Leeds Office Rents Hit Record £52.50 per Sq Ft

A severe shortage of new top-grade space has pushed headline rents to a new high, even as occupier demand rebounds across the city

Leeds office rents have reached a record high, as a shortage of the best space collides with recovering demand. Headline rents rose again in the second quarter to £52.50 per square foot, according to new figures from property firm Colliers, after law firm DAC Beachcroft agreed a benchmark-setting deal at 31 Wellington Street. Fellow law firm Gateley has since agreed space at the same level, and quoting rents of £55 per square foot are becoming the norm. The rise underlines a market where demand is strong but the supply of high-quality offices is failing to keep pace.

Why This Matters For Leeds

Rents are the clearest signal of how tight the Leeds office market has become. For landlords and developers, they make building and refurbishing prime space more attractive. For occupiers they mean higher costs and fewer choices, and may push some towards second-hand space or out of the centre. A city that wants to attract and keep major employers needs a pipeline of quality offices at workable rents. Right now, demand is comfortably outstripping what is available.

Why Leeds Office Rents Keep Rising

The driver is scarcity. Colliers put the city’s grade A vacancy rate, the share of top-quality space sitting empty, at just 0.9%, and expects it to fall further as almost no new supply is due. The only new office scheme completed in Leeds so far this year is Vastint’s 75,000 sq ft Kellstone building at Aire Park, which reached completion in June and is already largely let, with Eversheds Sutherland having taken 47,000 sq ft. With so little new product, occupiers determined to stay in the city centre are increasingly taking premium second-hand space instead; Colliers recorded six such deals in the second quarter, including activity at Majestic, Platform and 34 Boar Lane. That competition for a shrinking pool of good space is what keeps pushing rents up.

“Occupier demand remains firmly focused on high-quality grade A space, while available supply continues to tighten.”

— Dominic Pozzoni, Head of National Offices, Colliers

Strong Demand, Not Enough Space

The rent record comes against a backdrop of recovering activity. Take-up in the second quarter reached almost 180,000 sq ft, more than five times the slow first quarter, led by Luminate Education Group’s 71,572 sq ft deal at Livingstone House and food manufacturer Greencore’s 39,468 sq ft letting at Broad Gate. Technology and professional-services firms accounted for around half of all space taken in the first half. But with development pipelines constrained and businesses prioritising the best workplaces, Colliers expects further upward pressure on rents through the rest of the year. Some relief should come later as larger schemes such as Wellington Place and Aire Park’s next phases sit in the pipeline, but for now the pressure on Leeds office rents looks set to continue.