Demand for more offices and homes has driven development to levels not seen since before the global financial crisis, particularly in the south of the city, which is more easily accessible since the new station entrance opened up.

Substantial committed improvements to regional rail services through the new TransPennine and Northern franchises will significantly enhance connectivity in the next few years. Plans for the second leg of HS2 include the delivery of five new platforms to join the West Midlands to the north of England by 2033. Leeds station will act as a catalyst for further regeneration in the south of the city centre.

A total of 2.9m sq ft of commercial space and 10,000 homes in the city centre have outline or full planning to be developed, however, many of these are dependent on the arrival of HS2.

Office space

We expect there to be a shortage of new Grade A provision in the city centre over the next two years.

3 Wellington Place, 109,000 sq ft is the only building offering larger floorplates within the next 12 months. Alongside this, there are a limited number of refurbishments including ‘Platform’ (120,000 sq ft), 7 Park Row (40,000 sq ft) and Benson House (73,000 sq ft).

With an estimated two million sq ft of lease events anticipated by 2020 and city centre take-up expected to reach a record-breaking one million sq ft in 2017, there is a growing need for city centre development.

The delivery of new commercial space will centre around the existing core of Whitehall Road/Wellington Street. However, as rents hit £28 per sq ft in these areas, some occupiers may well be pushed out.

A rush of tech-based firms have moved south of the river in recent years, particularly around the Holbeck area.

With the Holbeck Portfolio and Tower Works both in planning, these could provide an estimated 520,000 sq ft of space to meet the needs of mid-price office occupiers.

We have also seen signs of the South Bank stretching eastwards, including Sky expanding their technology hub around the lively Leeds Dock. Leeds’ ability to provide skilled employees and high quality urban workspace has meant that Sky is currently looking to expand on the space they have already taken within the city.

Legal services firms such as Addleshaw Goddard have also been attracted to areas south of the station including Sovereign Square. Its accessibility to the station, enhanced amenity space and high quality office provision has made it a desirable location for the professional sector to cluster.

The Government Property Unit (GPU) currently has a 560,000 sq ft requirement in Leeds and they are said to have earmarked Whitehall Riverside, Wellington Place, Latitude and the Holbeck Portfolio, which would be available over the next three years.

Of the total commercial space in the development pipeline, we expect 43% (1.2m sq ft) to be delivered within the next five years.

^{▲ Tower Works, Leeds}

Mixed-use

The proportion of mixed-use developments being delivered is particularly notable. Wellington Place is set to provide 160,000 sq ft of residential floorspace to the city centre market while Tower Works will provide 120 residential units and 130,000 sq ft of office space. From Savills What Workers Want survey, developers have recognised the importance employees place on proximity to work.

Emerging plans have been unveiled for a major mixed-use development on part of the former Tetley Brewery site in Leeds. Phase One will incorporate about 1,000 homes, a 400-bed hotel and 915,000 sq ft of commercial space, with around 160,000 sq ft of this given over to retail and leisure. The development will link the south of Leeds to the South Bank and the city centre, while also connecting the future HS2 station to Leeds Dock.

^{Source: Savills Research}

Private Rented Sector

Increasing demand has led to changes in the residential market. Vacancy rates in the housing market have fallen from 5% in 2010 to 3% in 2015, and are now in line with the England average.

This has encouraged institutional investment in the private rented sector (PRS), which is beginning to act as a driver of development within the city.

AIG and LIV are building out a scheme for 330 PRS units at the Clarendon Quarter on the north west edge of the city centre, and a further 1,200 PRS units are currently in the planning pipeline. Grainger has recently agreed to forward fund a PRS scheme on the former Yorkshire Post site for around £40m. This development will comprise 242 new rental homes and around 3,000 sq ft of commercial space.

Education, Education, Education

Office conversions are improving the education offering

Although change of use from office to residential is minimal in Leeds city centre, a number of office buildings are being converted to educational use, in a bid not only to take out some of the obsolete office stock within the city centre, but also to promote a mixed-use environment.

Elliot Hudson College will be relocating to HSBC’s former office block on White Rose Office Park and there are plans to turn the former KPMG office, No.1 Embankment, into a secondary school to cater for 600 students.

We are seeing signs of an emerging education district in the south east of the city centre. Both the Ruth Gorse Academy, and the University Technical College opened their doors during September 2016, to sit alongside the Leeds College and Leeds Building College.

With the University of Leeds and Leeds Beckett University both well established within the city, Leeds City Region must ensure it works at retaining and expanding its ‘talent pool’.

The hope is that Leeds’ education sector will bridge the gap between education and the workplace, help retain the ‘talent pool’ within the city and facilitate housing demand going forward.