Take-up in Liverpool's city centre office market was flat at around 260,000 sq ft in 2012, according to the latest office research from the city's agents.
Below is an edited extract from the Liverpool Commercial Office Market Review 2012, published jointly by Liverpool Vision, Liverpool Commercial District Partnership and Professional Liverpool.
Central business district
Total CBD office take-up in 2012 was 259,602 sq ft, little changed from the 268,298 sq ft reported in 2011. Both are above 2010 (207,515 sq ft) and 2008 (245,000 sq ft) suggesting a return to a stable market after several years of disruption. In 2012 it was truer than ever that demand is no longer dominated by the public sector, or professionals – although these sectors remain important – but now comes evenly from several business sectors including shipping, media and creative, the financial services sector and call centres. There is also evidence that smaller businesses are growing into new office space. 2012 saw 61 deals, up from 44 in 2011, with more than two-thirds taking suites of between 1,000 and 5,000 sq ft. The year was notable for the lack of a single larger transaction over 30,000 sq ft. In 2012 the largest single letting was 22,500 sq ft, compared to 94,000 sq ft in 2011.
Combining the central business district, city fringe and out-of-town markets reveals total Liverpool City Region office market take-up in 2012 was 534,730 sq ft, a jump of 40% compared with 2011. The total represents a substantial gearshift for the City Region's office market, and for its economy compared with the previous two years. The total of 511,238 sq ft compares with 382,592 sq ft in 2011 and the broadly similar 393,441 sq ft of 2010.
Total city fringe office take-up in 2012 was 65,928, up 30% on 2011. The network of historic terraces and modern conversions close to the city centre has long been popular with Liverpool's creative, media and digital sector whose strong return to growth in 2012 after a pause in 2011 has driven demand in the city fringe. Creative media and digital industries have generally accounted for between one fifth and one third of the total annual take-up in the city fringe, but have now accelerated to 37% of the city fringe office take-up as the sector matures. This return to rapid growth now means creative, media and digital take-up easily eclipses the professional services sector 12% as the area's largest single source of demand for office space. The professional sector accounted for just 12% take-up in 2012 compared to 26.9% of take up in 2011. However, it is now clear that 2011 represented an unusually active year for professionals, both in the city fringe and in the city centre. Professional take-up in the city fringe 2012 was broadly similar to that in 2010 (7,852 sq ft in 2012, compared to 7,058 sq ft in 2010) and this probably represents baseline demand.
Demand for suites in Liverpool's out-of-town office markets staged an impressive recovery in 2012. Office take-up in the business parks of North and South Liverpool, Wavertree, and Knowsley, and in the more mixed markets of St Helens and Bootle/Waterloo, totalled 209,200 sq ft, substantially up on the 131,000 sq ft recorded in both 2009 and 2010, and cruising ahead of the modest 63,684 sq ft recorded in 2011. Greater flexibility from landlords, and realism from tenants, has helped boost performance after the shock delivered by a poor out-of-town performance in 2011. As usual the popular Wavertree sub market [which includes Liverpool Innovation Park] proved itself the most resilient and best equipped to achieve growth, turning 2011's 19,504 sq ft take-up into 109,506 sq ft in 2012. Growth in this submarket was driven by the resurgence of the creative, media and digital sector, which accounted for 34% of Wavertree's take-up in 2012. A surprising return to the market by the public sector also helped boost take-up in Wavertree. Public sector take-up in Wavertree in 2012 was 32,888 sq ft, or 30% of total. South Liverpool and Knowsley both saw expansion in 2012, with the creative, media and digital sector making a perhaps surprising break into South Liverpool's business parks taking 8,072 sq ft and the public sector making a powerful return in the Knowsley market as Merseycare signed up for 34,500 sq ft.
The report was compiled by members of the property group of Professional Liverpool: Keppie Massie, Edward Symmons, GVA, Jones Lang LaSalle, CBRE, Mason Owen and Matthews & Goodman.
- View the report in full here at the Liverpool Vision website