that despite low investor confidence at the start of 2009, the highest quarterly deals figure for the las
t three years was achieved in the last quarter, including the city’s largest transaction for five years, culminating in over £157m of investment.
Prime commercial rents are also expected to hold firm in 2010, with relocation opportunities available to tenants and a focus on investment into good secondary assets.
Jonathan Shires, director of office agency for CBRE Leeds, said: “Sentiment is improving across the region as a whole as Yorkshire demonstrates its resilience against the global economic downturn.
“As a result of the turbulent economic backdrop, take-up in Leeds was some 19 per cent down from the 10-year average but demand was particularly healthy in the last quarter with 162,000 square feet of deals, including the largest deal for five years of 56,800sq ft to Yorkshire Water at Livingstone House, Clarence Dock.
“There was also an emergence of smaller deals as new, start-up companies emerged and existing organisations downsized.
“Whilst the public sector remains a key source of demand in Leeds, it was in fact the business services sector which took the most significant market share, accounting for 29 per cent of all space let in the 78 deals of 2009.”
Pressure
CBRE’s analysis suggests that prime rent in Leeds increased by £1 to £27 per sq ft. Tenants can now typically expect a 24-month rent free period on a 10 year lease.
Jonathan Shires said: “There will be some downward pressure on rental values with landlords continuing to offer occupiers favorable lease terms, although it is likely that quoting terms and incentives could harden towards the end of 2010.”
With an HQ in Los Angeles, the CB Richard Ellis Group is the world’s largest commercial real estate services firm with around 30,000 employees and more than 300 offices worldwide.
