Office building is down as build-to-rent hits a record in Leeds
The number of new office construction projects more than halved in Leeds last year but there were record levels of development in the residential, student accommodation and education sectors, according to a new report.
Deloitte’s annual crane survey, which looks at construction in Leeds, Manchester, Birmingham and Belfast in 2019, found that overall, new construction starts in the city fell from 21 to 12 last year.
There were only three new starts for the office sector in Leeds in 2019 - all refurbishments - compared to seven in 2018 following a strong period of construction and take-up the previous year.
Nolan Tucker, director at Deloitte Real Estate in Leeds, said: “Developers have taken their foot of the gas following record completions in the past two years.
“Occupier demand is still high in Leeds but the pipeline for 2020 office development currently remains limited with few planning permissions for new office buildings.
“We expect this pipeline to grow during 2020 to meet continued tenant demand."
Meanwhile, the survey shows that residential developer confidence is high as there were 2,832 units currently under construction - a 21 per cent increase on 2018.
It is the second highest level of residential construction recorded since 2007.
This sector is the busiest in terms of new starts, with four in 2019, up one from 2018.
Seventy eight per cent of residential developments under construction are for the build to rent market, the highest proportion in Leeds Crane Survey history.
Mr Tucker said: “Our latest crane survey shows that investors are looking more to the long term, as they focus on building more build to rent residential units.
“Developers are recognising the positive impact that big businesses moving to the city centre could have on graduate retention and consequently on demand for high quality rental accommodation.”
Last year was also a record-breaking year for student accommodation with 2,799 bedspaces under construction including one new start set to deliver 407 bedspaces.
Nolan Tucker said: “Student housing is a very strong sector for Leeds, with substantial development, particularly in the northern part of the city centre.”
Meanwhile, 419,758 sq ft of educational floorspace completed in 2019, the largest amount in the history of the Leeds Crane Survey, and a further 483,535 sq ft is still under construction for institutions including Leeds University, Leeds College of Building and Leeds College of Art.
Mr Tucker said: “The growth of the ‘Leeds Innovation District’ is facilitating closer relationships with the private sector.”
He added: “We expect this trend to continue as the Leeds Innovation District gathers pace.”