Commercial occupiers commit to Leeds

Over the last decade, Leeds has attracted big names to the city, such as Sky Betting and Gaming (135,915 sq ft at 11 and 12 Wellington Place in 2019), as well as seeing the establishment of a 378,000 sq ft Government Hub (HMRC and NHS Digital) at 7 and 8 Wellington Place in 2017. Despite ongoing questions surrounding the future of the office in recent years, some key occupiers are continuing to commit their future to Leeds city centre in the post-Covid period. In 2021, DLA Piper committed to Leeds until at least 2036, signing for 83,000 sq ft at City Square House, which is set to be delivered in 2024. More recently, Lloyds Banking Group signed for 124,000 sq ft in Q1 this year at MEPC’s 11/12 Wellington Place. These examples highlight how market-leading occupiers are looking to solidify their Leeds presence in prime buildings in some of the most sought-after locations in the city.

Rebalancing housing supply

Overall housing supply in Leeds has been increasing in recent years and has broadly met housing need. 3,238 net additional dwellings were delivered in 2021-22, falling just short of the Local Plan target of 3,247. Leeds has built up a strong supply of high-quality purpose-built accommodation concentrated in the city centre, successfully meeting need from graduates.

Although there remains an ever-increasing demand for purpose-built accommodation in the city centre, housing supply is failing to align with local market demand beyond the city. A significantly higher proportion of flats concentrated in the city centre have been completed in recent years, leading to an undersupply of family housing.

In the last four years, 48% of new homes completed in Leeds have been flats, compared to the Local Plan policy target of 25%. Flats also comprise 68% of the future development pipeline.

The lack of family housing relative to demand is also reflected in the concentration of households moving to neighbouring markets in order to access larger new build family housing. 13% of movers from Leeds moved to the adjacent markets of Harrogate, Bradford, Kirklees, and Wakefield in 2022, according to data from Experian.

To meet demand across Leeds, greater volumes of family housing need to be delivered in the outer suburban markets alongside purpose-built city centre supply. Providing a diverse range of housing will be central to keeping families in Leeds for the long term.

The role of place and community

“Community and place are the most important drivers for development in the city. The best and most effective way to make buildings an integral part of people’s lives is by designing in connection and with consciousness of the wider area. Office buildings must become more than simply a space to work, and with ground floor amenity can help to enhance the surrounding environment. Food & Beverage units can activate public spaces and retail and services can contribute to their vitality. Well-designed public infrastructure connecting housing to the city also has a role to play in promoting active lifestyles and facilitating connections to the city centre.” – Charles Newman, Town Centre Securities

A case for green belt release?

Expanding public transport infrastructure around the city and connecting local markets could be combined with measures to densify Leeds. Highly productive cities tend to be denser. Densification of the existing suburbs across Leeds to build more family housing may form part of the solution, alongside providing family housing outside of Leeds in the neighbouring markets.

The development pipeline in Leeds has typically been concentrated on brownfield land in the city centre and within existing settlements. But what about the rest of Leeds? 61% of the local authority land is located within the green belt, with no evidence of green belt release in recent years, there is the potential to unlock development through green belt release to maximise the development of family housing.

Public transport beyond the city centre

Improving connectivity to employment clusters is a catalyst to unlocking long-term growth in Leeds. Currently, there is a gap in public transport provision beyond the city centre and a heavy reliance on car transport.

In order to achieve more sustainable forms of development, there needs to be a greater focus on public transport. Leeds is the largest European city with no mass public transport system, according to analysis published by Centre for Cities in 2021. Better public transport connectivity would reduce traffic congestion in the city and improve air quality, a key focus for Leeds City Council. Investment in public transport infrastructure would also allow larger volumes of people to access employment clusters.

The development pipeline in Leeds needs to be well-integrated and connected to the local economy. The planning system, therefore, needs to align the delivery of new homes with future economic growth and infrastructure. Public transport could help unlock sites with capacity to deliver large family housing, beyond the city. There is also the challenge of connecting development in the neighbouring local markets to the city.

Long-term patient capital

In recent years, there has been a sea change in the levels of investment into the city. Strong market fundamentals, a skilled and diverse talent pool alongside a Russell Group university have attracted institutional investors such as UBS, L&G and Aviva. The deployment of long-term patient capital at scale to invest in place, public realm and infrastructure would help facilitate the ongoing large-scale transformation and regeneration of the city, attracting further sources of investment.

“Major regeneration projects with placemaking at the core require stakeholders who are prepared to take a long-term strategic view, especially if there is upfront planning, remediation and infrastructure costs required to create the ‘shovel-ready’ development site to attract business and occupier requirements.” – Adam Varley, Scarborough Group

For more information, please contact Simon Lister or Matthew Jones at our Leeds Office

_{Read the articles within Spotlight: Leeds – creating and delivering innovation below.}