Take-up of office space in Liverpool in Q4 2022 at highest level since 2019 with prime rents also breaking through the £25 per sq ft barrier. Tony McDonough reports
Lettings in Liverpool’s office market hit 189,601 sq ft in the final three months of 2022, according to the latest Big Nine survey from Avison Young.
This was the highest quarterly take-up of office space in the city since before the pandemic in 2019. It was 45% above the 10-year average for Liverpool and a big improvement on the third quarter which was 12% down on the 10-year average.
Avision Young also reports that rental levels for grade A space in the city centre was also up 16% to £25.50 per sq ft. A higher headline rent makes the city more attractive to investors and can increase the likelihood of speculative office development.
However, Liverpool is still facing a chronic shortage of good quality new and refurbished office space. At just 5.4%, supply is at an historic low level and down 16% on the previous quarter.
However, Ian Steele, principal in Avison Young’s Liverpool office agency team, is optimistic the picture will improve during 2023.
He explained: “This year looks set to be another exciting year for our city, with 140,000 sq ft of refurbished space currently under construction and due for completion in the second half of 2024 at Martins Bank Building.
“And a number of other landlords are looking to speculatively refurbish space in key buildings such as Peel at Princes Dock and CEG at Exchange Station. These will help address the short-term supply situation.”
A number of key deals drove the surge in take up in the final quarter of 2022. These included Firesprite’s 54,121 sq ft letting at 91-105 Duke Street, which was the city’s biggest for three years. Headline rent was £20 per sq ft.
And Green Switch Capital at Exchange Station, Wealth at Work at No 5 St Paul’s Square, and Direct Line at No 1 St Paul’s Square, all contributed to ending the year on a high.
Released quarterly, Avision Young’s Big Nine survey looks at the nine biggest UK office markets outside London, including Liverpool, Manchester, Leeds, Birmingham, Newcastle, Bristol, Glasgow, Edinburgh and Cardiff.
Manchester’s Q4 take-up dwarfed that of every other city on the list with lettings totalling 757,094 sq ft. Next was Birmingham at 273,142 sq ft and Leeds at 269,710 sq ft.
Leeds has the highest headline rent at £42.50 per sq ft. It is followed by Manchester, Birmingham and Edinburgh all at £40 per sq ft.
On Liverpool’s market, Ian added: “Availability could potentially increase over the next 12 months with a number of occupiers in key city buildings looking to downsize from their existing occupational footprints.
“As workplaces take on hybrid and flexible working policies, with a greater emphasis on health and wellbeing many occupiers are reviewing their occupational requirements.
“They are looking at taking better quality space with a greater emphasis on sustainability and ESG standards.
“However, there are a number of occupiers who are looking to increase their occupational footprints across the city who are potentially looking to relocate staff from other locations across the UK.”