Liverpool office market recovering
The city centre saw quarterly office take-up exceed 100,000 sq ft for the first time in two years, beating the five-year average of 74,000 sq ft by 50%, according to Bilfinger GVA’s Big Nine report into regional office occupier trends in the third quarter of 2015.
Q3 deals in the city centre topped 110,000 sq ft and included the first pre-let in excess of 30,000 sq ft since 2010 at The Department, refurbished space currently being developed by syndicate Lewis’s LLP, where NHS Liverpool Clinical Commissioning Group has taken 33,400 sq ft, marking the city’s largest office letting of 2015 to date. Completion of the refurbishment is due by the end of the year.
Ian Steele, director at Bilfinger GVA Liverpool, said: “Q3 take-up exceeded 100,000 sq ft which also included the three largest deals of the year so far. In addition to the pre-let at The Department, Carpenter’s Solicitors committed to 19,000 sq ft at [Jolivet Group’s] No 1 Tithebarn and Mann Island Finance took 11,000 sq ft at [Standard Life’s] No 5 St Paul’s Square.
“Despite a relatively slow first half of the year in terms of take-up, we are anticipating a strong last quarter given the number of deals currently going through legals which could see take-up exceed 100,000 sq ft for the second consecutive quarter.”
Steele added: “Occupier demand remains fairly strong but the biggest challenge the market is likely to face during the course of the next 12-18 months will be the lack of Grade A stock, given that there is less than 12 months of existing supply and very little speculatively refurbished and no new space due to be delivered into the market.”
Headline rents in Liverpool are £21/sq ft with a net effective rent after rent-free periods of £16.28/sq ft. Typical rent-free periods are 30 months. This rent was the lowest of all the nine cities studied, which averaged £27.28/sq ft quoting and £22.77/sq ft net effective rent.