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Jones Lang LaSalle
Office Property Performance
DLA Design Group
The Leeds office market picked up momentum in 2012, achieving its greatest level of occupier demand since the beginning of the recession. Figures from the Leeds Office Agents' Forum revealed that last year take-up totalled 405,951 square feet - the largest leasing volume in four years. This is a pleasing rise from 2011 levels, when take-up stood at 398,159 square feet. It seems Leeds is performing well across all segments, with the out-of-town market also improving significantly in 2012. Some 340,374 square feet were transacted over the year. This marks an increase of 21 per cent compared with the year previous, when 280,754 square feet changed hands. However, there was a slight drop off in demand during the final quarter of 2012. In Q4 city centre volumes totalled 70,361 square feet across 23 deals. This is a decrease in take-up quarter-on-quarter of 42 per cent. Nonetheless, several notable property investment deals took place, including the letting of 9,839 square feet at 55 St Paul's Street to DLA Design Group. Elmwood Design also let 9,473 square feet at the Round Foundry. In the last three months of 2012, there was however an 11 per cent increase in out-of-town market take-up, taking the quarterly total to 66,370 feet. This was the result of 26 deals, with the largest taking place at West Park, which enjoyed the freehold sale of 9,000 square feet. Richard Dunn, Partner at Sanderson Weatherall and spokesman for the Leeds Office Agents' Forum, said: “Leasing volumes remained steady in Q4 but, on the whole, the total annual figures show that the office market has remained robust especially given the economic outlook. The bounce back in city centre take-up, which reached the highest level seen for the last four years, is particularly encouraging and shows that, whilst there is a degree of occupier caution, we are seeing improving sentiment." However, regional markets are still unable to achieve the larger sales found in London and Leeds has once again proved no exception to this rule. Throughout the final quarter of 2012, no deals over 10,000 square feet were recorded, which limits the growth of the sector. Nonetheless, Jones Lang LaSalle expects this to change in the year ahead, especially during the first quarter.
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