12th annual Commercial Office Market Review reveals that while there is almost 1.3m sq ft of office stock in the office core just 50,000 sq ft of this is grade A space. Tony McDonough reports.
Liverpool city centre’s commercial district saw a 13% surge in lettings to 343,000 sq ft in 2016 – but available stock is falling to critical levels.
The 12th annual Commercial Office Market Review reveals that while there is almost 1.3m sq ft of office stock in the office core just 50,000 sq ft of this is grade A space.
Change of use of a number of buildings in the area to residential or leisure in the past couple of years coupled with a lack of development has led to this “dramatic fall” in space.
The report, which is jointly produced by member office agents of Professional Liverpool’s Property Group and supported by the Liverpool BID Company, was launched to a property audience on Thursday morning.
They were told that office take up across the city region exceeded 500,000 sq ft for the fifth year running, although it was down 9.3% on 2015.
City centre office take-up as a whole was up 1% to 387,000 sq ft. The figure for the commercial district was the second-highest since 2009.
The report also reviewed that 51% of the lettings in the office core were less than 1,000 sq ft.
Bill Addy, chief executive of the Liverpool BID Company, said: “It is extremely encouraging to see that take-up remains positive, particularly in the commercial district, but we do need to address the issues around the shortage of office stock.
“It’s encouraging to see schemes such as Pall Mall coming to fruition as it will provide the grade A space that is much needed to attract investors to the city.
“We need to continue to encourage this investment and further growth in the city’s office market so we can move it to the next level.”
The largest deal of 2016 in the commercial district was Liverpool John Moores University taking 58,264 sq ft at Exchange Station
2016 continued the trend of larger floor plates being converted into smaller suites, with notable successes at Cotton Exchange (21 deals), Oriel Chambers (16 deals), Exchange Station (10 deals) and Graeme House (nine deals).
There were more than 1.3m sq ft of investment transactions completed in the commercial district, with the largest deal being the sale of Exchange Flags (350,000 sq ft) to Shelborn Asset Management.
Tony Reed, chairman of the Property Group of Professional Liverpool said: “Take-up remains strong and we have seen a good amount of deals recorded, particularly in the city fringe area, with a 57% increase in the number of deals.
“Sector wise, we’ve seen a rise in professional services, along with training and the creative, IT and media sectors.
“We’re also continuing to see the trend of office space being converted for residential/leisure use, for example, Silkhouse Court, Reliance House and Corn Exchange.”