Whilst the headlines and rhetoric around grand infrastructure projects and political ambition aimed at bridging the north-south divide have reduced in frequency and volume over recent months, it is businesses commitment to regional cities that speaks louder. The latest research, from property data provider CoStar, highlights those areas that occupiers are choosing, with Leeds ranked first in their Top 50 Office Activity Index.
Leeds recorded its strongest year for office leasing in 2018. Take-up of office space in the city centre reached 663,233 sq ft, 18% above the ten-year annual average. This figure was bolstered by local law firm Walker Morris signing for 76,000 sq ft at 33 Wellington Street. HMRC secured 60,000 sq ft at the new 3 Wellington Place scheme and elsewhere in the city aviation services firm the Dart Group took an additional 48,000 sq ft at the Mint Building.
Demand for space in Leeds was not just from large firms, a record number of transactions below 2,500 sq ft contributed towards Leeds’ high index ranking. Robust demand in 2018 has been further buoyed this year as Channel 4 announced that Leeds will be the location for its new national HQ.
Neighbouring powerhouse city of Manchester has moved into the top 5 alongside ‘second city’ Birmingham ranked at number 4. Both of which have also received a boost from the HMRC with significant lettings in each. Yet the diversity of demand that these cities attract is certainly fuelling growth for centres outside of London. Cost effectiveness, access to talent and housing are all contributing factors for employers looking to the regions.
CoStar’s research gives top-billing to both Cambridge (2) and Cardiff (3). Cambridge science parks continue to attract tenants, with the likes of artificial intelligence firm Darktrace and accountants PWC securing space in 2018. In Cardiff, significant inward investment and regeneration is paying off and now resulting in high tenant demand. Consumer body Which? has chosen 3 Capital Quarter for its first Cardiff hub. Likewise, fin-tech giant Monzo Bank has taken 14,000 sq ft has they continue on their growth path.
What this occupier activity index indicates is that the regional markets outside of London are buoyant. As businesses increasingly become location agnostic, cities and towns across the UK look to advantage and increase their attraction.
To see the full list go to costar.co.uk.