Commercial Property update - a brighter future?

After the very dark economic years of the Credit Crunch recession the property markets of Leeds saw stabilisation and growth between 2012 and 2015.

In the Leeds city centre retail sector this was most characterised by the opening first of Trinity Leeds and later Victoria Gate, Leeds, anchored by John Lewis.  The award of Best Shopping Centre in the World to Victoria Gate is a great accolade for Leeds.

The office market also saw considerable activity with major prime office buildings being constructed at Central Square on Wellington Street, at 6 Queens Street and notably the extensive master planned MEPC Development of Wellington Place on the south side of Wellington Street.

The Brexit Referendum outcome was one of the most momentous events of 2016.  Whatever one’s political views, it has cast a degree of uncertainty over the medium term future of the UK economy.  In the meantime, and nine months on, it would appear to be “business as usual” here in Leeds in the business property market.  It is likely however that as Leeds follows the south east generally - to judge the future local prospects here - a close eye should be kept on the capital.

One of the characteristics of the city centre office market over the last five years has been that tenants of good, modern but non prime accommodation, have been able to agree much shorter lease terms.  These give business owners a greater degree of flexibility and therefore control of costs.

We have been advising a number of occupiers on relocation within the city centre.  Due to the new development pipeline there remains a very good selection of good quality, well appointed office suites in the professional core.

Noticeably however, landlords remain keen to sacrifice longer rent free periods in order to be able to soften deals and achieve higher headline rents to bolster investment capital values.

The industrial market of the Leeds area mirrors that of offices in the city centre.  Following the vast reduction of the number of vacant units on the multi tenanted estates of south Leeds, rents have hardened.

Development land in the industrial sector is concentrated to the east of Leeds and particularly along the east Leeds radial route.  A number of design and build deals have been agreed there in recent years.

A final word of advice!  In the current market, and after a period of slower growth, landlords are increasingly addressing rent reviews and lease renewals more aggressively.  If as a tenant you receive Notice, take advice from Barton Legal – and call me for an initial discussion.

Nigel Tapp – Tapp Chartered Surveyors - (0)113 243 0920