Leeds’s digital goldmine: AI, digital, health innovation

Leeds is actively fostering innovation, establishing its position as a national and increasingly international hub for digital, AI, and health innovation, with the city’s tech sector growing 125 per cent faster than the UK average. This growth is driven by the city's world class universities, strong professional and business services base, and collaborative ecosystem, which in turn are generating demand for specialised commercial and residential space and supporting graduate retention. Over 1.2 million sq. ft. of new educational space has been delivered in the city since 2019, including 140,000 sq. ft. in 2025 alone, demonstrating the city’s commitment to the growth of its educational institutions and development of talent.
 

Space requirements: Adapting to new demands

The Leeds economy is experiencing shifts driven by the prevalence of hybrid working models and the growth of key knowledge-intensive sectors, including Digital, AI, Health, and Finance and Professional Services. These changes are influencing the city's space requirements and necessitating adaptable property solutions.

The Leeds office market has maintained relative resilience, reporting fewer recent vacancies than many major regional counterparts. Additionally, the continued development of Grade-A office space, at Vastint’s Aire Park (circa 75,000 sq. ft.) and Platform’s Sweetfields (circa 152,000 sq. ft.), is demonstrating investor interest and helping to bolster the city as an employment destination.

Demand for high-quality spaces remains evident, with average rents now standing at £46 per sq. ft. per annum. This represents an 18 per cent increase compared to 2024 year-on-year. Concurrently, Grade A vacancy rates have remained around 2 per cent (Q3 2025) since 2023 (1.8 per cent), despite the delivery of 1.1 million sq. ft. of new space during this time. This competitive market for the highest quality space underscores Leeds’s appeal as an attractive business location.

The adoption of hybrid working models has also increased demand for collaborative spaces, which has reduced the suitability of some lower-grade offices. This trend creates opportunities for redevelopment and the implementation of adaptable property solutions, as evidenced by the Crane Survey 2026 data. These solutions include:

• Retrofitting and refurbishment: There is a market for B-grade office accommodation and refurbishments, offering quicker and more cost-effective delivery options. This adaptive reuse of existing structures is economically efficient and aligns with sustainability objectives by minimising embodied carbon and revitalising existing buildings. The City Core, for example, shows a significant proportion (41 per cent) of surveyed projects focused on retrofitting existing buildings, such as Bruntwood’s completed refurbishment of 36,000 sq. ft. at 14 King Street. Additionally, the pipeline indicated that office retrofit and refurbishment schemes will be a dominant supply theme in 2026, with schemes such as Rushbond’s Bank House and Bruntwood’s 3 West Village expected to commence on site.
• Collaborative and specialised commercial spaces: The Innovation Arc, for instance, aims to create environments for creativity and collaboration, including refurbished spaces in historic buildings to support innovation-driven entrepreneurs, start-ups, and businesses, as proposed at the Old Medical School.

In the context of Leeds’s Crane Survey results, we’ve analysed the key strengths of the city in terms of existing key sectors and areas that it sees having significant growth potential. This helps us understand what might happen to the space available as it caters for demand.
 

Leeds’s economic potential

Leeds stands as an economic powerhouse, boasting an economy valued at circa £40 billion, making it one of the largest economies within the Northern Powerhouse. Building upon the city's established strengths, particularly its deep-rooted professional and business services sectors including legal and finance, finance and professional services account for 40 per cent of Leeds’s GVA. This is further cemented by ‘Northern Square Mile’, an ambitious growth area, which reinforces Leeds’s economic specialisation, with a clear focus on strengthening the city as a national hub for Finance and Professional Services.

The city continues to evolve, leveraging its existing strong professional services base to help catalyse newer high-growth sectors such as fintech, digital, and health tech. This strategy is articulated in the Leeds Economic Vision, launched in 2025, which outlines how economic expansion in Leeds will be substantially driven by eight key sectors - Finance, Business and Professional Services, Health, and Digital and Tech. These collectively aim to contribute to 60 per cent of the city's economic growth.

Leveraging key anchor institutions, such as the Financial Conduct Authority and the City’s universities alongside leading private sector firms such as LHV UK, PrinSIX, and Hyperfinity in Fintech; Optum and TPP in digital health; and BJSS Accenture in computing, is critical. This helps to ensure the city is well-placed to capitalise on its established expertise in data analytics and digital technology. This strategic advantage will not only catalyse growth and innovation but also generate substantial demand for a highly skilled workforce in the city.

Leeds’s continued strength in knowledge-intensive economic segments, including financial services, business services, and information and communication, helps to underpin FinTech and Legal-tech clusters. These are forming around hubs such as Nexus, Platform, and the University of Leeds’s UK Centre for Green Finance.  

The number of FinTech firms in the Leeds City Region has tripled between 2020 and 2023; it is now home to over 60 FinTech companies, representing nearly 20 per cent of all Fintechs located across the North of England, whereas LegalTech firms in Leeds grew by 50 per cent from 2023 to 2024. This is enabled by significant city centre anchors include the Bank of England, the Financial Conduct Authority, and the National Wealth Fund, alongside private sector players such as GoCardless, who have chosen to take up Grade-A office space in Bruntwood’s West Village.

This concentration of expertise is actively supported by several accelerators and initiatives, which are crucial for attracting talent, investment, and fostering a thriving ecosystem. Existing initiatives include Barclays Eagle Labs, NatWest Accelerator, and Spark at the University of Leeds. Whitecap Consulting is seeking to accelerate the North of England’s FinTech sector through a dedicated FinTech Accelerator, which will provide a programme of growth focused support across the region.

Educational programmes, such as the FinTech App (backed by the Department for Education and FinTech North) and the UK Centre for Greening Finance & Investment (CGFI) national programme’s Innovation Hub at the University of Leeds. Furthermore, in 2023, the Centre for Finance, Innovation and Technology (CFIT) selected Leeds for its launch event, and has since partnered with the University of Leeds on a programme of placements and internships with FinTech businesses. Recognising Leeds’s strength in FinTech, local universities have responded by creating new courses, such as Leeds Trinity University’s Financial Technology MSc (with its first intake in the 2025 academic year), and Leeds Beckett University’s collaboration with FinTech North on a FinTech upskilling course for both students and alumni.

This industry growth and talent agenda is consistent with the city's workforce demand, which demonstrates a high skill level. Approximately 63 per cent of unique job postings in Leeds (between December 2022 and November 2023) were for higher-skilled management, professional, and associate professional occupations. This figure is notably above the average of 54 per cent across the remaining local authorities in West Yorkshire, indicating Leeds’s capacity to attract and develop skilled professionals.
 

Digital and health innovation: National significance

The city's capabilities in health-tech are evidenced by being home to 4 out of 5 NHS national offices including NHS England and NHS Digital. This places it at the forefront in reimagining health services, particularly through its work in digital health, medical technology, and health data, contributing to general advancements in healthcare.

HealthTech is defined by the World Health Organisation (WHO) as ‘the application of organised knowledge and skills in the form of devices, medicines, vaccines, procedures and systems developed to solve a health problem and improve quality of lives’.

A key development is the establishment of the Medicines and Healthcare products Regulatory Agency (MHRA) new digital hub at Wellington Place. The city was selected due to its world class capabilities in digital health, computing, AI and robotics at the hospital trust and within higher education institutions. The MHRA is expected to foster regional partnerships, attract skilled talent, and support local investment. NHS England’s Digital Delivery presence, and other programmes such as the National Pathology Imaging Co-operative (NPIC), Propel@YH a digital health accelerator programme targeted at SME innovations, alongside being home to a growing health cluster of over 60 health tech start-ups also evidence Leeds’s credentials in this sector.

Leeds’s engagement with Artificial Intelligence is indicated by the high AI exposure within its professional, scientific, technical activities, and finance sector. The city is focused on building skills, business support, and infrastructure to facilitate AI integration, including investment in new datacentres. Outside of the City Centre, Microsoft has invested over £100m at Skelton Grange in south east Leeds for a hyperscale datacentre, located in a new AI Opportunity Zone, with potential to become a major data and technology cluster. Alongside this, the Leeds Institute for Data Analytics (LIDA) in the University of Leeds undertakes research in data-intensive and ethical AI applications, reinforcing and strengthening Leeds’s position as a city of excellence for data analytics and digital technologies.

The pool of talent is therefore reflected in the development activity taking place.  Similarly, Nexus, also located on the University of Leeds campus, facilitates innovation and collaboration between businesses and academia. It supports high-growth companies by providing access to research, talent, and facilities. The next phase of the Innovation Arc is set to expand this collaboration further with the University of Leeds’s Campus Reimagined programme seeking to develop more spaces for businesses and access to expertise, alongside Leeds General Infirmary's emerging Innovation Village.

In 2025, Scarborough Group International announced they had entered into a contract to acquire the Old Medical School - a 75,000 sq. ft. Grade II* Listed building – and are seeking to deliver space for collaboration and new ideas in health, including the commercialisation of new ideas through Health Innovation Leeds’s incubator to grow new businesses. The Old Medical School forms part of Leeds Teaching Hospitals NHS Trust’s emerging Innovation Village, which is forecast to boost the regional economy by £13 billion, creating 4,000 jobs. The Innovation Village is also one of West Yorkshire’s HealthTech and Digital Tech Investment Zone’s flagship projects, backed up a proportion of the £160 million of government funding across the Region’s Investment Zone.
 

Talent pipeline and retention: Fuelling the ecosystem

Critically, Leeds must maintain a robust talent pipeline through effective graduate retention, supporting its innovation ecosystem. The city's academic strength is a key asset, serving as a significant hub for higher education. Leeds hosts five universities with over 80,000 students, experiencing an inflow of undergraduates and graduates.  

Student enrolments at West Yorkshire higher education institutions have increased by 17 per cent since 2018/19. This expanding student population represents a valuable future workforce for Leeds and reinforces the city’s position as an attractive destination for students.  This influx of talented and skilled individuals also contributes to the city's dynamic environment.

Graduate retention rates in Leeds and the regional markets are increasing, supported by job opportunities and the city's lifestyle. Retaining these graduates is important for maintaining a skilled workforce that meets local needs. Leeds’s current retention rate stands at 39 per cent, marking a 10-percentage point increase from 2014/15.  Leeds is one of the fastest growing cities in the UK, with a population expected to grow to over 900,000 in the next decade.

Reflecting this, since 2015, over 9,500 student bedspaces have completed in Leeds, alongside over 7,300 completed residential units in the Crane Survey area. The completion of c.1,900 PBSA bedspaces in 2025, with an additional c.1,400 beds under construction, responds to this demand. They also include a growing list of residential amenity spaces, comprising a diverse offering including cinema and games rooms, gyms, dance studios, study and lounge areas, as evidenced at The Fabric Works being delivered by Primus Student, which students and graduates alike benefit from.

This level of activity in the residential and PBSA sector, enhancing and diversifying accommodation for both students and graduates, increases Leeds’s attractiveness as a destination to study and work post-graduation. Purpose-Built Student Accommodation (PBSA) and Build-to-Rent (BTR) developments have therefore played an important role in supporting graduate retention and city vibrancy.  These residential options in turn support businesses seeking skilled employees.

The city's future economic ecosystem will be critically shaped by continued support for innovation-led and start-up businesses alongside sustained population growth. With its tech sector growing at double the UK average, the Leeds Innovation Arc and Northern Square Mile will be central to anchoring the next generation of innovation space and Finance and Professional Services firms. The emerging Innovation Village at Leeds General Infirmary, part of the West Yorkshire Investment Zone, further underscores this commitment.

To sustain this trajectory, strategic investment in the talent pipeline and deeper integration of the city's five universities into the local economy, building on institutions like Nexus, will be paramount. This will not only drive collaboration and support entrepreneurs but also ensure the continuous development of high-quality, flexible office spaces that meet the evolving demands of a hybrid workforce, attracting and retaining the businesses and talent essential for Leeds's £40 billion economy.