Lack of quality office space could hold region back

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PARTS of Yorkshire, including Leeds, are in danger of losing out to other regional markets because recent successes in securing new office and industrial occupation have drastically limited quality space availability, according to the region’s property agents.

The Leeds office market has heralded the strongest levels of take-up and absorption since before the onset of the credit crunch, which has diminished choice for occupiers.

Meanwhile, the lack of top industrial space across Yorkshire has led to a slow-down in overall take-up, with the reduction of stock leading to a fall in investment volumes of 18 per cent, according to research by Lambert Smith Hampton (LSH).

The largest Leeds city centre office transaction in the first half of 2013 was completed at Highcross’ Broad Gate scheme with Yorkshire Building Society taking 76,413 sq ft.

Vacancy rates for so-called grade A buildings in central Leeds are now at the lowest level since before the downturn – seven per cent and reducing – according to Colliers International’s Net Stock Absorption (NSA) study.

Roddy Morrison, head of offices, said: “We need more stock and speculative development is key.

“We are now in a pre-letting market and those who dare will win.” He added: “Manchester and Birmingham have experienced similar success over the last two years and are more able to sustain delivery against demand with more existing stock but also, crucially, they have speculative schemes coming out of the ground.

“Leeds will soon be at a competitive disadvantage to attract true foot loose occupiers, despite the fact that occupation costs are much lower than other major markets.”

Colliers’ NSA monitors changes in office occupation levels by showing the net change in total occupied stock within a given market. City core take-up reached 294,408 sq ft in the first half of 2013, a rise of nearly 100 per cent on the previous six months.

Total industrial investment across Yorkshire and the North East stood at £69.59m in the first half of 2013, compared to £85m in the first half of 2012.

Gareth Harris of RSM Restructuring Advisory LLP

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