The Spine Main Image
The Spine will provide 160,000 sq ft of grade A office space

Liverpool in ‘urgent need’ of prime office space

Dan Whelan

The volume of commercial space leased within the Liverpool City Region in 2019 fell by more than 30% year-on-year to 568,000 sq ft, below the five-year average of 638,000 sq ft, according to a study.

The latest annual Office Market Review, compiled by Professional Liverpool and Liverpool BID Company, showed a drop in office take-up since 2018 and raised concerns over a lack of prime stock in the city-region.

Of the total space taken in 2019, around 60% was in the commercial district of the city centre, where the largest deal was Sony’s 65,000 sq ft in the Echo Buildings. Outside the commercial district, the largest deal was Greensill’s 27,000 sq ft letting at Daresbury Park 2100.

Last year’s total was significantly below the 867,000 sq ft achieved in 2018, when HMRC took 350,000 sq ft at India Buildings.

The next available grade A office space will come to market when the Spine at Paddington Village completes in the university district this autumn.

Other large projects in the pipeline include Liverpool Waters and the Pall Mall Development but until these projects complete, occupiers are looking at Grade B and B* office space to satisfy immediate demand, according to the report.

The report said: “Liverpool’s office market is in good health, yet there is an urgent need for Grade A office space, and, after 2018’s record-breaking year, a need to focus on the future strategy for growth.”

Echo Building CGI

Sony took 65,000 sq ft at the Echo Building in 2019

The report added that demand was also growing for short term flexible spaces for small businesses looking to establish a presence.

While the number of transactions has decreased, the size of transactions continues to increase year on year, the study shows. In 2014, the average take-up in the commercial district was 3,209 sq ft, while in 2019 that figure had grown to 4,040 sq ft.

Exchange Flags Feb 2019

Exchange Flags was sold to Ashtrom for £68m in 2019

The report noted that “political uncertainties” caused a reduction in investment volumes in 2019, with owners showing reluctance to market their properties. That said, last year still saw the sale of Exchange Flags by Shelborn Asset Management to Ashtrom Properties for £68m, reflecting a net initial yield of 7.65%.

Andrew Byrne, head of the property group at Professional Liverpool, said: “While we didn’t manage to hit the dizzy heights of 2018’s figures, 2019’s results are more aligned with the 5-year average.

“We continued to see downward pressure on the supply chain, particularly within the commercial district, which contracted by over 33% and hit an all-time low of 475,351 sq ft.

“The need for Grade A supply is growing year on year and the lack of speculative development is meaning larger footloose requirements are dismissing Liverpool as an option in the short to medium term.”

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Our Mayor, Steve Rotherham, needs to work much harder to get our connections to Northern Powerhouse Rail and HS2 hardwired into the planning process. Until he does we will continue to lose out. If Manchester can do it so can we!

By Red Squirrel

I agree. Unfortunately the politicians in Liverpool lack vision and ambition. Rather spend time blaming others for its failings than getting on with developing a framework which will attract commercial businesses as well as tourism. Current, expensive, infrastructure schemes, such as for The Strand, Lime Street and taking over bus transport should be abandoned and the money spent on providing rail links to John Lennon Airport, Liverpool F.C and Ellesmere Port to South Parkway. Planning takes an eternity for mainly low grade schemes. The entrepreneurial spirit of its people, plus Peel Holdings and the universities drives on the Liverpool City Region, despite the politicians.

By Deep Thinker

How many times are we going to hear the same recommendations yet see no meaningful action? Expect more of the same next year.

By Exhausting

This is seriously impacting on our employment prospects, with seemingly office uptake in other parts of the NW on a daily basis, I can’t help feel it’s to do with the political scene here in Liverpool? Pall Mall is to start soon, but with a hotel as the first build, as long as it kick starts the rest of it. Then we have Paddington Village, the next tranche of construction will be a good indicator of how we are performing as a city and attracting commercial space, oh I hope so!

By Liverpolitis

Always been the case. And sadly Peel are far too busy up the other end to really help out. No change there then

By George Mc

The personality cult masquerading as a council claims that the hotel is an enabler for the office development at pall mall, but then they also claimed that the brown shack that now defiles Lime Street would be an enabler for development of the ABC. Still waiting.

If they were to claim they plan to spend millions on purchasing flags and having those fitted, I’d believe them.

On anything else, I no sooner believe the grandiose ramblings of Liverpool “developers”.

And perhaps therein lies the true issue as to why Joe’s Liverpool seems incapable of attracting serious investment, while Manchester gets to build more employment space in a year than Liverpool now has in total.

By Mike

But I thought having a Combined Authority and devolution was the solution to all problems?

By Devo

Liverpool Waters. You mean Peel ‘aving a lawf’. Peel only build noisy mucky stuff in Lpool.

By Fred

Liverpool should get out of of its defeatist way of thinking and break the status quo. Offices are needed. We are a similar size to Manchester and we want a level playing field.

By MmcDrama Queen

I agree with deep thinker. I believe that a countries greatest asset is its people and anything else is a bonus. Our river is a bonus. Liverpool has a high young population, that is also a bonus also could you imagine anyone trying to put down a determined liverpool girl…lol. The only bonus we don’t have is vision from the top. Our downside is: merseyside/ liverpool city region. What county do we live in? It’s messy and if people think it’s not important tell me who merseyside police commissioner answers to? And that apllies to merseyside fire and rescue

By George

The only reason there is a shortage of office space All the office buildings have been convened into apartments or hotels causing the shortfall Very short sighted approach to the city centre….

By Brian Pagan

An Article 4 Direction across the whole WHS area would easily have prevented the loss of offices to residential use under permitted development. As always LCC were far too slow on the uptake and the horse has long since left the stable.

By SillyGoose

There are undeveloped sites. Undeveloped sites owned by developers. Developers who are in the business of making money from developing sites.

There is a reason the undeveloped sites are undeveloped. And that reason is there is not the demand. There are no pre-lets at Pall Mall because there is not the demand.

Take the report with a pinch of salt and stop blaming the Council.

By Demand

Try upgrading some of the vacant office space available instead. Look around the City centre, more vacant buildings than Cherynobl. What is the problem with them?? NO GRANTS OR SOMETHING!! Look inside the box for a change.

By K Connolly

Build it and they will come.

By Phil O'Dreams

Hello Mr Demand! I have been reading the skyscraper city research site and many important people post there who say they don’t build Liverpool office’s due to government bias!! We need to stop this bias so we can have jobs for our youngster’s!

By Mary Woolley

Council too busy signing off speculative residentials with little proof of funding to complete half the schemes. What has been the role of Vision (now absorbed back into LCC), the LEP, the Combined Authority in allowing the long-term shortfall to continue for years? The city will never reach its full potential while the culture of cronyism persists within LCC and the Combined Authority.

By John Smith

This has been known for years!

By Stuart wood

They are gonna always have office problems if they say they are going to build 25 storey buildings and then reduce them to 13. They’ve wasted 12 floors of grade offices

By George