The Leeds sky line is punctuated by cranes as another major shopping destination comes to fruition after years of uncertainty. This could be a metaphor for the Yorkshire and North East markets as a whole. A new found confidence is sweeping across most sectors and there are some really exciting opportunities if you know where to look. RETAIL DEVELOPMENT HAPPENING ACROSS YORKSHIRE The development of Victoria Gate will see John Lewis debut in Leeds in 2016 as Hammerson add a 452,000 sq ft retail destination to a city that has already undergone a shopping renaissance since Land Securities’ Trinity opened in 2013. Further development and occupier moves will follow and it’s an exciting time to be involved in retail in the city. Westfield Bradford opened at long last in November last year circa 90% occupied. Going forward, this will cause a quantum shift in the city’s gravitational draw, allowing it to begin to compete within the region. Occupiers are demonstrating their confidence across Yorkshire and the North East. Primark remain active with an extension of their Grimsby store currently on the cards. Some of the main supermarkets are quietly looking at new stores, the convenience market remains competitive and the discount brands such as new entrant Netto are opening across the region. STRONG DEMAND BUT LITTLE STOCK IN THE INDUSTRIAL SECTOR The industrial and logistics market saw some major deals last year, but it is the severe lack of Grade A stock across the region in all size ranges that is the key issue. With strong occupier demand and little supply, it is perhaps surprising that speculative development remains so limited. In Leeds for example, there have only been three units built, but many developers are saying smaller speculative development still does not stack up without grant assistance. Although developers often remain risk averse, there is little doubt that real opportunities exist for the brave and the power has firmly shifted from occupier to landlord/developer. Against this background, it is unsurprising that values are rising for the first time in 10 years and this trend seems set to continue. Perhaps a sustained upward trend will see speculative development increase as developers look to capitalise on the demand/supply imbalance. OFFICE DEVELOPMENT OPPORTUNITIES NEEDED IN CENTRAL LEEDS Grade A office availability in central Leeds is below 8%, so it is little surprise that development is happening - an additional 534,000 sq ft of new build and 165,000 sq ft of refurbished space is currently on site and set to complete during 2016. Occupiers take note however - 50% of that new build space is already pre-committed and the remainder is under discussion. We are aware of over 800,000 sq ft of named occupier requirements currently within the Leeds market seeking Grade A accommodation for occupation within the next 24 to 30 months. So with strong demand fuelled by a host of lease events equating to 1,795,000 sq ft within the next five years, as well as modest supply, headline rents look set to rise to £30 per sq ft by the end of 2016. All in all, with incentives reducing, rents rising, pre commitments agreed and substantial occupier activity in the marketplace, the outlook for Leeds is very positive. However, we believe there is real danger of a significant under supply of available accommodation post 2016, so development opportunities are excellent. A FUTURE BOOM IN MIXED USE DEVELOPMENT? The general economic upturn is seeing healthy activity in most other property sectors across the region. The residential market is buoyant, not just with traditional new homes, but also in the newly emerging PRS sector. Watch this space in terms of the first big schemes in the region. However, the biggest property news in the mixed use market last year was the sale of the Tetley site in Leeds by Carlsberg to Vastint, part of the Inter IKEA group. Having sold the site, we are now working with Vastint on the biggest development site in the city that will see the creation of circa3 million sq ft of new space. It’s an exciting time to be working in Leeds and those cranes look set to remain busy for some time to come!