Leeds Crane Survey: city living driving development

Deloitte’s 17th annual study of the city showed that Leeds’ development market continued to demonstrate strong growth in 2023, with 16 new starts in the year.

Deloitte said that close to 700,000 sq ft of office space was delivered across three schemes, a sixfold increase on 2022. Supply is becoming constrained.

The residential market remains strong, with 15 projects under construction. And again, purpose-built student accommodation saw a record year, with 3,704 beds under construction.

Deloitte reported that connectivity remains an issue a focus for Leeds, notably the improvement project at City Square.

Compared to the other cities surveyed by Deloitte, Leeds held up well, with its 16 new starts comparing to 21 in Manchester and 20 in Birmingham.

Leader of Leeds City Council Cllr James Lewis said: “Our city centre continues to grow at an exciting pace, with development showing demand across a range of sectors. This demonstrates progress towards our continued ambition of creating a greener and better-connected city centre community, nurturing an environment which brings our neighbourhoods closer to jobs and opportunities.

“We are delighted that the private sector and development partners share in our important commitment to continuing our city’s inclusive growth, and we look forward to working together to identify further opportunities to accelerate this work over the next decade.”

Now in its 17th year, the Leeds Crane Survey monitors construction activity across a range of sectors including offices, residential, hotels, retail, and education, and is seen as a barometer of developer sentiment and future supply.

Offices  

In 2023, 698,996 sq ft of office floorspace was delivered across three schemes in Leeds city centre, trouncing 2022’as figure of 97,702 sq ft delivered.

The city’s South Bank area experienced a particularly strong year for office development, with 385,702 sq ft of floorspace delivered in 2023.

However, despite the record-breaking increase in office completions, there was a slowdown in new starts, with one office scheme starting construction in 2023. The total amount of office space under construction also fell to 287,013 sq ft from 858,448 sq ft in 2022.

Demand for grade A space continues to grow however, with the survey highlighting an increase in quality refurbishments.

Vastint started a 75,000 sq ft office development at Aire Park in 2023. Credit: Vastint

Ellen Sanderson-Clark, assistant director at Deloitte, said: “2023 was a strong year for the delivery of office space across Leeds, looking forward new projects will be required to fill the forward pipeline.

“Areas like the South Bank and Wellington Place are likely to lead the way, but we can also look forward to the Leeds Innovation Arc beginning to deliver new and exciting workspace at the heart of the City Centre.

“As with many other cities, office refurbishments are on the rise. This is likely driven by changes to office energy efficiency ratings, with offices now required to be at EPC B rating or higher by 2030. As business commitment to hybrid working patterns looks set to stay, a move to higher-quality, collaborative office spaces is also likely driving refurbishment activity.”

Residential  

Leeds’ residential market continued its upward trend, with 15 schemes under construction compared to 11 in 2022. In all, 5,274 homes have been delivered since 2018. This level of development is set to continue, with 2,123 new homes on track to be delivered in 2024.

Central Leeds experienced a particularly strong year in 2023, with all three new residential developments commencing in the heart of the city. Outside of the centre, the South Bank saw the highest number of units under construction in 2023, with 1,261 homes currently on-site. The north-east fringe area also currently has 898 residential units under construction.

Nolan Tucker, director at Deloitte, said: “It has been another strong year for the residential market in Leeds, and this is set to continue into 2024 with a healthy development pipeline. In 2023 we’ve seen a particular focus on residential development right in the heart of Leeds, showing the continued attractiveness of city centre living.

“Across Leeds we’re seeing how the residential market is maturing given the recent high levels of development. There’s now a renewed focus on diversifying city living, to create vibrant and inclusive neighbourhoods to reflect Leeds’ growing population.

“We can also look forward with interest to the outcome of the newly formed partnership with Homes England. The city has been awarded £2.2m to invest into growing new neighbourhoods across the city, this should help to shape further new communities over the next few years.”

Education

For the second consecutive year, Leeds experienced a record-breaking year for student development, with 3,704 beds under construction across 10 schemes, an increase of 12% from the previous record of 3,294 beds in 2022. In all, 5,271 student beds have been delivered in the crane survey area since 2018.

The city has also seen two new educational use schemes commencing construction, with the Leeds Mathematics School and the Leeds City College Mabgate campus further improving education facilities within the city.

The Mabgate project will create 70,000 sq ft of educational space. Credit: via Recognition PR

The announcement of the Innovation Arc in the west of the city centre will also support Leeds as a growing hub for STEM student numbers.

Tucker continued: “Leeds continues to be a major city for education, research, and innovation, with strong educational institutions and facilities. With the city’s universities facing ever increasing demand, it’s no surprise that the pace of student accommodation development has continued to pick up over the last five years, leading to yet another record-breaking year.

“The construction of new educational facilities will also help to further the city’s proposition. Leeds City Region now houses more STEM students than anywhere outside of London so notable developments and investment will continue to help attracting the best talent to Leeds and complement sectors including Fintech, life sciences, health, and digital sectors. By further creating world-class facilities, Leeds will be able to hold its position as a hub for education and research outside of the capital.”

Outlook

Sanderson-Clark said: “It has been yet another strong year for Leeds as it further secures its position as one of the fastest-growing cities in the UK. With 16 new projects commencing in 2023, the development pipeline for 2024 is set to generate further growth for the city across the residential, retail and office development markets.

“Last year we saw substantial attention given to improving Leeds’ city centre. Notable plans for retail development such as the submission to redevelop the shopping centre as well as the 33,000 sq ft former House of Fraser site makes for exciting future rejuvenation of retail focal points in Leeds.

“Significant progress has also been made in improving the connectivity of the city, led by projects like ‘Connecting Leeds’ and ‘Sustainable Travel Gateway’ to further drive development activity in, and to, the centre.”

Looking forward, said Sanderson-Clark, the investment zone status given to West Yorkshire by government in November 2023 is likely to influence development:

“This year’s Leeds Crane Survey suggests that market conditions are likely to create a new development cycle in 2024. We saw how Leeds2023 helped the city gain international attention for its dynamic cultural offering, and we now expect this to accelerate on the back of the recently announced Investment Zone and focus on the City’s innovation offer.

“The next few years are set to be exciting for Leeds as it continues to become both more connected and investable.”