What will 2024 bring for Yorkshire property?

Over the course of 2023, Place Yorkshire has covered a vast range of stories: office and industrial lettings, mergers, appointments, devolution deals, starts for huge construction projects. We asked professionals from all parts of the market for their 2024 predictions.

Eamon Fox, partner, Knight Frank Leeds

“With 2023 Leeds office take-up set to 20% higher than the 10-year average, rents should reach £40 per sq ft by the end of 2024, a year in which I believe the trend of working from home will erode significantly. Amazon, Meta and Zoom have all asked employees to be in the office more. In Leeds, a couple of strong trends are worth noting. The first is the role that successful schools and universities are playing in the city’s growth, while the city continues to attract significant new financial occupiers. Finally, I believe deals will get smaller by up to 30 per cent. There will be a flight to quality, with occupiers willing to pay more to secure new, shiny workplaces that promote strong mental health and employee wellbeing.”

Andrew McLean, director and Leeds studio lead, tp bennett

“The letting of 11 & 12 Wellington Place in Leeds’ largest office letting highlighted the ever-improving ESG criteria most companies seek in new office space. In 2024 we must push further and adjust our priorities. A greater mandate for retrofit could greatly reduce our carbon footprint in the built environment, as well as returning buildings and areas to their former glories. We all need to be bold in making this type of decision to promote growth and thereby increasing demand. This growth can only assist in driving up demand in the other cities in the regions. As designers we often hold the key in helping make this happen and 2024 may need our help more than the past year.”

Liz Cashon, innovation campus manager, York Biotech Campus

“Flexibility will remain extremely important. Hybrid working is not going anywhere, and we need to adapt to reflect what our occupiers, current and future, expect from a workplace. We know there is a demand for managed workspace with ‘easy in/out’ options for occupiers that may not require permanent office space, but still want a location that offers a community and network with great facilities. As traditional leases expire, we also appreciate many organisations will be looking to reduce office space. From a lab point of view, the demand is very much there, but we expect more requests for flexibility. Science is a fast-paced sector, and we’re getting enquiries for lab space that can adapt as quickly as their own innovation and science does.”

Jeremy Hughes, director, RBH Properties

“We believe that the commercial market in 2024 will be very different to 2023. All property sectors will need to be far more agile in approach and sensitive to rising business costs, salary inflation and, crucially, costs occurred when borrowing money. Occupiers of office space will continue to look to streamline the scale of their property portfolios, placing an emphasis on quality and access to amenities. Landlords will have to differentiate their space. In terms of the commercial sectors that we expect to grow next year, we are receiving some really encouraging and sizable enquiries from the education, training, technology and health sectors.”

Paul Mitchell, chairman, The Harris Partnership

“Biodiversity is set to be big in 2024. New legislation on biodiversity for sites will undoubtedly become an obstacle to achieving planning permission for some businesses. This will lead to delays and increased costs which may deter development. However, in preparation for this The Harris Group has recently expanded its services to include ecology and arboriculture to assist our clients moving forward with an ever more important part of the planning process.”

Michele Steel, Regeneration Brainery

“2024 will see UKREiiF in Leeds for its third year and is going to be an incredible opportunity to showcase all that Leeds has to offer to a UK-wide market, whilst adding to the £20m that UKREiiF has already injected into the Leeds economy. One of UKREiiF’s major draws is its commitment to being inclusive to all those who work in the industry, and visibly being representative of wider society. It’s also committed to bringing young people – the future of the property industry – into the event and ensuring that they have a seat at the table and a voice in the discussion. And isn’t that what we need? We’re proud to be UKREiiF’s 2024 Charity Partner because of their commitment to diversity and inclusion and can’t wait to reveal our programme in early 2024. Watch this space!”

Duncan Inglis, director – North, Homes England

“2024 will see Homes England deepen its place-based partnership working with existing and new mayoral combined authorities, building on the successful model we’ve established with Greater Manchester Combined Authority. Working in partnership means we can more effectively tackle complex long-term projects and provide greater certainty for the private sector.  We are going to see more interest in Sheffield next year where we are currently supporting regeneration in the city centre and Attercliffe, bringing forward sites that will anchor new private investment and see the creation of new mixed-use neighbourhoods.”

Graham Edward, managing director, Edward Architects

“Britain’s incredibly resilient business world needs to remain so in 2024 as I think it will remain a bumpy ride though global uncertainties and a government focused on the next General Election. So more belt tightening is required in 2024, but I don’t see a reduction in the order book. At Edward Architects we are excited to face the challenges that 2024 is going to throw at us and will spread our specialisms of residential, strategic land and accessible design into new client bases. We are ready for the next phase of continued growth.”

Michael Porter, senior valuation director, CBRE Leeds

“Investors are likely to continue to prefer the living sectors which have, to date, been more resilient to recent economic pressures, with industrial also likely to be favoured. Pricing appears to be stabilising. 2024 looks likely to be a relatively muted year for commercial investment transaction volumes, picking up in the second half of the year. It is also expected to be a year for opportunistic purchasers with lower debt requirements. With significantly higher yields now applying to office and retail stock these could be favoured by contracyclical investors, seeking greater returns and accepting higher levels of risk for doing so.”

Matthew Jennings, associate director Eddisons Bradford

“From what we’ve seen in the latter months of 2023, we’re fairly confident the industrial market will remain resilient, with continued buoyant demand across unit sizes. In particular, business confidence seems to be driving demand for 10,000-30,000 sq ft units in Bradford, especially from occupiers outgrowing current premises. Despite the challenging economic headwinds, hopefully that’s a trend we’ll see continue. However, as elsewhere, the city’s office market is likely to remain in flux next year, with freehold demand outweighing that of rental. Occupiers will inevitably still look to downsize office space as hybrid working continues to be the market norm.”

Dr Edward Ziff, chairman and chief executive, Town Centre Securities

“Leeds’ property sector is poised for transformation amid discussions on the cost-of-living crisis, inflation and rising interest rates. This shift in focus is expected to drive efforts in rebalancing and fortifying the UK economy, with a specific emphasis on enhancing major cities in the North. Leeds is experiencing significant momentum in private rental and purpose-built student accommodation. Whilst anticipating a slowdown, I am confident that these sectors will remain resilient. The working landscape in Leeds seems to have adopted a hybrid model, reshaping office demand and emphasising the importance of environmental credentials for prime offices. TCS has promptly responded by prioritising high-quality, multi-tenanted schemes and we are now exploring alternative uses, including office-to-student-accommodation conversions for key sites.”

Shakeel Adli, founder & chief executive, Zunikh

“Following on from Covid and with the continuing war in Ukraine, we expect that 2024 will see markets begin to settle. We can already see inflation beginning to ease and with this we expect that interest rates will slowly come down. Within the property market we anticipate that this will ultimately result in private sales picking up as consumers recover from higher costs of living and the cost of borrowing coming down. Markets like Sheffield and South Yorkshire should benefit and housing prices may start to increase fractionally as demand for stock grows. We also anticipate that build-to-rent schemes will continue to be popular amongst institutional investors in places like Sheffield, however yields may start to drop. Our outlook for 2024 is generally positive.”

Luke Gidney, managing director, HOP

“The shortage of available rental property in Leeds looks set to be an ongoing theme. Substantial tax increases and higher interest rates combined with some laborious legislation mean many landlords continue to sell up. As a result, we expect rents to rise further, although possibly at a slightly slower pace than in 2023, but growth of between 8% and 10% would come as no surprise. However, the reality is that many tenants are already over-stretched financially, with lots already facing a tough time with energy bills and food inflation. There has been an increase in tenants falling into rental arrears in 2023 and this is likely to remain an issue.”

Harriet Knowles, director, Counter Context

“Within the property world, we believe that there will be a continuing trend for local authorities to take ownership of, and repurpose, underperforming town and city centres. This is particularly true of purpose-built shopping centres that are really struggling – given the challenging retail market and modern shopping trends. The need for diversifying the high street – creating more residential and leisure-led focal points – has been great for several years. We see this need and trend continuing to boom in 2024. Over recent years, Counter Context has worked on multiple schemes in Barnsley, Manchester and Sheffield, which are now leading the way for other local authorities like Bradford, Huddersfield and Blackpool to follow.”

Dave Wingfield, regional director Yorkshire and the North East, Wates Construction

“2023 has undoubtedly been one of the toughest years for our industry and it’s imperative we learn from this as a collective by adopting the key principles of the Construction Playbook to create a more sustainable industry for us all. Bidding with fair margins, committing to prompt payment terms, and conducting improved financial assessments are just a few that would make a quick and significant impact.”