Training companies set pace

In a slowly recovering market in Leeds, there is evidence of a shift in demand that has pushed training companies into seeking more space. That is good for the local economy and indicates a reaction to increased employment prospects but it also has a further significance, suggests Jeff Pearey of Jones Lang LaSalle. “It shows that what training companies provide is essential and that is recognised by the government who have, in effect, privatised part of the service to ensure that school leavers and older people are catered for.” He added that this is a good time for any occupier seeking space because there are “attractive deals available.”

Unlike some other parts of the UK, Leeds is not running out of prime office space. Figures from JLL show that take up in the first quarter was only 3,530 sq.metres (38,000 sq.ft.) with smaller sized deals continuing to dominate. “There will be an improvement in the second quarter,” said Pearey, ”because there are several significant deals coming through. The market feels better than a year ago and there has been an improvement in viewings.” The national picture has improved considerably with the second half of 2010 seeing a 36% rise in lettings in six top regional markets to a total of 510,950 sq.metres (5.5 million sq.ft.), reports JLL.

Training companies also featured nationally as seeking more space. Savills’ first quarter figures for development activity in the UK show that a large part of the country is considerably less active than London and the south east and that March saw a significant decline. The decline in development is mainly due to the public sector reducing its activity. According to Knight Frank in Leeds, prime rents will remain at £258.24 a sq.metre (£24 a sq.ft.), a decline of just over 10% since the peak of 2009. Alex Munro of Knight Frank commented: “Take up last year was 26,291 sq.metres (283,000 sq.ft.) or 45% below the ten year average.

New Grade A space available in the city centre was about 51,095 sq.metres (550,000 sq.ft.), which gives a vacancy rate of 11.6%, unchanged in the fourth quarter over June-September.” There is, however, a positive aspect to the figures because active demand is put at a healthy 39,018 sq.metres (420,000 sq.ft.).