A total of 20,000 sq ft of office deals was signed in the city centre during the second quarter of 2020, well below the 52,000 sq ft reported for the same period in 2019, according to the latest Big Nine market report from consultancy Avison Young.
The figure for April, May and June is also significantly lower than the five-year quarterly average for the city at more than 100,000 sq ft.
Law firm Taylor Wessing took 12,700 sq ft at Edward Pavilion in what was the largest deal of the quarter, according to Avison Young’s report.
In contrast, some out-of-town markets performed better in both Greater Manchester and the Liverpool city region.
In Liverpool, out-of-town markets accounted for 15,000 sq ft of the total deals transacted in Q2, compared to 22,000 sq ft for the same period last year, a smaller drop than the city centre experienced.
Manchester also saw an uptick in out-of-town lettings compared to Q1, reaching 137,000 sq ft from 130,000 sq ft, with Old Trafford and Salford Quays the hotspots, according to the findings of the Manchester report first published last week.
Ian Steele, principal of Avison Young’s Liverpool office, said: “Like all cities across the Big Nine report, Covid-19 has had a significant impact on [Liverpool’s] city centre office market, with the majority of occupiers either delaying or putting their occupational requirements on hold indefinitely, while undertaking a strategic review and reassessment of their spatial requirements.”
Steele added that businesses with smaller requirements had been more active and, in general, were searching for space on more flexible, short-term leases.
Chris Cheap, principal of Avison Young’s Manchester office, said: “It is testament to the robusticity of the central Manchester office market that even in the depth of lockdown it still outperforms other regional cities, however the reduction in market capacity is plain to see and is indicative of a somewhat paused market place.
He added that that it was hard to gauge the depth of the impact Covid would have on the wider office market.
There have long been concerns over lack of grade A office space in Liverpool. The Spine at Paddington Village in the Knowledge Quarter is the closest such pipeline development to completion. The 160,000 sq ft block, which will be home to the Royal College of Physicians, is due to complete at the end of the year.