It is vitally important to remain positive in these difficult economic times and to remind ourselves that demand for space in Leeds remains strong, despite all the challenges we have faced this year. Two key facts stand out in the Leeds office market: Occupier take-up is 20 per cent higher compared with 10 years ago and eight per cent higher than last year. The continued resilience of the Leeds office market is fuelling development within the city, with rents set to reach a record high of £40 per sq ft by the end of 2024.
This is confirmation of the growing belief that the demise of the office, like the death of Mark Twain, has been greatly exaggerated. The anecdotal evidence over the past couple of months suggests it has. Employers are beginning to realise that their control over the working hours and practices of their staff is being steadily eroded and whilst dedicated staff will continue to give their all, less committed and scrupulous employees will use working from home as a free pass to do the bare minimum, if that. I believe this trend will continue during the next 12 months.
It is very significant that Amazon has issued a warning to staff who are not spending at least three days a week in the office. Meta, formerly Facebook, has told its workers to do the same. And if further proof were needed that working from home has officially been replaced by return to office, it was provided by Zoom. The firm, whose revenues jumped 300% during the first year of the pandemic, has asked employees to come in for at least two days a week. The city centre retail market is consequently picking up.
In Leeds, a couple of strong trends are worth noting. The first is the role that successful schools and universities are playing play in the social and economic growth of the city. Leeds is now set to benefit from the first-class education establishments in its midst, with the new Mathematics School of Excellence already open in Albion Street and Leeds Trinity University moving its city campus to Trevelyan Square in Boar Lane in September. Meanwhile the city continues to attract significant new financial occupiers like the National Infrastructure Bank, the Bank of England and the Financial Conduct Authority.
In more good news, the Channel 4 knock-on effect continues to be significant, building on the city’s reputation of being a magnet for bright young tech, media and creative companies, as well as tech-savvy law firms, with state-of-the-art buildings such as 12 King Street, Tailors Corner, 34 Boar Lane, Globe Point and City Square House welcoming some of the best in class.
Finally, I believe deals will get smaller by up to 30 per cent. There will be a flight to quality, with occupiers willing to pay more to secure shiny new state-of-the-art workplaces that promote strong mental health and employee wellbeing. This should help to further improve the quality of space on offer in the city and, as I have suggested, push rents in Leeds to new heights. 2024 promises to be an exciting year.
