Liverpool office market cools in Q1
Having recorded a combined 106,000 sq ft of deals in the last quarter of 2021, the amount of space transacted in the first three months of this year was 80,000 sq ft, according to Avison Young’s latest Big Nine Report.
Liverpool’s out-of-town market far outperformed the city centre in Q1 of 2022; 72,700 sq ft of deals were signed in the likes of Wirral, Wavertree and Knowsley, while just 8,000 sq ft of space was let in the Liverpool’s central business district.
Indeed, the five largest transactions were all in the out-of-town market. MJ Quinn’s 11,200 sq ft deal at Nexus in Knowsley was the standout deal.
The biggest deal in the city centre was Keller Lenker UK taking 3,293 sq ft at the Cotton Exchange.
Despite underperforming in the first quarter of 2022, Avison Young predicts city centre take-up could increase as the year goes on.
“Although Q1 take-up was low, demand and enquiry levels have increased and there are a number of large active requirements in the market,” the report said.
“There are a number of deals close to completion which should see a significant increase in take-up during Q2 and Q3.”
Liverpool continues to suffer from a lack of supply of grade A office space, which has resulted in upward pressure on rents, Avison Young said.
The headline rent in the city increased during Q1 from £22/ sq ft to £23/ sq ft.
Despite a lack of supply, speculative development of offices in Liverpool has not been forthcoming and the wait goes on for pre-letting activity at major development zones including Pall Mall and Liverpool Waters.
Other office schemes coming forward in the city include Kinrise’s conversion of St Martins Bank, which could provide 160,000 sq ft of space, as well as Hemisphere, the next phase at Paddington Village.
However, these projects are not likely to complete until 2024 at the earliest.
Liverpool was by no means the only city to report a drop in office market activity in the first three months of 2021. Across the nine largest markets outside London, take-up totalled 1.8m sq ft, a 40% decrease compared to the final quarter of 2022, according to Avison Young.