By Pete Gleave, Assistant Director, Deloitte Real Estate
This week saw the launch of our annual Leeds Crane Survey, which highlights a long-awaited resurgence of residential development in Leeds city centre with a significant increase in the amount of new build developments coming forward compared to recent years, which I have to say is a welcome change. The report also reflects a healthy city centre economy with improved job opportunities, a result of the significant increase in office space under construction, the second highest volume in a decade.
Residential market returns to Leeds
Construction activity has been driven by the residential sector with the long awaited resurgence of residential development in Leeds City Centre, with five residential new starts and the highest number of residential units under construction since 2008.
The returning confidence to the residential market will hopefully mark the end of the misconception that Leeds has an oversupply of residential accommodation in the city centre. The pipeline remains strong with some exciting developments in the offering which will further increase the attractiveness of Leeds city centre as a place to live. It is likely that the residential market will only continue to grow in 2018.
Pre-lets driving office growth
In terms of other sectors, the office market continues to be durable and whilst we have seen a slight drop in the amount of floorspace complete (approximately 291,000 sq ft), the amount of floorspace under construction now stands at approximately 771,000 sq ft, the second highest year on record. The majority of this floorspace is at 7 & 8 Wellington Place, which is being driven by the 378,000 sq ft pre-let to HMRC for a new Government Hub. This represents the largest ever commercial property letting in Leeds, demonstrating public sector commitment to investment in the city.
Education facilities continue to grow
For the third year in a row, there is over 500,000 sq ft of floorspace under construction in the education sector. The majority of this is a result of two new proposals by the University of Leeds for the Nexus Innovation and Enterprise Centre and the Advanced Research Building providing new and improved research facilities and additional teaching space. The provision of facilities such as these will cement the University as one of the UK’s top higher education institutions.
High quality student accommodation provided
Continuing the higher education theme, we have also seen a return of high quality student accommodation with developments starting at St Alban’s Place and Cookridge Street. The introduction of luxury student accommodation such as these, reflects the changing needs of students with additional amenity space and services beyond the traditional cluster flats we have seen in the past.
Positive outlook for 2018
In conclusion 2017 was a positive year for the city. We are now starting to see the number of new build developments increase along with the return of the residential market. With a strong pipeline in the offering and a number of initiatives being progressed by both the public and private sectors, it is likely that this success will be maintained in 2018.
Pete is an Assistant Director in the Planning and Development team based in Leeds. He leads on a number of city centre projects across the North of England and also has experience of advising national clients on a range of retail and mixed use projects across the country.
To find out more about development in the UK's major cities, click here to view our interactive Deloitte Crane Survey online tool.