Office take-up across the Liverpool city region for 2016 exceeded 500,000 sq ft for the fifth year running, according to the 12th annual Commercial Office Market Review.
Total take-up for 2016 was 523,456 sq ft, down 9.3% from the 576,847 sq ft let in 2015.
The review is produced by Professional Liverpool’s property group and supported by the Liverpool BID Company.
Bill Addy, chief executive of the Liverpool BID Company, said: “It is extremely encouraging to see that take-up remains positive, particularly in the Commercial District, but we do need to address the issues around the shortage of office stock. It’s encouraging to see schemes such as Pall Mall coming to fruition as it will provide the grade A space that is much needed to attract investors to the city.”
Tony Reed, head of Liverpool sales for Bruntwood and chairman of the Professional Liverpool property group, added: “Sector wise, we’ve seen a rise in professional services, along with training and the creative, IT and media sectors. We’re also continuing to see the trend of office space being converted for residential/leisure use, for example, Silkhouse Court, Reliance House and Corn Exchange.”
City centre market
Take-up in the city centre, made up of the commercial district and city fringe areas, was up by 1% with 386,981 sq ft. Of this, 342,714 sq ft was let in the commercial district and 44,267 sq ft in the city fringe.
Commercial district take-up climbed by 13%, with the largest deal being Liverpool John Moores University taking 58,264 sq ft at Exchange Station.
Although the volume of space taken in the city fringe was down slightly on 2015, the number of deals in that market rose from 14 to 22.
In both the commercial district and city fringe, small deals were to the fore as the trend of subdividing larger floorplates into smaller suites continued. This was the case at Cotton Exchange, which secured 21 deals, Oriel Chambers with 16 deals and Graeme House, which netted nine deals.
Out-of-town take-up fell from 193,824 sq ft in 2015 to 136,475 sq ft.
The biggest winners were Knowsley, where take-up climbed by 64%, and North Liverpool, including Bootle and Waterloo, with a 60% increase. The largest deal out of town was Kura’s 34,983 sq ft letting at Caspian House.
As in 2015, there was just one deal for grade A space in 2016, with 5,387 sq ft at Alaska House let to H&T Group. Grade B space accounted for 92% of all deals in the out-of-town market.
Supply of quality stock is cited as a concern. Slightly more than 50,000 sq ft of vacant grade A space remains in the commercial district, down from 91,869 sq ft in 2015. Much of the 1.3m sq ft of vacant office space within the commercial district is of little appeal, with just 445,565 sq ft described as being of grade A or B and ready to occupy.
Across the city region, deals for grade B and grade B* offices – space refurbished to grade A standard – accounted for 115 of the 191 deals completed in the city. Just three grade A deals were completed in the commercial district.
Despite the low level of grade A letting activity, the commercial district saw several major investment deals, with 1.3m sq ft of space sold. The largest buyer, with 350,000 sq ft at Exchange Flags and more than 500,000 sq ft at India Buildings was Shelborn Asset Management.
The full report is available here.