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Positive outlook for Leeds' office market
Leeds has undergone a significant investment in recent years, even throughout the uncertainty of the COVID-19 pandemic. Construction activity continued in the city throughout lockdown restrictions, with contractors developing new ways of working to adhere to social distancing and the continually evolving government guidelines in order to minimise the impact of COVID-19 on the local economy.
The high profile relocations of HMRC and Channel 4 have been further supplemented by the BBC's recent announcement to relocate a number of its national journalism roles to Leeds, as well as the UK Infrastructure Bank, Department for Transport and the Bank of England's commitment to the city.
All this provides a positive outlook for the region and increased demand for high quality workspace to attract workers back to the office once social distancing restrictions are lifted. In a report published by Cushman & Wakefield, the Leeds office market scored the highest in terms of resilience due to the take-up of office space by public sector tenants, as part of the Government's Levelling-Up strategy. The scale of these relocations will also increase the demand for build-to-rent city centre apartments, which have seen completions at levels equivalent to 2007/08, and with signs of continued growth.
In addition to the thriving districts at Wellington Place and City Square, the emerging quarters of Leeds are beginning to take shape, with the Arena Quarter seeing completions in large scale purpose built student residential accommodation. The Civic Quarter is also in the process of benefitting from the multi-million pound investment in The Leeds Teaching Hospital NHS Trust's new children's hospital where demolition is currently ongoing. Leeds City Council has just granted planning permission for McLaren Properties' proposed repurposing of the Leonardo and Thoresby buildings adjacent to Millennium Square, to bring these buildings back into use alongside a new build student residential block.
G&T has been proud to work with many clients on projects which have contributed to the economic rise and cultural growth of the city. Within the last 12 months we have provided Cost Management and Project Management on many projects which have reached completion or a construction milestone including projects at Wellington Place, 12 King Street, the reimagined 1920s Majestic building, Highline's Monk Bridge residential scheme and Leeds University's Sir William Henry Bragg Building.
A large proportion of these projects are focused in and around City Square, where earlier this year the BCO Northern Committee hosted a socially-distanced tour showcasing the newest additions including the repurposed Majestic building and the continually expanding development of Wellington Place.
The central location and proximity to the main train station of City Square creates a prime location for both commercial and residential developments. The recently unveiled plans for the £3.5m redevelopment commissioned by Leeds City Council to transform part of the City Square into a woodland "glade" will reduce congestion, create an outstanding place for both residents and visitors as well as support the Leeds City Region Enterprise Partnership's goal to be a net-zero carbon economy by 2038.
The Majestic building, 12 King Street and Wellington Place are all significant developments within the City Square district. The rejuvenation of this area has also seen a comprehensive refurbishment of 1 City Square and the Queens Hotel as well as the remodelling of 34 Boar Lane. The new City Square House by MRP will be another key feature in the Leeds skyline and will add a further 140,000 sq ft of prime office space to the Leeds market.
The continued growth and expansion that Leeds city centre has experienced over the last 10 years is showing its robustness and ability to continue in the face of adversity. In figures reported by the Leeds Office Agency Forum, the first quarter of 2021 saw a 17% increase on the same period for 2020 (pre-pandemic), therefore showing the high level of confidence there is within the local market.
The office market is adapting to the evolving requirements of occupiers by focusing on tenants' wellbeing and ways to incentivise the workforce to return to the city in a new form of hybrid working with increased flexibility. A high quality office environment, sustainability, smart technology and external amenities are all now becoming the norm in new and refurbished buildings, with developers being bullish about the imminent return of workers to the city centre.
This sustained and continued investment by the private sector also contributes to the development of major infrastructure improvements within the city, such as the modernisation of Leeds Railway station, the introduction of a District Heating Network and the City Connect cycle routes.