_Channel 4's Leeds office move endorses city as nascent media hub
The euphoria which greeted Channel 4’s decision to move its national headquarters to Leeds was so great that it will only be equalled if (I would love to say when) Leeds United are promoted to the Premier League this season.
And rightly so. Channel 4’s decision is a massive vindication of the progress, economically, socially and culturally, that the city has made during the past decade.
Since the news broke that Channel 4 will be taking over 25,000 sq ft of quality office space at Majestic, the former nightclub which is being imaginatively restored by developers Rushbond, we have fielded a number of inquiries from hi-tech, production and media companies wanting to follow suit.
I have every confidence that some of these inquiries will result in instructions and deals. This is tremendous news as it broadens the base of the city’s already buoyant economy.
Until the end of the last century, Leeds’ economy was heavy reliant on the professional services – lawyers, accountants, financial advisers, property consultants and developers.
The digital revolution of the last 20 years has changed all that and several new and flourishing office developments, such as Corcordia Works in the South Bank, have been powered by hi-tech companies or the award-winning Bruntwood building, Platform.
Now Channel 4’s endorsement of all that Leeds has to offer means that a new wave of television and media-focused companies will be making their home in our city. Despite the challenging and uncertain political outlook, these are exciting and transformational times for Leeds.
Of course, while the decision by Channel 4 to set up an HQ in Leeds was the major headline of 2018, it wasn’t the only piece of good news. We mustn’t overlook some other strong headlines, too, especially in the property market.
The marked growth of foreign investment in the city highlighted the enhanced and growing profile of the city on both the domestic and international stage. From a market perspective, the city is responding to the changing nature of the workplace. Innovative and inspiring spaces are being created to accommodate both the long-term and flexible needs of occupiers.
I am confident that Leeds will continue to outperform other major northern towns and cities this year, with office rents reaching a record high of 32 per sq ft, as it continues to build on last year’s stunning statistics. The signs are good. For example, leading Yorkshire law firm Walker Morris is moving into 33 Wellington Street, making it the largest single site law firm outside of London.
At the same time, HMRC’s creation of a hub in Leeds saw the government department take 60,961 sq ft over three floors at 3 Wellington Place. This follows the pre-let of 378,000 sq ft at 7 and 8 Wellington Place in 2017. This is a ringing endorsement of Leeds by central government.
Crucially, investment volumes reached £362m, close to double the 10-year average and the highest office investment total since 2005. Supporting the rise was strong interest from overseas buyers. During 2018, international money underpinned four of the seven deals completed over £25m.
The purchase of 6 Queen Street for £37.2m by Mayfair Capital Investment Management on behalf of Swiss Life Asset Managers was the headline deal, reflecting a net initial yield of 5.40%. The 70,940 sq ft building is part let to Burberry until 2027. Another massive deal was APAM Asset Management acquisition, on behalf of Britannia Investments, of 1 City Square for £32.275m from Aviva.
But it is not just these big deals which are stimulating the city’s growth and prosperity. Leeds is also leading the way in the new space race, which is embracing a whole new way of working.
The concept of an office space is forever evolving. What formerly passed for adequate - a desk, a chair and a computer – simply doesn’t cut it anymore. As the way we work changes, the workspace’s identity has to change in tandem to keep up with the forever-growing digital professional landscape
Employees increasingly demand higher-quality services and amenities and value more community space. New generations entering the workforce have different expectations of the office environment, particularly the under 35s, challenging the way in which we all work.
Ironically with the apparent freedom for many to work wherever one wants, afforded by mobile and tech, we are seeing an increasing need for high-quality workspace where people can work together, to collaborate and innovate.
Co-working is a concept that has really taken hold of our current way of working and turned it on its head. Instead of a business having its own office space, co-working advocates for a shared working environment, where many businesses of different industry and size can work communally. Leeds has both the will and the capacity to meet this demand.
So, for a number of different but inter-related reasons, the future is extremely bright for the flourishing city of Leeds. Now all we need is for Leeds United to be promoted!
Eamon Fox is a Partner, Head of Offices & Development in Yorkshire. Eamon was voted Deal Maker of the Year in 2016 and 2019 at the CoStar Awards, and has a comprehensive and successful history of providing Marketing Strategy, Development, Letting and Acquisition advice to Landlord, Investor and Occupier clients throughout the Yorkshire & Humberside region