Lettings in city’s commercial core were boosted by the 270,000 sq ft letting to HMRC at India Buildings but there remains a concern over the lack of new office space coming through. Tony McDonough reports

Liverpool’s city centre office market enjoyed its best quarter for lettings in several years in the first quarter of 2018 – boosted significantly by the 270,000 sq ft letting to HMRC at India Buildings.

However, leading agents in the city have repeated their warning that the central business district urgently needs to replenishing its fast-diminishing office stock.

In the first three months of the year the central business district saw lettings totalling 337,928 sq ft. This compares to deals totalling 92,989 sq ft in the first quarter of 2017.

Apart from the HMRC deal other notable lettings including financial advisors Wilson Grange moving into the city and taking 10,682 sq ft at 12 Princes Parade and tax advisors BDO committing to 17,085 sq ft at 5 Temple Square.

Record-breaker

Andrew Byrne, chairman of the Professional Liverpool Property Group and associate director at CBRE, said: “The first quarter of 2018 is a record-breaker for Liverpool city centre, as the average first quarter take up over the last five years has been just over 80,000 sq ft.

“Looking forward to the remainder of 2018 there are a number of transactions in legal hands in excess of 15,000 sq ft which bodes well for the annual take-up figures.”

However, on the lack of new development over the past few years, Mr Byrne added: “The real worry within the Liverpool market is the severe lack of supply going forward in the short to medium term.

Limited options

“To date, the total availability within the central business district is 643,821 sq ft with  300,000 sq ft of that space in an un-refurbished condition, and due to the sporadic nature of the supply provides limited options to offer what the modern occupier wants.

“Realistically it is likely any sizeable good quality suite will be filled in the next two years, leaving companies who have lease events beyond 2020 with limited options. This will hinder some companies ability to expand and may see them look to other cities to satisfy growth.

“Developments such as Liverpool Waters, Paddington Village and Pall Mall all have the ability to start plugging the gap. The Spine within Paddington Village will be the first building out of the ground and can offer up to 80,000 sq ft from late 2020 following the recent commitment from The Royal College of Physicians for 80,000 sq ft. However, we need more in order to help bridge the gap.”

‘Severe shortage’

Stuart Keppie, partner at commercial agency Keppie Massie, echoed that concern over the shortage of available stock, saying: “HMRC’s letting at India Buildings was a fantastic deal for the city and will boost the micro economy.

“However, the overall message is that we have a severe shortage of quality stock. That is not about the lack of grade A and attracting inward investors, but also about not having the good quality secondary stock to meet the demand of professional firms within the city.

“The big hope is that the 400,000 sq ft planned for Pall Mall as well as Peel’s proposal to build 81,000 sq ft of space at Princes Dock both come out of the ground. With the necessary support from the city council it is hoped that this will happen sooner rather than later.”