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Building Blocks of the Future Leeds Crane Survey February 2019

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Building Blocks of the Future Leeds Crane Survey February 2019 Building blocks of the future Leeds Crane Survey February 2019 Contents Contents 01 The Report 02 Key Findings 03 Development Snapshot 04 1. Office 05 2. Student Accommodation 07 3. Health and Education 09 4. Residential 10 5. Hotels, Leisure and Public Realm 12 6. Outlook 14 Development Map 17 Development Table 18 Endnotes 24 Contacts 25 Building blocks of the future | Leeds Crane Survey 2019 The Report What? A report that measures the volume of development taking place across central Leeds and its impact. Property types include office, retail leisure, residential, student accommodation, education and hotels. Where? Leeds, covering the city core and city centre fringes. Who? Developers building new schemes or undertaking significant refurbishment of the following: Size minimum = office – 10,000 sq ft, retail – 10,000 sq ft, residential – 25 units, education, leisure and hotel schemes – significant schemes for inclusion. When? The report covers the period from January 2018 to December 2018. How? Our Real Estate team in Leeds has monitored construction activity across the city centre. Our field research is then verified with direct industry links and in-house property experts. 02 Building blocks of the future | Leeds Crane Survey 2019 Key Findings 21 new starts – Second highest highest since 2007 office space under construction in history of Leeds Crane Survey – 804,257 sq ft Most Health and 2,232 residential units Education floorspace currently under under construction construction across since the start of the the city centre Leeds Crane Survey (second highest in – 743,000 sq ft history of Leeds Crane Survey). Most student housing new starts (4) and student bedspaces under construction in history of Leeds Crane Survey – 2,768 compared to annual average of 704 (since 2007). 03 Building blocks of the future | Leeds Crane Survey 2019 Development Snapshot Which sectors are the most active? (Number of schemes under construction) 6 5 Office PBSA 6 Education 7 Residential 1 Hotels 1 Retail and leisure 1 Healthcare 1 Infrastructure uber of ne strts New completions Office space in 2018 under 15 construction 21 201 804,257 sq ft 1 201 31 200 Office space Health and 12 Averae completed Education 599,897 sq ft floorspace under construction 743,000 sq ft 04 Building blocks of the future | Leeds Crane Survey 2019 1. Office Leeds has experienced consistent levels of delivery in the office sector in recent years, and 2018 was no exception with the second largest quantum of office floorspace under construction in the history of the Leeds Crane Survey. Coupled with seven new starts, well above the annual average of four, this demonstrates Leeds’ ability to continue to attract new inward investment in the office market. Much of this floorspace delivery comprises 7&8 Wellington Place by MEPC, the location of the new HMRC hub. MEPC also commenced construction of 4 Wellington Place in 2018. The continued delivery of the Wellington Place masterplan demonstrates the power an anchor tenant can have in facilitating wider development. Additionally, 9 out of 15 completions seen in this year’s survey are in the office sector, providing approximately 560,000 sq ft of office floorspace to the market, over twice the annual average of 265,751 sq ft. This has included Merrion House, now occupied by Leeds City Council. The city centre continues the trend identified in previous surveys and provides a range of office accommodation to meet the needs of a wide range of occupiers. All of the office developments which 804,257 sq ft have completed, and all but two of the offices under construction, are refurbishments. of office floorspace under construction 05 Building blocks of the future | Leeds Crane Survey 2019 Office completions in 2018 Whilst outside the boundaries of the Leeds Crane Survey, it is also worth reflecting on the proposals 2018 Annual average announced for other developing employment hubs, namely at Thorpe Park and the White Rose Office Park. Thorpe Park saw a new 350,000 sq ft retail and leisure destination open in October, with occupying retailers including M&S Foodhall, H&M, Next, TK Maxx, Outfit and Boots. The office park also continues to grow with proposals announced for 900,000 sq ft of office accommodation. Proposals were announced in the summer for the expansion of the White Rose Office Park and the creation of new office space alongside residential accommodation and other ancillary uses. Both of these locations are building on proposals announced for the creation of new railway stations 560,000 sq ft 265,751 sq ft and will be well positioned to create new sustainable satellite clusters to help support the continued economic growth in the city centre. These locations Each of the developments provide a different allow the delivery of office products that cannot be office product, with a range of floorplates, grades met in the city centre, and by improving connectivity and locations across the city centre. For example, to these locations from the city centre, it will facilitate Wellington Place provides a Grade A, large floorplate business linkages, benefiting Leeds as a whole. building, whilst the refurbishment of 34 Boar Lane is a design-led office targeted at local businesses. The ability of Leeds city centre to attract a range of occupier types is demonstrated by Channel 4’s commitment to locate its Regional Hub in Leeds, which has been followed by announcements from supporting companies towards the end of 2018. The implications of this commitment are explored further in the Outlook section of this report. 06 Building blocks of the future | Leeds Crane Survey 2019 2. Student Accommodation In 2018 we saw record activity in the student accommodation sector with four new starts, the highest number in this sector in the history of the Leeds Crane Survey. At the end of 2018 there were 2,768 student The scale and height of these developments is also accommodation bedspaces under construction, almost notable, with two schemes providing over 750 units four times the annual average (since 2007) of 704. in buildings of up to 27 storeys (Unite’s White Rose A further 276 bedspaces were completed and View development) and 36 storeys (Olympian’s Hume delivered in 2018. House). These will be two of the tallest buildings in the city centre and demonstrate the continued confidence Number of bedspaces under construction in investing in the student housing market in Leeds. eeloent heights 36 floors Hue use 27 floors White ose iew 2,768 704 (2018) (Annual average) 07 Building blocks of the future | Leeds Crane Survey 2019 The schemes reflect the national trend in the student We expect the new student accommodation and accommodation sector towards the delivery of high build-to-rent developments to support Leeds’ brain quality accommodation with a range of ancillary features gain which will be reflected in Leeds’ Student Attraction and offerings. This is in contrast to a traditional House and Graduate Retention figures over the coming of Multiple Occupancy (HMO) housing offer which has years. As well as the growth of the rented sector, as historically comprised the main student accommodation reflected in the take up rates for purpose built student type. This replicates a trend seen in other cities and the accommodation (PBSA) and build-to-rent units. move towards a high end product, particularly targeted at overseas and postgraduate students, that is able to eeds tudent housing deeloents generate significant returns for developers. No. beds 00 All of the student accommodation schemes under construction are clustered around the Arena Quarter 000 in the north of the city centre. This, in conjunction with the existing student accommodation in this area, will 200 result in approximately 4,000 student bedspaces upon completion. 2000 With a rise in the number of students residing in the 100 northern part of the city centre, it is likely that a number of complementary services and facilities will also be 1000 required to accommodate the needs of residents. It may also be the case that build-to-rent developments 00 come forward in the north of the city, to attract 0 graduates to remain living in the city centre once they 200 200 2009 2010 2011 2012 201 201 201 201 201 201 have completed their studies. Ceed nder nsrun Last year’s Leeds Crane Survey considered the relationship between student accommodation and the build-to-rent accommodation being delivered in Leeds, i.e. to allow graduating students to retain the same standard of living. Leeds City Council’s Best Council Plan confirms that Leeds experiences a ‘brain gain’ with more undergraduates and graduates moving into the city than leaving.1 08 Building blocks of the future | Leeds Crane Survey 2019 3. Health and Education In 2018 we saw continued progress in the education and healthcare sectors, with two new education scheme starts, and one in the healthcare sector. There is also the largest amount of education and healthcare sector floorspace under construction in the history of the Leeds Crane Survey, with 743,000 sq ft. Health and Education floorspace under Although the developments are spread across the construction city centre, there remains a clustering of similar use real estate to the north and north east of the city centre. These include developments by the universities, Leeds Teaching Hospitals and the Leeds Arts University. A higher education hub is now developing in this area of the city centre alongside the new PBSA. Public sector support in boosting development in this sector remains key, with West Yorkshire Combined Authority (WYCA) continuing to invest in education opportunities including the Leeds City College’s Quarry Hill Campus and the Leeds Innovation District Partnership investing in the education cluster in the 743,000 sq ft north of the city centre.
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