Liverpool office take-up beats average in third consecutive quarter
Office take-up in Liverpool reached more than 90,000 sq ft in the first quarter of 2016, according to Bilfinger GVA’s Big Nine report, which analyses office activity in the largest regional cities.
Manchester experienced a slower than expected start to the year, but a series of significant pending deals are expected to strengthen Q2 figures, said Bilfinger GVA.
Take-up in the first quarter in Liverpool exceeded the five-year quarterly average of 80,000 sq ft, with a number of deals completed which included 26,000 sq ft of lettings at Walker House in Exchange Flags, 11,500 sq ft of which was to Brookes Bell. At Mann Island, Seadrill acquired an additional floor of 10,890 sq ft.
This follows two consecutive quarters of Liverpool office take-up exceeding 100,000 sq ft.
In Manchester city centre, take up was slightly below the five-year quarterly average at 196,533 sq ft of lettings for the first quarter. Key deals completed included Squire Patton Boggs at 28,000 sq ft at 1 Spinningfields, Kacoo Fashion with 25,000 sq ft at Fabrica, and Arup taking 16,000 sq ft at 4 Piccadilly Place.
The slower than predicted start to the year for the Manchester market is attributed to law firm Freshfields’ anticipated 80,000 sq ft commitment at English Cities Fund’s One New Bailey, not completing before the end of the quarter as initially hoped.
Ian Steele, director at Bilfinger GVA Liverpool, said: “It’s been another strong quarter in Liverpool and there continues to be a healthy pipeline of new occupier requirements and an increase in transactional activity which should ensure that take-up levels remain high.
“However, the main issue is that the city is faced with a diminishing supply of good quality office space and no immediate development pipeline. Liverpool now has less than a year’s worth of Grade A supply and with no new office development schemes currently on site, it will be 2018 at the earliest before we see new space delivered into the market. This is likely to have a detrimental effect on take-up levels and transactional activity over the next few years as both inward investment requirements and existing occupiers will be faced with limited options when considering relocation.”
Overall city centre and out of town take-up across the country amounted to 2.3m sq ft, 13% above the five-year quarterly average. City centre total take-up comprised 1.47m sq ft, 17% above the five-year quarterly average. Out of town total take-up amounted to 0.86m sq ft, 7% above the five-year quarterly average.
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Exchange Flags is spectacular, nice picture.
By PP
The view opposite of the Georgian Town Hall is even better, not to mention Rowse’s Martin’s Bank on the left-hand side, one of the country’s finest examples of American classicism.
By Paul RIBA tours Liverpool
What rents are being achieved though? 1 Temple Square, a refurbishment currently underway, is only £8 psf according to the agents! No wonder they aren’t developing new offices!
By Oli
Great to see Aztec involved in one if the largest lettings in Liverpool for Brookes Bell at Walker House, Exchange Flags.
By Neal Maxwell
It is truly lovely around Exchange Square. Someone once said to me when you are walking about look up. One is so used to just looking at eye level but the detail on some of these buildings is quite remarkable and we just don’t notice. So wherever you are look up and appreciate the beautiful architecture (but don’t fall over).
By Flo Motley
Office space will also reduce massively with the conversion of Silkhouse Court on Tithebarn Street into residential.
There’s bags of potential on Tithebarn and Chapel Street’s for some good quality office developments to occur…we just need a developer, commercial quarter BID and the Council to be proactive in addressing the deficit in office space the city is currently facing.
By anon
anon-and also an office market to be able to support rents that make office development viable-there is a reason offices are being converted to alternative uses.
By economics
Yes “economics”, the reason is because the government denied Liverpool an exception to the law that allows developers to convert offices to apartments, and they are able to make more money from this because a lot of people with money want to live in Liverpool right now. Manchester wasn’t subjected to this but was given the exception required, else it too would be suffering the same issues right now.
By Mike
That’s completely untrue Mike, Manchester council haven’t denied any office to resi applications.
By Banj
I didn’t say they had. They don’t need to, because developers know not to bother applying. The situation is different in Liverpool, because the law to which the city doesn’t have an exception to, but which Manchester does have an exception to, denies them the ability to refuse permission in most cases. If you want to join in with the conversation Banj, then you obviously need to read up and know what you’re talking about.
By Mike
Crikey, where are the trees? One thing we do atrociously in this country is having street foliage, hanging baskets, trees etc etc. It looks so sterile.
By The Squirrel's Nuts
Office to resi exceptions is a tangential topic-the point I was making was that effective rental values below £10psf do not create values that support development. in the absence of sustainable demand for the existing use, owners are forced to turn to the best alternative being residential.
By economics
What absolute nonsense propaganda on every count. You know nothing about the location, nothing about the city, nothing about the buildings, and nothing about the businesses that were based in the developments previously.
And clearly, “economics”, you knew absolutely nothing about the law being spoken about and its effects.
Quite what it is that sees a crew of people in Manchester so desperate to talk down the economy of their neighbour is beyond me.
By Mike