Property agents say Liverpool still needs to build more premium office space to attract national and international companies – even as they remain upbeat about the city’s prospects for 2025.
The latest report from the Liverpool Office Agents Forum (LOAF) showed office space transactions in 2024 totalled 318,479 sq ft – up 12.5% on the 283,799 sq ft acquired the previous year. The central business district showed particularly strong demand. In Q4 of 2024, 21 deals were completed in the city centre, totalling 103,318 sq ft.
The year’s biggest acquisition was in Q4, when insurer Acorn Group bought the Grade I Listed Atlantic Pavilion at the Royal Albert Dock. Also in Q4, Direct Line Insurance bought the fourth floor at 1 St Paul’s Square, totalling 16,964 sq ft, while Your Legal secured 6,060 sq ft of offices at No 8 Princes Dock.
Tim Garnett, chair of LOAF, said: “The underlying numbers demonstrate a robust commercial market within Liverpool’s central business district. Take-up has increased from 2023 and the number of transactions taking place is arguably greater than before the pandemic.
“We are not without challenges in the marketplace, but fundamentals in Liverpool are strong. As a city we must be able to offer opportunities to large inward investors and employers, who are footloose across the regions. It is critical therefore that we see a push for improved supply, specifically in the heart of the Commercial District.
“As a forum, we are predicting a positive 2025, with several large requirements due to land. However, this will not continue in the long term if do not come to fruition soon. Ready-to-occupy supply remains less than 500,000 sq ft and this is dispersed throughout the city and is of mixed quality.”
The proposed Pall Mall office scheme secured planning permission in 2019 but .
Adam Fleming, surveyor at LOAF member Fisher German, said that while he and other agents remained upbeat, there were still fears about the lack of new builds.
He said: “Following a strong Q4 of 2024, we are expecting a number of deals in the pipeline in Q1 of 2025, which should boost market confidence as the financial year end approaches.
“However, within Liverpool City Centre the story remains the same, with a lack of high-quality office space expected to limit large-scale transactions throughout the year.
“We expect headline rents to continue to strengthen, however, until we begin to see new supply in the city, refurbishment schemes will continue to represent the highest quality space available.
“New build schemes such as Pall Mall have stalled, and until we begin to develop and build top quality developments as seen in Manchester, Birmingham and London, we are never going to realise the rental levels that these cities enjoy.
“There needs to be additional premium office space to entice national and international businesses as well as aid the growth of regional companies.
“The figures throughout 2024 were a marked improvement from 2023, with large deals underlining that there remains a demand in Liverpool City Centre for good quality space. Hopefully this trend will continue to translate into even more positive transactions.
“The Acorn Group’s acquisition is an exciting landmark deal, and a prime example of an expanding, locally based business securing a major site for owner-occupier use, which should act as a catalyst for the market.”
LOAF is made up of representatives from 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.
Mr Fleming said sectors that remained strong in Liverpool city centre included professional services and the creative industries. He said: “The professional services sector continued to grow in 2024, and these types of businesses are seeking flagship accommodation for their staff.
“The creative sector continued to flourish in 2024, with notable deals including Wushu Studios Ltd acquiring 13,220 sq ft and Sentric Music Ltd taking 13,000 sq ft, both at Walker House. We hope to see the demand from this sector continue into 2025.
“Having office buildings with stylish interiors and strong ESG credentials are now top of occupier wish lists as more and more employees are starting to return to the office in a hybrid or flexible capacity.
“While hybrid and flexible working persists, the demand for modern high-quality offices is increasing as more employers want their staff to have the best quality working environment if they expect them to be in the office. This demand needs to be met in Liverpool City Centre.”
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