Leeds City Region is undergoing a sustained period of jobs and population growth. Office-based employment has risen by 5.6 per cent over the last five years, and is expected to increase by a further 3.4 per cent in the five years ahead*.

Strong economic growth can only be a positive thing, but it does bring with it new challenges, specifically around lack of central space for office development and affordability of rents in an increasingly constrained market. Now office developers and occupiers alike are looking south of the River Aire to find a solution, causing the traditional centre of Leeds to grow and expand in that direction.

Tech firms were the first to make the move south, with a rush of deals including Bloom, Rockstar, Markel and Coveris. These have centred around the Holbeck area, where mid-priced office space (averaging £18 per sq ft) has no doubt proved attractive compared with city-centre rents which are now at circa £28 per sq ft. Two new mixed-use developments in this area – the Holbeck Portfolio and Tower Works – are currently awaiting planning permission and could deliver an additional estimated 500,000 sq ft of affordable office space.

The opening of Leeds Station Southern Entrance in early 2016 has played a key role in making the south of the city more accessible. As a result, major firms, including Addleshaw Goddard, Jacobs Engineering, Dart Group, Asda and KPMG, have taken office space there. The accessibility from the station, enhanced amenity space and high quality office provision has made this a desirable location for numerous sectors. Plans for the second leg of HS2 involving Leeds Station could act as a catalyst for further regeneration south of the city centre in years to come.

We have also seen signs of the established South Bank area stretching eastwards led by Sky, which has 650 members of staff from its digital and technology teams based across three buildings at Leeds Dock. Numerous communications and digital/technology firms have since taken space at Leeds Dock, too.

Yet rather than focus simply on offices, development south of the river points to a more mixed-use future. Tower Works will provide will provide 120 residential units as well as circa 100,000 sq ft of office space while emerging plans for a the first phase of a major mixed-use development on part of the former Tetley Brewery site will incorporate about 1,000 homes, a 400-bedroom hotel and 915,000 sq ft of commercial space, including 160,000 sq ft of retail and leisure.

The new challenges presented by growth therefore look set to solidify a southwards expansion for Leeds city centre.

*Figures from Oxford Economics.

Further information

Savills Spotlight: The Future of Leeds City Region