Leading property consultancy Fisher German has warned that Liverpool City Centre’s office market remains “constricted”, with limited Grade A accommodation continuing to hold back occupier movement.
A total of 97,606 sq ft of office accommodation was let in 22 deals in Liverpool City Centre in Q3, almost double the 51,590 sq ft that occurred during Q2.
This brings the total for the year to 185,521 sq ft, slightly below the 205,851 sq ft let at the same time last year.
While a number of deals are expected to complete in the final quarter of the year, there is much work to do to match Liverpool City Centre’s 2024 take-up of 318,479 sq ft.
The figures have been released by the Liverpool Office Agents Forum (LOAF), which is made up of commercial property agents across the city.
Adam Fleming, Surveyor at Fisher German which has an office in Tithebarn Street in Liverpool, said that while enquiries have picked up in recent months, many businesses remain reluctant to relocate due to a shortage of high-quality, energy-efficient space that meets modern expectations.
“The market has been constrained for some time,” he added. “Although activity has increased slightly towards the end of the financial year, businesses are broadly staying put because there isn’t enough high-quality stock to make relocation worthwhile.
“If there were more premium, ready-to-occupy suites available, we would see far greater movement and a much more dynamic market.
“Nothing is really being built. We are aware that there are a number of older office blocks which may be coming to the market, but realistically, due to changing market demands, these are likely to be purchased for alternative use such as conversions into student accommodation, residential or hotels.
“The build costs associated with good specification office accommodation just do not stack when you look at the achieved office rents across the city.
“Landlords are having to invest heavily to attract tenants. But for many older buildings, floorplate constrictions, older M&E, building services and design make the cost to landlords restrictive.
“As a result, there is a lot of very average grade stock in the city. The knock-on effect of this is, with top specification space and ESG requirements high on occupiers’ wish lists, many tenants do not see the benefit in moving from their current space unless that level of stock is readily available.”
Despite these challenges, the figures show there is growing demand for smaller, high-quality office suites and Fisher German is currently advising a number of landlords on refurbishments aimed at delivering fully fitted, design-led spaces for the sub-2,000 sq ft market.
In Q3, 55 per cent of transactions were below 2,000 sq ft. Only one deal exceeded 20,000 sq ft, while headline rents peaked at £25 per sq ft, below the £29.50 per sq ft achieved earlier in the year at the Royal Liver Building.
Adam believes that new developments such as the Pall Mall scheme could act as catalysts for rental growth and future inward investment.
He said: “The Pall Mall scheme is obviously a huge development on the horizon and is due to be delivered in the coming years, but in the interim, landlords must invest in their own stock if they wish to attract occupiers.
“In 2026, we expect that it will be more of the same, the take-up dominated by small sized deals of second-hand refurbished stock, with the occasional larger transaction boosting the figures.”
Caption: Adam Fleming, Surveyor at Fisher German in Liverpool