International real estate advisor Savills says that the prime office rental gap between London and Leeds is the widest on record.
The latest Spotlight – Leeds Offices report by Savills shows that in Leeds city centre, Grade A rents are currently £27 per square foot (£291 per square metre), in comparison to £95 per square foot (£1,023 per square metre) in London.
The company say that this will play a big part in the attraction for ‘north-shoring’ firms that are looking for cheaper property costs and reduced staff costs away from the capital.
Savills’ commercial research team associate director, Clare Bailey, said that Leeds is providing a very attractive alternative as rents in London continue to rise at a rapid rate.
Ms Bailey added that nearly 10,000 newly created office jobs are to be generated in the city across the next five year period, due partly to some major organisations relocating office functions from London to the north.
She also said that although the firm expects Leeds prime rents to increase to £30 per square foot (323 per square metre) in the next three years, the city will still be able to provide a big discount in rental costs when compared to those in London.
The report by Savills shows a strong 2016 first quarter take up in Leeds of 121,178 square feet (11,257 square metres), which is up by over 50% on the same period in the previous year.
This increase is thanks to a number of major deals, such as the Hestview Ltd (Sky Bet) lease of 39,605 square feet office space.
The strong take up of space has provided the catalyst for further developments and Savills say that there is currently almost 700,000 square feet of office space being constructed in Leeds city centre, 47% of which has already been pre-let for this year.