The Subplot

The Subplot | Leeds lessons, Liverpool gets it right, global capital

Welcome to The Subplot, your regular slice of commentary on the North West business and property market from Place North West’s analysis editor, David Thame.


  • Back to basics: how old fashioned values makes Leeds a rival. Part two of Subplot’s Manchester benchmarking.
  • Elevator pitch: your weekly rundown of who and what is going up, and who is heading the other way


Back to basics

Leeds is a bit stuffy, a bit serious, suit-and-tie territory, no? But the old fashioned value of a well-defined city business district gives the Yorkshire giant a real advantage, one Manchester could use.

The good news is that you can put headlines and hype to one side, Leeds is no kind of existential threat to Manchester’s Capital of the North status. The Leeds office market is small and fairly conservative, and in some ways a throwback to regional office markets of the 1990s.

The bad news is that what Leeds has to offer – brick detailing, a tight city core, the continued existence of stiff button-up collars – appeals strongly to high-end professional, financial and public sector occupiers. This is a sector collective that Manchester, with its increasingly different vibe, cannot afford to ignore.

Small but perfectly formed

Some facts: Leeds office market take-up is around 1.1m sq ft, split between 620,000 sq ft in the city centre and 480,000 sq ft in the various out-of-centre options all of which play a more prominent role than they do in Manchester. Q1 2022 was a disappointment, as it was in Manchester, with city centre take-up down 16% on Q4 2021 or, if you prefer, down 27% on Q1 2021.

Retro is king

The city’s culture is more or less the exact opposite of Bristol (Subplot, 5 May): imagine Bristol office workers wearing T-shirts and Stan Smith’s to work, while in Leeds the most radical choice is to risk chinos. This is because tech and media set the pace in Bristol, while Leeds is driven by professionals of various stripes (about 40% of take-up, according to Savills) aided by the public sector (where volumes shot up by 68% in 2021). Combined, that’s about 60% of the market and growing. Savills flag 7,800 new professional jobs coming to the city in the next 10 years. Just 6% of floorspace went tech in 2021 despite the chatter about the Channel 4 relocation.

London calling

To get a perspective untainted by Yorkshire pride or Lancastrian indifference, Subplot turned to Neil Sinclair, chief executive at Palace Capital, a specialist in regional investment working from a good address in London’s West End. Sinclair’s team has advanced plans to refurbish and extend Bank House on King Street in Leeds: it could end up as a 100,000 sq ft scheme, probably undertaken with a JV partner. Sinclair says it is Leeds’ super-tight business district that gives him confidence.

Tight spot

“It’s like Birmingham, where it is Colmore Row or bust. In Leeds it is about being two minutes from the station. You can perhaps walk as far as seven or eight minutes but that’s it. It’s a tight core and it means the city punches above its weight,” says Sinclair. The city needs infrastructure investment, he says. Trams, Northern Powerhouse Rail, or both, would make a world of difference. But what Leeds does it does well, is Sinclair’s conclusion.

Address matters

You hear a similar story about the importance of location from Landsec, newly arrived in Manchester, but a long-term presence in Leeds. The firm owns two big shopping centres and 120,000 sq ft of offices. Leasing director Harry Foster says the location – “unbeatable” in his opinion – does a lot of the heavy lifting. Both Sinclair and Foster are echoing a sentiment Subplot heard last week in Bristol: Manchester has become an unfocused office market. The claim is that a strong identifiable core or cores helps occupiers feel comfortable, something that Manchester has to some extent lost.

Investor eyes are smiling

Interestingly, Sinclair agrees with many would-be investors that Leeds feels like it has a strong clear growth path: get in today and you can be assured of good returns (yields are 5.25%, some way out compared to Manchester). The development pipeline is 340,000 sq ft and the vacancy rate is just 2.9%, all of which ought to help rents nudge up from £34-35/sq ft. Rents have grown by about 5% a year. This will attract investors who may find this a lot less stressful than an entry into hot and expensive Manchester.

The conclusion is that occupier tastes differ. A strong mixed economy needs a little of everything and Leeds could outflank Manchester in some high-value niches if Manchester’s developers insist on producing too much of the same kind of stuff in the same kind of neighbourhoods.


Going up, or going down? This week’s movers

Ping! The doors open for some hopeful news from Liverpool. Ping ping! Faceless international capital wants to go up, stopping at all floors.

Welsh Streets

The unhappy mood of nostalgia and negativity around Liverpool planning (Subplot, 5 May) maybe took a turn for the better this week.

Tuesday saw Plus Dane, the housing association, complete its redevelopment of the Welsh Streets, Toxteth. The £17m project, a partnership with Liverpool City Council and Homes England, took 127 Victorian terrace houses and turned them into 99 affordable contemporary homes. In many ways this is remarkable: the council wanted these terraces demolished and was forced to re-think.

According to Planit-IE managing director Pete Swift – one of those who backed the original demolition, but now wholeheartedly recants – the way the Welsh Streets plan is interpreted will set the tone for the future. Will it be seen as a nostalgic recreation of old Liverpool, or a brave new approach? If the latter, it could light a path for the vastly larger residential regeneration around Goodison Park.

“I was absolutely wrong about the Welsh Streets, what’s been done there is incredible, and a great example of ordinary old becoming good ordinary new, an exemplar of mid-density housing for everyone, not gentrification, and Liverpool could be a model for that,” says Swift.

Global capital

If you want to put your finger on the pulse of global capital, go to Runcorn.

Mileway, Blackstone’s hugely successful urban logistics platform, let a 43,000 sq ft unit at Whitehouse Vale to bulk liquids group Lloyd Fraser. The deal follows a refurbishment by Mileway of a unit acquired in a 2.2m sq ft portfolio buy from InfraRed.

The deal comes as Blackstone, which has money coming out of its ears, completes a €21bn recapitalisation of Mileway, announcing the platform would be a long-term hold (Blackstone usually trades). Meantime, Prologis, a global rival also with money pouring forth, floated and then withdrew its own $23bn offer for Mileway. Prologis has since decided instead to splurge $24bn on a US rival, Duke Realty.

The Prologis pull-out doesn’t say anything bad (merely that squeezing yields out of sheds is getting hard). Rather, it shows a raging cataract of international capital looking for somewhere, anywhere, to go. For now, Runcorn’s refurbished sheds are the lucky winners.

If you’re quick you still have time to get to Place North West’s industrial and logistics event this morning where you can ask Andrew Jones, Mileway’s regional manager North West, what fortunate locations come next.

Get in touch with David Thame: | 01544 262127

The Subplot is brought to you in association with Oppidan Life.

Your Comments

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The Leeds and Manchester comparison article makes no sense at all. Putting forward that a city where offices can only be built and sustained within a 7 or 8 minute walk from its one the station is in a better position than a city which has multiple office clusters mixed through out its core is a rather odd argument to make.

Leeds has the area around its station.

Manchester has Spinningfields, Spring Gardens, New Bailey, St Johns, First Street, Circle Square, St Peters Square, NOMA. Between all of these districts that’s pretty much the entire city core covered in all directions. That’s before you consider what is likely to be built within Mayfield, Piccadilly due to HS2 and ID Manchester.

By G Jackson

I struggle to see the point in these articles, last week comparing Bristol and this week Leeds to Manchester. Its like comparing Manchester to London. Totally different cities and all doing very well which is good.

By Bob

Re the Welsh Streets, let`s not forget it was Eric Pickles who saved them from demolition which was due under John Prescott, no doubt supported by Liverpool Labour.
You only have to look at the appallingly unsuitable housing along Park Lane that wedges right into the city centre to realise how major a mistake was made, so well done the Welsh Streets and those who have saved them and incorporated decent new build into the scheme.

By Anonymous

@anonymous is right that the housing format around Gilbert Street is inappropriate for a dense inner city neighbourhood, but find a minute to google ‘Kent Street Liverpool’ and you’ll understand the political imperative in the mid-eighties for the sort of decent houses people enjoyed in other neighbourhoods.

By Sceptical

The difference between the original plans for Welsh Streets and the end result is purely cosmetic. It should not be forgotten that the regeneration of the Welsh streets was only possible by virtue of the original housing market renewal scheme, which acquired properties under CPO, on the basis of addressing housing market collapse and changing the mix of properties to better sustain the overall housing market. These are effectively new-build properties hidden behind old facades.

As such it would be nigh-on impossible to repeat the trick and make a case to force people out of their homes and sell / rent them on the open market, principally because the problem of a weak housing market and widespread dereliction simply doesn’t exist anymore. Even if those conditions did return you could only secure a CPO on the basis of a new-build scheme – otherwise what would be the point? And that’s what we shouldn’t lose sight of: the Welsh Streets regeneration is ultimately a new build scheme and the difference to a more conventional regeneration scheme is cosmetic and a matter of aesthetic preference. The end result is no more sustainable, nor involves any less upheaval for the community.

By Pickles’ pickle.

Sounds like Mayfield will be the right option then if the answer is to build a business district as close as possible to a railway station. As has been pointed out Manchester has and is developing a lot of business districts. That’s a good thing. The challenge is to differentiate them but at the end of the day that’s just marketing.

By Anonymous

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