Data compiled in the third quarter of 2024 indicates improving optimism in Liverpool’s City Centre office market, with office space uptake more than tripling.
A total of 85,938 sq ft of office space was acquired in Q3 in 22 deals within Liverpool City Centre, which is a significant increase from the 23,879 sq ft of lettings in the previous quarter.
The figures from the Liverpool Office Agents Forum (LOAF), which is made up of property agents across the city, include the completion of the largest transaction of the year so far, with the Home Office expanding their footprint in the city centre, acquiring 24,672 sq ft of office space in the Capital Building in Union Street.
There have also been sizeable units taken in The Plaza on Old Hall Street by Mitchell Charlesworth and Slater and Gordon.
To date this year, 205,851 sq ft of office space has been acquired in Liverpool City Centre which reflects a major increase from the same time last year when the figure had reached 167,186 sq ft at the end of Q3.
But Adam Fleming, Surveyor at Fisher German and a member of LOAF, said that whilst the figures are encouraging, it is important to assess these carefully within the wider context of the current market.
He said: “The increase of more than 60,000 sq ft of take-up in Q3 is a massive contrast to a challenging second quarter of the year, and this is due to a combination of a disappointing Q2 and that several large deals were completed in Q3 which have greatly boosted the figures.
“This shouldn’t detract from the fact that there is a lack of high-quality modern office space in Liverpool, and greater collaboration is required between private and public sectors to catalyse speculative development in the city and drive headline rents, as seen in other major regional centres.
“Activity generally slows down in the final quarter of the year as we approach Christmas but hopefully there will be a strong finish to 2024.
“Similarly to Q1 this year, this has been another buoyant quarter for city centre take-up, particularly in the Central Business District, which gives an early indicator that with further investment into the city, and the addition of much-needed brand-new Grade A office stock, demand for good quality accommodation in Liverpool will grow. Whether that will materialise remains to be seen.”
There is still strong demand for smaller office suites in Liverpool City Centre, with 59 per cent of deals falling into the 2,000 sq ft-and-under market.
“Over the last couple of years, there have been a lot of smaller transactions around 2,000 sq ft and if there is no investment in city centre office accommodation as part of a wider strategy alongside external investors, then we will continue to see smaller scale transactions dominating the Liverpool market, with high quality space with strong ESG credentials being top of occupiers’ agendas,” Adam continued.
LOAF is made up of Fisher German, CBRE, Avison Young, Worthington Owen, Mason Owen, Keppie Massie, Mason Partners, Eddisons, Hitchcock Wright & Partners, LM6, SK Real Estate, and B1 Real Estate.
