Finding strategies to minimise business costs is never easy, especially as commodities soar. This is certainly true now that the full effects of the Government’s Spending Review are beginning to bite and with inflation almost double its 2% target. As costs move ever-upwards, many firms are choosing to relocate to parts of the country that offer better value for money and more stable long-term operating costs. One area proving particularly popular with companies working across a number of sectors is Leeds.
Situated halfway between London and Edinburgh, Leeds is the UK’s largest centre for financial and professional business services outside the Capital and is one of the country’s leading commercial locations. With a high standard of living, skilled workforce drawn from six universities within the wider area, and a convenient location off the M1, Leeds provides many of the attractions of the South East at a fraction of the cost. Indeed, a recent report published by commercial property agents, DTZ, has shown the City to be the most cost effective of all the UK’s major logistics centres and its office market has been judged the best value in Europe.
The ‘European Occupancy Costs’ report, which compares wages, taxes, rent, and transport costs within the logistics sector across Europe, identifies costs to be up to 4.5% lower in Leeds than in other UK regional centres and 28% lower than the South East.
Unsurprisingly, London Heathrow tops the table for the continent’s highest occupancy costs, at €215 per sq m per annum – almost two and a half times the European average of €86.3 per sq m. Total operating costs for logistics companies in Leeds stand at around €91.53 per sq m.
According to the report, both wages and rents, the two biggest costs for occupiers in the logistics industry, are lower in Leeds than other UK centres featured in the report: London Heathrow, South East England, Manchester, Glasgow and Birmingham.
Average salaries for full time warehouse operatives in Leeds stand at €14,600, which is over €1,000 less than nearby Manchester, where average labour costs at €15,800 are almost level with those in the South East of England (€15,900). Rents in Leeds average £5 per square metre per annum, again lower than all other major UK logistics centres.
David Baggaley, Marketing Manager at investment promotion agency, Locate in Leeds, said: “The DTZ Report clearly highlights why Leeds is an excellent choice for companies looking to relocate to an area where they can continue to enjoy all the benefits that go with a South East location, but without the high operating costs. We have a strong international reputation and will continue to build on that.”
Looking ahead, the report forecasts lower growth in occupancy costs for Leeds than for any of the other ‘big six’ logistics centres in the UK. Total occupancy costs, including rents and taxes, are forecast to grow by between 4.1% and 7%, whilst occupiers located in other UK centres featured in the report will face increases in costs of up to 10%.
As a further enticement, Leeds is one of the cities best placed to create new jobs this year, according to a new report published by the Centre for Cities, which names Leeds among five “cities to watch” in 2011. These are cities well placed to survive the impact of Government spending cuts and enjoy a private-sector led recovery.
And if two accolades weren’t enough for the city, for the third year running, the Leeds office market has been identified as number one in Europe for value for money in the Cushman and Wakefield ‘European Cities Monitor’. The report is based on interviews with senior executives from 500 of Europe’s biggest companies and looks at the range of factors considered by companies when deciding where to locate their business operations.
And despite the low cost of commercial property, there are a number of new high-quality developments currently available both within the City centre and slightly further afield.
Heading the list of new office developments are The Mint and 1 Whitehall. Both grade A schemes, they have been built to what the developers have stated are the highest environmental standards, and can accommodate both large corporate or regional headquarters requirements. Also of note is former department store, Broad Gate, which is conveniently situated in the centre of Leeds and can boast panoramic views of the city centre.
The trend towards high specification refurbished space has also seen the transformation of 10 South Parade. Located in the city's central business district, the building has been remodelled with a combination of style and heritage that will doubtless have many vying for the deeds.
Alternatively, businesses that choose an out of town location can still enjoy the benefits of Leeds as a major business centre, although at a significantly lower cost. Major office parks such as Thorpe Park Leeds, Leeds Valley Park and Capitol Park offer a combination of direct motorway access, high specification office accommodation and on site leisure facilities, that make them an ideal alternative to the city centre.
As one of Europe’s biggest business parks, Thorpe Park Leeds offers larger units and development plots that have already attracted major occupiers such as IBM, National Grid, GE Capitol and Northern Foods. It also has smaller office suites through providers and serviced accommodation.
Baggaley commented: “These new developments are yet another sign of confidence in Leeds as one of the UK’s leading locations for business and investment. The City is benefiting from a number of exciting projects that will further support businesses choosing to relocate here. Airport West, for example, has opened up a new north-western front for the city’s business parks on the doorstep of Leeds Bradford International Airport. This is currently the UK’s fastest growing international airport and £70 million is currently being invested in developing and expanding its terminal facilities.”
For further information about business in Leeds, visit our Locate in Leeds pages.
