Data suggests strong economic recovery in Leeds for 2022

According to the latest data from Avison Young, the economic outlook for Leeds looks promising for 2022, with a continuing recovery from the pandemic.

The city’s gross added value is expected to grow by 6 per cent this year, a stark increase compared to the 2.3 per cent pre-Covid average. This growth is expected to be driven by the accommodation, food, arts and entertainment sectors: areas of the economy that were most affected during the pandemic.

Employment prospects are also promising, with the city expected to create 11,700 new roles this year, over 5,200 of which are expected to be office based.

The office market saw strong levels of demand from financial, professional and business services firms in 2021, and Avison Young expects to see a continued evolution of tenant demand over the course of the year, with more requirements for fitted and serviced space in the city.

While supply of Grade A space is relatively low, there has been an increase in city centre vacancy, rising to 7.9 per cent from 5.1 per cent at the beginning of 2021. This is largely due to the trend in downsizing office space for higher quality, more sustainable places to work that prioritise the health and wellbeing of staff.

The city’s retail sector continues to attract high-quality tenants, with new store openings including JYSK, Boodles and Sky to come over the year. Zone A rates fell just 2.5 per cent during the course of 2021, and this rate decrease is likely to slow down as the year continues.

Chris Cheap, managing director UK regions at Avison Young, said: “Like many other places in the UK, it’s been a challenging year for Leeds and the decision at the end of the year to cancel the Leeds leg of HS2 and the subsequent downgrading of the Northern Powerhouse line was a blow.

“However, many consider east-west connectivity to be more important to the city and it will be interesting to see how those conversations and plans evolve throughout the year.

“There is a lot to be excited about for Leeds in 2022 though, including the migration of Channel 4 into the city, which has created a lot of opportunities, not least with the creation of hundreds of new jobs.

He concluded: “It is these types of high-profile occupiers that will help establish Leeds as a hub of talent that can contend with the likes of Manchester and London and drive business demand across multiple sectors.”