Behind the growth of the rising star of the North

COMMENT Leeds is fast establishing itself as the rising star of the North, with thriving sectors ranging from an exceptionally strong logistics market through to world-class education facilities and an ever-growing regional office market. This, coupled with an attractive work/life balance, means Leeds is now the UK’s fastest-growing city. So what is it that makes Leeds so attractive and what is driving this growth? Leeds has long been a trailblazer, with its longstanding centre of excellence for the financial and business services sector and an impressive leisure and retail offer shaping the look and feel of city. It’s the past decade, however, that has witnessed the most significant change. We have seen outstanding growth in sectors such as education, tech and life sciences along with a clear drive towards delivering improved ESG credentials – Leeds City Council has committed to reduce the city’s direct emissions to net zero by 2030, making it a greener, fairer and healthier city. Look and learn The higher education sector in Leeds has been gaining popularity and now has 39,000 students including 11,000 international students from more than 170 countries. This puts Leeds firmly on the global map and we are seeing an influx of overseas investment capital as a result. Leeds Beckett University has invested £80m in a cutting-edge creative arts building, and the University of Leeds has invested £40m in Nexus, a dedicated community for tech-led businesses to accelerate growth – part of more than £500m of investment across the campus. The wider Leeds and Yorkshire region also has an exceptional life sciences talent pool, with more than 196,000 people employed in health and science jobs, with nine universities producing some 15,000 STEM graduates each year. Leeds is also home to six world-leading life science clusters of academic excellence and commercial innovation, as well as having the largest concentration of medical device companies in the UK. Four out of the five NHS national offices are based in Leeds, including NHS England, as well as some of the world’s largest healthcare data platforms, including NHS Spine and NHS database. An increasing number of tech companies are choosing to put roots down in Leeds, which means more jobs, more innovation and more opportunities for collaboration. Tech occupiers are expected to lead demand for office space, perhaps unsurprising given that the city has the highest number of scale-up digital companies outside of the South East. Furthermore, the north-shoring trend will push firms into a strategy of smaller regional offices and Leeds is already attracting major players, demonstrated by the likes of Burberry, Channel 4, HMRC and the recent opening of the UK’s first infrastructure bank. Positive environment The future of Leeds will be greatly influenced by all elements of ESG. In particular, we expect to see a growing commitment to green buildings by occupiers and investors alike. Many office occupiers are increasingly seeing the benefits a positive environment can give their staff, improving wellbeing as well as instilling cultural values and a sense of belonging. In fact, office demand in Leeds is recovering strongly and we anticipate offices will continue to be a dominant investment choice. For occupiers, green credentials are moving swiftly up the agenda and buildings that match a sustainable ethos will have greater impact on leasing decisions. Investors are also now delivering on ESG and the argument is less about a green premium and more about a hedge against a brown discount. This will be further fuelled by sustainability aligned borrowing facilities, with more favourable terms available once certain green criteria are met. It’s clear to see that there is a lot to be excited about when it comes to the future of Leeds. The city continues to go from strength to strength, with a number of growth sectors and a forward-thinking ESG agenda, nowadays appealing not only to homegrown investors but those throughout the rest of the world too. Clare Bailey is a director of commercial research at Savills