Retail and Leisure
There were no retail-only new starts in 2021, however small-scale retail commercial spaces were delivered on the ground floors of larger mixed-use schemes including the Guinness Partnership’s Points Cross development, the former Crown Hotel and the Merrion Centre.
There were two leisure completions in 2021, the refurbishment of cultural asset Howard Assembly Rooms and the restoration of First White Cloth Hall. The latter forms part of the £1.5m Heritage Lottery funding for conversions and repairs to buildings on Kirkgate.
The Retail and Leisure sectors continued throughout 2021 to feel the effects of the COVID-19 pandemic, with a further lockdown in January and subsequent restrictions requiring Retail and Leisure sectors to chart their way through a range of challenging rules and rolling closures.
The completion of First White Cloth Hall and Howard Assembly Rooms have provided over 65,000 sq ft of new leisure space within the city, whilst preserving two of Leeds’ cultural assets for years to come. These completions come prior to the Year of Culture in 2023, and provide spaces for year-round cultural offerings in the form of music, performance and art. Opera North’s £18m Howard Assembly Rooms project has transformed its performance space through the refurbishment of the existing Premier House office building, multiple use changes to the retail units and restaurant, and the creation of a new Education Suite at ground floor level. This development also features a linkage to, and two-storey extension of, the adjacent Linacre/Harewood studios.
Despite limited construction activity in the Leisure sector, similar to 2020, larger schemes have continued to provide ground floor spaces for people to work out, socialise and relax. Notably the Points Cross development will feature a local pub and restaurant at ground floor level as well as commercial and retail space.
2021 saw the closures of major high-street giants Debenhams and retail group Arcadia, leaving significant gaps in the central retail core on Briggate and within the Trinity Shopping Centre. These closures reflect the shift in consumer behaviour to online shopping, particularly since the onset of the coronavirus pandemic. Online spending increased from around 9% of total retail sales in September 2011 to about 19% in September 2019 and rose still further during COVID restrictions to 34.5% in March 2020 and then 37% in March 2021. Although the level has fallen as restrictions to shopping in store have eased, online sales have remained high, at 28.1% of all retail sales in September 2021. Despite this reduction the proportion of online sales remains high compared to pre-pandemic levels.
Whilst early 2021 brought back a period of COVID-19 restrictions, further lockdowns have been avoided, providing some relief for the retail, hospitality and leisure sectors. The vaccination programme has been successful in allowing retail, leisure and hospitality to remain open. Increased levels of activity are evidenced by an increase in spending on leisure, eating and drinking out, compared to both the previous year and pre-pandemic levels. Deloitte’s Consumer Tracker (Q3 2021) reported a 41% increase in spending on eating from Q3 2020 to Q3 2021 (and a 22% increase from Q3 2019 to Q3 2021).
High-street shopping in Leeds will be enhanced by the Merrion Centre development. Over 10,000 sq ft is set to be refurbished for a Home Bargains store. The budget retail giant has retained a prominent position within the new development, which will continue to provide essential shopping for Leeds residents, as well as serve the ever-growing student population around the Merrion Centre.
Within the city centre LeedsBID (Business Improvement District) continues to enhance the city centre through a range of investments and initiatives, making it a better place to live, work, visit and shop. After a successful first term from 2015 to 2020, LeedsBID is set to continue its work in improving the city centre following a pledge of £14million from businesses in the city. This funding will be invested in the city centre, supporting the work the BID for another five years. Since its launch LeedsBID has been a catalyst for change through a range of projects that seek to make the city centre cleaner, safer, more animated, more welcoming, more skilled, greener and more connected. The BID has also provided a valuable contribution in bringing people back into the city centre through a series of events and installations animating public space, making the city centre more friendly and increasing footfall for local businesses.
Given the impact of COVID-19 restrictions on the retail and leisure sectors, the possibility of new COVID-19 variants represents a big risk. However, business continues to be supported by government measures. Arguably businesses have been able to utilise the financial support from the government, and the impact on this sector could have been much worse. However, it remains to be seen if these short- to medium-term support measures can support the long-term future of the retail and leisure sectors.
Despite strong headwinds for existing occupiers in this sector, opportunities appear to have arisen for more niche and independent retail and leisure offerings, which are on the increase, with new businesses like the Pink Room opening in the Corn Exchange, and independent businesses moving to larger premises. An example is Poppy’s Potting Shed, a successful lockdown business that is moving from Armley into larger 1,000 sq ft premises on Kirkstall Road. This can be seen as a positive outcome of the large shift to online shopping, with the desire for in-person leisure and retail being increasingly focused on the allure of independent businesses. The COVID-19 pandemic has therefore been successful in driving innovation and new formats within the retail and leisure sectors as businesses look to respond to shifts in consumer demand and behaviour.
Hotels and Culture
There was one new start in the Hotels sector in 2021, the refurbishment of the Queen’s Hotel, which also completed in Q3 2021. This low level of activity is consistent with 2020, when there was also just one new start. In Q3 2021 the Citispace Hotel on Regent Street completed, delivering 54 hotel beds.
Future trends look more positive, with the possibility of three new hotel developments in the pipeline, The Wesley Hotel, 17 Wellington Street and George Street which together could provide 268 new rooms.
In addition, new large mixed-use developments will include hotel beds. For example, the Leeds and Lisbon Square developments will include two hotels providing 198 and 300 beds respectively, continuing the trend seen in developments such as Caddick’s SOYO and Priestly Homes’s Great George Street.
Hotel occupancy rates in Yorkshire and Humberside dropped dramatically in 2020, from 79% (in 2019) to 44%, a trend consistent with the rest of England. Whilst occupancy rates have not fully returned to pre-pandemic levels, they recovered to 77% in 2021.
Proposals for new construction within the Hotel sector are mainly for the north east of the city centre; however large proposals such as the Victoria Gate Hotel are yet to come to fruition. There seems to be some hesitancy in bringing forward developments that have planning permission, no doubt exacerbated by uncertainty from the pandemic. A lack of travel for business or pleasure could see a further delay in construction of these permissioned developments, and the focus may be on refurbishments of existing hotel stock, as seen in 2021 with the Queens Hotel.
However, with increased occupancy levels and more people taking shorter holidays, there is some cause for optimism in the hotels sector. In addition, investment in cultural offerings and activities within the city centre should improve confidence in the delivery of the delayed pipeline for hotel developments.
The Queens Hotel benefitted from a £16 million refurbishment in 2021, which included renovations to all the bedrooms plus the addition of 16 rooms being (to a total of 232 rooms), a reinvented social hub, a transformed retail F&B offering via the Grand Pacific and Café Pacific, and a new on-site gym. The refurbishment adds an updated hotel offering to City Square for leisure and business travellers arriving from Leeds City train station.
The transformation of the Queens Hotel to a “place to meet with friends, colleagues or to seriously upgrade your ‘working from home’ surroundings” reflects the changing trends in both social and working habits. With the shift to flexible, co-working and short-term rental spaces there has been an increase in the demand for unique and readily-available ‘hubs’ within the city.
Leeds will champion culture in 2023, and the Year of Culture will see a wide range of events and cultural interventions taking place. Culture will be a feature in Leeds over the next few years, as plans are in place to transform City Square into a rolling exhibition space for artists, engineers, designers and other creatives to showcase their work, attracting footfall to this area of the city centre. The plans of Leeds City Council’s plans to transform City Square subsequently into a woodland ‘glade’ in collaboration with Re-form Landscape Architecture will provide a hub for community, creativity and culture.
Furthermore, the Leeds Year of Culture 2023 will see 12 signature events and a range of experiences across the city throughout the year that are set to enrich the lives of Leeds residents for years to come, through an estimated £114 million in extra direct and indirect revenue from the visitor economy.
The British Library of the North is set to become another strong cultural offering for Leeds, following a £25m cash injection from the government to support the project as part of the West Yorkshire devolution deal. Situated within the South Bank on the Temple Works site in Holbeck, it will create transform into a new and revitalised public space in a Grade I Listed building.