Liverpool’s office market is poised for a stronger second half of 2025, and there is optimism growing, with the city’s biggest new-build office scheme in over a decade now looking to be set in motion.
The £15 million grant funding for the Pall Mall development alongside Liverpool City Council’s proposal for a 15-year rent guarantee on any unlet space has injected confidence into the market.
The scheme will deliver 111,000 sq ft of Grade A workspace, the first of its kind in Liverpool’s Central Business District (CBD) for 16 years.
Adam Fleming, Surveyor at Fisher German’s Liverpool office, described the project as transformational.
He said: “The Pall Mall development has been in the pipeline for years, so to see it moving forward is a huge boost.
“It will push headline rents up, attract quality occupiers, and extend the CBD northwards. It’s a catalyst not just for office space, but for wider regeneration alongside major projects like the new Everton stadium.
“The Everton stadium is a world-class development and this, combined with the ambitious proposals for the Liverpool Waters scheme, inspires confidence for growth of the city in future years. The Pall Mall development will be a huge step towards this growth, once it gets off the ground.
“What we do need to consider is, given the length of time which has passed since the Pall Mall project was designed, do the developers need to reassess the project specification to reflect modern workspace requirements to ensure our latest Grade A space is not outdated? As a city, we want to ensure that the best in class buildings are at the forefront of regeneration.
“The market is already showing signs of renewed momentum for the remainder of 2025.
“We’re aware of several bigger transactions in the pipeline. If these land in Q3 and Q4, they’ll set the tone for the market going into 2026. The challenge is still the lack of good quality space, but Pall Mall will go a long way to addressing that.”
Figures released by the Liverpool Office Agents Forum (LOAF), which is made up of commercial property agents across the city, reveal that city centre take-up in the first half of 2025 totalled 87,915 sq ft across 30 deals which was lower than the 119,784 sq ft in the same period last year, reflecting the shortage of Grade A stock.
Q1 was muted at 36,325 sq ft, but included one of the city’s most significant lettings in recent years: Kyndryl UK Limited took 15,413 sq ft at the Royal Liver Building for its new AI hub, setting a record rent of £29.50 per sq ft.
Q2 improved to 51,590 sq ft, with Liverpool John Moores University’s 24,360 sq ft lease at City Square signalling confidence in the market.
Adam believes momentum will build with demand for flexible, smaller offices, and landmark deals in the first half of the year proving occupiers will pay a premium for quality which is a trend that is expected to continue for the second-half of 2025.
He added: “It has been the case for the past couple of years that most deals are for smaller, agile, flexible space which shows that occupiers’ requirements have changed.
“It’s great to see large transactions in the city completing, especially with new overseas occupiers acquiring space, and there are still large requirements circulating in the market for high quality larger spaces.
“Unfortunately, at the moment, there just isn’t the supply to meet this demand. As a result of this, the majority of deals within Liverpool are let to occupiers who want smaller, flexible office space which Liverpool can offer because, largely, the highest quality stock in the city is refurbished and of smaller sizes.
“We have advised landlords that if they want to minimise void rates in their buildings that they need to offer high quality, flexible workspace of differing sizes.
“The fundamentals are there because demand is strong, interest is healthy, and the city is still attracting big-name occupiers. If the larger deals that are being tracked are completed than the remainder of 2025 could outperform expectations.
“With the Pall Mall scheme on track, regeneration to the north of the city centre, and an active pipeline of lettings, Liverpool’s office market is entering the second half of the year with renewed optimism and the prospect of a much stronger finish to 2025.”
LOAF members include Fisher German, CBRE, Avison Young, Worthington Owen, Mason Owen, Keppie Massie, Mason Partners, Eddisons, Hitchcock Wright & Partners, LM6, SK Real Estate, and B1 Real Estate.