Leeds had somewhat of a golden streak in 2019. Channel 4’s relocation of its national HQ to Leeds was one of the key highlights for the city, endorsing it as a major creative hub.
During the course of 2019, take-up in the city centre boomed, reaching 744,625 sq ft, a 13% uplift on 2018. Investment soared too, topping £900m by the end of 2019, a 52% increase on the previous year and 140% increase on the long-term average.
The office investment market was hot, representing some 65% of the total investment, led by two deals by Legal & General – the £243m purchase of Quarry House from R20 and the £211m acquisition of 7-8 Wellington Place from Hermes Investment Management and Canada Pension Plan Investment Board.
Leeds had the largest financial sector growth outside London and has seen faster job creation than both Manchester and Bristol since 2014.
It was absolutely leading the way in 2019.
But then March 2020 came and Leeds, like many other cities, saw transaction activity all but dry up in the face of coronavirus. Savills’ latest figures for the city show a 57% drop in investment figures for the first six months of 2020 to £137m and a 63% fall in take-up to 160,146 sq ft.
Now, as the country starts to slowly rebuild itself, Leeds will need to work hard to make sure it remains desirable to investors and occupiers and that it can again regain its crown as one of the UK’s best-performing regional cities.
Time and confidence
For Patrick Carter, director of office agency at Savills in Leeds, the return to form is just a matter of time and confidence.
That confidence has already been boosted, of course, with the promotion of Leeds United to the Premier League, a move that is expected to add £78m a year to the city’s coffers.
“What we will see on the back of that, and hopefully over the next few years, will be a real increase in investment,” says Carter. “They are already anticipating £3m to be pumped into the local economy per home match day, which will be a real boost to the leisure and the retail industry.
“And from a business aspect, it will raise awareness for the city. That is key. It is nothing but a positive story for the city.
The Premier League contributes some £7.6bn to the UK economy and is broadcast in 212 global territories, giving Leeds the opportunity to showcase itself to some 4.7bn people around the world.
It is a promotion that business and city leaders alike believe will support Leeds’ economic recovery post Covid-19 and should bring people – and business and investment – back to the city.
The road to recovery
Carter says the city is already on the journey back to growth.
“There’s a lot talk around companies downsizing and trying to get rid of space and grey space coming into the market,” he says, “but what’s not being talked about and promoted is the way that businesses have adapted.”
Carter believes that Covid-19 has not slowed businesses down. He thinks it has accelerated businesses, pushing them forward five years in the space of six months.
“There are positives,” he says. “We’re representing a number of tenants who are just changing their office layout. It’s not necessarily businesses downsizing, this is businesses staying at the same size, rethinking tenant fit-out, being more open and encouraging and really evolving this element of placemaking and making the workplace an attractive place for people to come.”
Creating attractive places, where people really want to be is key. And for Kate Hainsworth, chief executive of Leeds Community Foundation, this is something that Leeds has always done well. She says the city’s “real strength” comes from the fact it cares about the places in which people work.
“Employees care about the space where they work,” she says. “That is a real strength of Leeds, it has been fantastic at developing not just a start-up environment, but attracting a food industry, the retail sector and communities.”
Attractiveness is key
The start-up and tech community could be the sector that helps put Leeds the city not just Leeds United back in the premier league.
Stuart Clarke, festival director of Leeds Digital Festival, says lockdown has seen tech companies in Leeds come together to support the local economy through this hard time but he now wants to see the city support start-ups so they can grow and give back even more. And so they can start bringing people, business and investment back to Leeds.
“If we’ve got empty shops, let’s turn them into start-up offices,” he says. “Make it £20 a month for a desk instead of £300 a month. Trying to attract people back into the city centre is really, really important. We all want a vibrant city centre and making those offices as safe as possible, as attractive as possible, will get people back in.”
“What we are starting to see now is the emergence of confidence and the key thing that we’ve got to focus on is getting that confidence back,” adds Carter. “It’s not going to be a snapback, it’s not going to be this V-shaped recovery that originally was forecast, but as things slowly get back and the momentum gathers, obviously with that the investment will come.”
Watch the conversation in full here
The panel
- Patrick Carter, director of office agency, Savills (Leeds)
- Stuart Clarke, festival director, Leeds Digital Festival
- Kate Hainsworth, chief executive, Leeds Community Foundation
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