Leeds construction sector delivers record completions as eyes turn to the future has been saved
Leeds construction sector delivers record completions as eyes turn to the future
31 January 2017
- Deloitte Real Estate Cranes Survey sees highest level of office space completed since 2007
- More than double the average annual total of retail floor space was completed in 2016
- Most hotel starts in 10 years
- Focus shifts to city’s South Bank and train station developments
Leeds saw 20 major construction scheme completions added to the city skyline in 2016, more than double the eight from 2015, including significant projects such as Victoria Gate, Central Square, Leeds’ train station south entrance and Wellington Place.
The Deloitte Real Estate Leeds Crane Survey, also shows that 16 new schemes started on site in 2016 across all sectors, equalling that of 2015, the joint highest since 2007.
The Leeds office sector led the way, delivering 713,000 sq ft of space, the highest level of office space completions since 2007, alongside nearly 600,000 sq ft of retail space, more than double Leeds’ annual average.
Richard Davis, partner at Deloitte in Yorkshire, said:
The level of completions in 2016 demonstrates the appetite for development in Leeds and the desire among office occupiers for new office space. The retail development was also a significant boost, giving the city a premier league offering that exceeds that of many other UK cities.
We monitor the number of new starts on site, and have seen a healthy increase in hotels under construction, which demonstrates the continued developer and investor interest in the city and a confidence that its economy will continue to grow.
In the office market 10 schemes were completed, making the biggest contribution to the changing face of the city. Central Square, with its distinctive sloping glass atrium, was the most significant completion at 202,000 sq ft, with No5 and No6 Wellington Place at 75,000 sq ft and 104,000 sq ft also contributing to the redevelopment of the city’s business district.
There were six new office construction starts in 2016, with five of those being major refurbishments of existing properties. 3 Wellington Place was the only new build development to commence, a speculative development covering over 106,000 sq ft.
In the retail sector, the completion of Victoria Gate delivered Leeds’ latest shopping destination. It provides 596,500 sq ft of retail space for 23 new stores, 17 of which were new to the city.
The city’s hotel sector saw more starts on site than at any other time in the last decade, reflecting the continued growth in Leeds as a destination for business and leisure visitors. Four new developments began in 2016, set to add an additional 385 beds.
However, the city’s residential market continues to underperform, particularly in the city centre. There were only three new starts in 2016, with two of those taking advantage of permitted development rights, which allow the conversion of office buildings into residential. There were only three completions in 2016, adding 174 units to the city’s housing stock.
Richard Davis added:
One of the reasons for the slowdown in city residential development is the continued perception that Leeds has an abundance of vacant city centre flats. However, 2016 has very much been about the culmination of a sustained period of development and has seen the realisation of some key sites and schemes in the existing city centre. The completion of the office developments, with much of the space occupied, points to a healthy city centre economy with increased job opportunities. This should have a positive knock-on effect on other sectors, particularly leisure and residential, and the increase in hotel stock and retail space is a demonstration of Leeds’ continued growth and appeal as a tourism destination.
“What is clear when you look at the pipeline for future development, is a refocusing of activity away from the traditional core and onto the South Bank. The opening of Leeds’ train station south entrance in January 2016 has already made a significant impact, but the whole of the South Bank regeneration area has the potential to double the size of Leeds city centre, making it one of the largest city centre regeneration initiatives in Europe. Forecasts by Leeds City Council suggest development in this area will provide 35,000 jobs across the financial and professional and creative and digital sectors, and 4,000 homes.
Notes to editors
About the Leeds Crane Survey
Deloitte Real Estate’s Leeds Crane Survey is the definitive review of construction in Leeds, and is seen as a barometer of developer sentiment and future supply. This report measures the volume of development taking place across Leeds and its impact. Property types include office, retail, leisure, residential, student accommodation, education and hotels. The areas covered in the report are: city core, city fringe and water fringe, and includes insight from developers building new schemes or undertaking significant refurbishment of the following:
Office -10,000 sq ft,
Retail – 10,000 sq ft,
Residential – 25 units,
Education, leisure and hotel schemes – significant scheme for inclusion.
The report is carried out by Deloitte’s in-house real estate team in Leeds who have monitored construction across the city. Deloitte’s field research is then verified with direct industry links and in-house property experts. The last edition was released in February 2016. The report covers the period from January 2016 to December 2016 and has been running since 2006.
Deloitte Real Estate’s commercial property research team is focused on producing thoughtful and insightful publications, as well as comprehensive bespoke reports for investors, developers and occupiers. www.deloitte.co.uk/cranesurvey
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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