With grade a space in the prime area continuing to be at low levels, and supply at an all-time low, the future of office space in Leeds is currently unclear. Owing to the continued strain on finance; building and development remains subdued and occupiers are restricted in their choices.
Within the industry there is a continued emphasis on the forthcoming major lease events that are due to take place in 2013 and 2017. These will provide something of a shake up for the office sector, and Leeds’ largest occupiers will have to make the choice between staying put or moving to a fringe location. The predicament that these companies are likely to find themselves in with such limited choices serves to highlight how office development in the city will have to change moving forward, in order that it can continue.
Slowly we are starting to see that developers are approaching office building differently, and with the traditional pre lets of over 50% almost non-existent it’s not difficult to see why. Developers finally, after the heady days of the early noughties are having to approach building in a much more responsible and realistic way, sourcing income through mixed let schemes and the such.
Whilst for some occupiers the prospect of sharing your office building with retail or leisure facilities is horrifying, looking forward it seems that mixed use buildings will have to be the norm if building in the city is to progress. Schemes such as The Whitehall Plaza project located in front of No 1 Whitehall Riverside is planned to include a 130-bed Premier Inn and 50,000 sq. ft. of Grade A office space. Such schemes provide far greater financial certainty for investors and building is set to begin in x.
Indigo Blu is another example of a mixed use – building. Most notable for being one of the few buildings to actually be finalised in the city this year the project combines circa 10,173 sq. ft. of office accommodation with 46 residential apartments. Whilst this is a less compatible coupling owing to conflicting tenures, this is an example of how developers are striving to maintain a level of building in the face of one of the toughest economies in recent times.
Ultimately following this model office building will become smaller and developers would be wise to keep to 70-100,000 sq. ft. where a good ratio of pre let is not unrealistic. Indeed this is not an entirely new phenomenon and if one looks at Leeds there are examples of mixed use commercial building which have been in existence for decades. The Merrion Centre is one example of this, mixing leisure, retail and office facilities the development has stood its ground through some of the toughest times including the situation we now face.
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Impression PR- PR Director
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