Liverpool’s office market in Q3 sees highest take up of space since 2022 but there remains a chronic shortage of grade A stock with prime rents – essential to incentivise development – now the lowest among UK cities. Tony McDonough reports
Take-up of office space in Liverpool surged in the third quarter of 2025 and saw the strongest performance since 2022.
Helped by a 52,000 sq ft letting at The Capital in Old Hall Street to the Government, lettings in July, August and September totalled 146,000 sq ft, 17% above the 10-year average.
This Government letting at The Capital, where the Home Office already has a major presence, is Liverpool’s largest office transaction since 2022. The Government and services sector dominated take-up in the quarter, comprising 49% of activity.
These latest figures were compiled by property consultancy Avison Young and published as part of its quarterly Big Nine survey. This analyses the nine biggest office markets in the UK outside London.
And, despite the headline take-up figures, the study also illustrates Liverpool’s long-term issue of a chronic lack of good quality space, particularly grade A, within the commercial district.
According to the Big Nine: “Office vacancy continued to decline, falling 2bps to 5.6%. This was driven by demand, which reduced supply to the lowest level across the Big Nine.
“Grade A vacancy also fell to 0.3%, with minimal new space expected to come forward in the short term. Prime rents remained flat over the quarter at £29.50 per sq ft, the lowest across the Big Nine, while rent-free periods held at 21 months for a 10-year lease.”
Liverpool’s commercial district has fallen behind other regional cities in recent years as its pipeline of grade A space has dried up. New space is seen as essential to attract blue chip occupiers.
Key to speculative development is headline rents. Developers and investors won’t take the risk unless they can see good returns. In recent years Liverpool’s headline rent, currently at £29.50 per sq ft, has been seen as too low to kick-start new schemes.
In comparison Manchester’s £45 per sq ft headline rent has seen the city create a strong pipeline of space. It saw more than 392,000 sq ft of space let in the third quarter of 2025.
Bristol has the highest headline rents of the Big Nine at £50 per sq ft. Birmingham is next at £46.50 followed by Edinburgh and Leeds on £46. Below Manchester is Glasgow on £41.50, Newcastle £32 and Cardiff just above Liverpool on £30.
In February Tim Garnett, chair of the Liverpool Office Agents Forum, said: “As a city we must be able to offer opportunities to large inward investors and employers, who are footloose across the regions.
“It is critical therefore that we see a push for improved supply, specifically in the heart of the commercial district.”
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It is now more than a decade since the last significant investment into grade A office space in Liverpool’s CBD. That was the St Paul’s Square development off Old Hall Street. That needed state support, in the form of EU funding, to get built.
In May Liverpool City Council said it was ready to spend £15m to revive the stalled 111,500 sq ft Pall Mall office project. This was due to go ahead with a pre-let from BT but the communications giant pulled out following the pandemic.
Costing a total of £55m, the development would rise to eight storeys and would also include a new urban park ground floor retail units. It will be built by Kier Property Developments and ready for occupation by summer 2028.