The chief executive of Leeds City Council believes the local authority’s investment in infrastructure will be the key to unlocking future private sector development in the city.
Speaking exclusively to The Yorkshire Post, Tom Riordan said although the council had injected cash into private sector office schemes in the past, including £44m in 3 Sovereign Square in 2016, its current focus is on infrastructure investment.
Plans include a new bridge linking Sovereign Street in the city centre with the South Bank.
“We think that will unlock quite a lot of investment and lead to the redevelopment of the final plot on Sovereign Square,” Mr Riordan said.
“We’re always open to that sort of investment (the 3 Sovereign Square deal) but our bigger priority at the moment is to invest in infrastructure that’s going to unlock private sector development and also lead to affordable housing for the city.”
Mr Riordan was the keynote speaker at the launch of the Deloitte Real Estate Crane Survey for Leeds this morning.
The report showed that the amount of office space under construction increased significantly last year, from 460,690 sq ft in 2016 to 771,331 sq ft in 2017 – the second highest volume in a decade.
The amount of office space under construction has increased significantly, from 460,690 sq ft in 2016 to 771,331 sq ft in 2017 – the second highest volume in a decade. This includes 378,000 sq ft of pre-let space to HMRC at Wellington Place - the city’s largest-ever commercial property letting.
Completions in the Leeds office market, however, fell by almost 60 per cent in 2017, from 713,000 sq ft to 290,690 sq ft.
Following almost 10 years of stagnation, 2017 saw a long-awaited resurgence of residential development in Leeds city centre.
The number of residential units under construction across the city centre is at its highest since 2008. A total of 1,586 units, across five development sites, is more than double the 619 reported in the previous survey.
The average of 317 units per scheme also compares favourably with 2016 (77 units per scheme) and 2015 (53).
New residential schemes include the mixed-use development at Victoria Embankment, and the Climate Innovation District in Hunslet - believed to be the UK’s largest sustainable development. New towers at Bridge Street and Holbeck are also competing for the title of Leeds’ tallest residential building.
Deloitte said the rise in new construction is due to increased investor confidence in Leeds, and the firm believes the outlook for residential development in the city centre remains strong.
Richard Davis, partner at Deloitte in Yorkshire, said: “The returning confidence to the residential market signals the end of the misconception that Leeds has an oversupply of housing in the city centre. We expect this developer confidence to continue to strengthen through 2018 and beyond, with more developments in the pipeline. This will include a focus on the build-to-rent and student accommodation markets.”
The other key growth area for development in Leeds is in the education sector. The crane survey recorded four new starts in 2017, adding over half a million sq ft into the development pipeline. This included Leeds City College’s Quarry Hill campus and developments at both the University of Leeds and Leeds College of Building.
The hotel sector in Leeds was subdued during 2017. The sector saw four new starts in 2016, but none last year.
However, plans for several new hotels are in the pipeline, including at the former Tetley Brewery site on Black Bull Street and a ‘Hampton by Hilton’ at Bridge Street. Together they will deliver approximately 600 rooms.
Simon Bedford, Deloitte Real Estate partner, said: “Leeds has a healthy city centre economy, with improved job opportunities as a result of the increase in office and retail space in recent years. What we are now seeing is a refocusing of activity away from the core of the city centre and into outlying areas such as South Bank and Holbeck. The continued redevelopment of these areas will help double the size of Leeds city centre over the next few years.”