Leeds dominates office investment in UK’s ‘big six’ cities
Leeds has drawn in more office investment than its major UK city rivals, after a record-breaking £526m was invested into its market in 2019.
Investment into the city’s offices soared by 66% compared with the previous year, according to JLL’s “big six” office market report, which covers Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.
The city managed to defy an overall decline in office investment volumes, which tumbled by 16% to £2bn across all six major cities during the year.
Leeds has drawn in more office investment than its major UK city rivals, after a record-breaking £526m was invested into its market in 2019.
Investment into the city’s offices soared by 66% compared with the previous year, according to JLL’s “big six” office market report, which covers Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.
The city managed to defy an overall decline in office investment volumes, which tumbled by 16% to £2bn across all six major cities during the year.
However, JLL pointed out that overall UK investment was down by 21% in 2019, hampered by political uncertainty, while office investment declined by 29%.
Leeds’ performance last year was driven by two deals, with L&G acquiring both properties involved: Quarry House from R20, bought for £243m; and 7-8 Wellington Place (pictured), purchased for £211m from a joint venture between Hermes Investment Management and Canada Pension Plan Investment Board.
Edinburgh also posted record investment levels in 2019, with £471m transacted – a 77% increase on the previous year.
Take-up to rise in 2020
Geographically, Manchester dominated take-up activity last year with 1.5m sq ft taken up, amounting to 29% of volumes.
However, the biggest deal struck outside of London last year was in Glasgow, where JP Morgan took 273,000 sq ft at One Central.
Total take-up across the “big six” in 2019 was 5.2m sq ft. This was below record-breaking figures in 2018, when 6.1m sq ft of space was taken up, but only slightly below the five-year average of 5.4m sq ft.
Chris Mulcahy, Manchester office agency director at JLL, pointed to four “juggernaut” deals, including BT’s deal to lease 200,000 sq ft at Assembly in Bristol, and Sky Bet’s takeover of 4 Wellington Place in Leeds, which took up 136,000 sq ft.
Spaces had also signed for 122,000 sq ft at 125 Deansgate in Manchester, while the Government Property Agency agreed to take up 110,000 sq ft at Birmingham’s Platform 21.
“With the political and economic headwinds, that’s a fantastic performance for the big six,” said Mulcahy. “It’s the third-highest [take-up figures] recorded.”
Mulcahy estimated there are nearly 3m sq ft of live requirements across the six cities. Total take-up is predicted to reach 5.5m sq ft in 2020.
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