City centre office take-up in both Liverpool and Manchester was well below average in Q2 as markets continued to be hit by the coronavirus crisis, new data from Avison Young has revealed.
Figures from the latest Big Nine report has revealed that take-up in Liverpool was just 20,00sq ft in Liverpool in the second quarter, while Manchester was 209,000sq ft.
The figures from the report covering the nine major cities outside of London, were all well below the quarterly averages, with Avison Young executives blaming the lack of movement on the "significant impact" of Covid-19.
Despite that, out-of-town take-up saw an increase in both cities.
Liverpool
In Liverpool, the largest deal in the city was law firm Taylor Wessing, taking 12,700 sq ft at Edward Pavilion.
In contrast, the out-of-town markets experienced a slight increase in demand in comparison to the previous quarter, with viewing activity picking up in the second half of the quarter.
As a consequence, there were several small lettings in the out-of-town market totaling 15,000 sq ft in locations such as Wavertree and South Liverpool.
Ian Steele, principal in Avison Young’s Liverpool office, said: “Like all cities across the Big Nine report, Covid-19 has had a significant impact on the city centre office market, with the majority of occupiers either delaying or putting their occupational requirements on hold indefinitely, whilst undertaking a strategic review and reassessment of their spatial requirements.
Most Read
“On a more positive note, following the easing of the lockdown restrictions, there has been an increase in demand and viewing activity from smaller occupiers who are generally looking to acquire space on more flexible short-term leases.
"Despite this, we expect take-up levels will continue to be restricted in Q3, with many of the larger occupiers adopting a more cautious approach.”
Elsewhere in Liverpool, The Spine at Paddington Village is currently under construction and when completed in Q4, will provide 160,000 sq ft of quality office space, of which 50% has been pre-let to the Royal College of Physicians as its new northern home.
Manchester
There was 209,000 sq ft of take-up in Manchester.
Of the 26 deals that transacted, five were over 10,000 sq ft and the two largest were in the out of town market.
These were USDAW taking 38,900 sq ft at Voyager in an owner occupier sale of £12m and Marlowe Fire & Security taking 25,568 sq ft at 5 Central Park.
Out-of-town take-up increased from Q1, though total take-up was down 53% from the previous quarter while being far below the 10-year quarterly average.
Don’t miss
Don't miss a thing - sign up for your free North West newsletter - and follow us on LinkedIn
Email newsletters
BusinessLive is your home for business news from around the North West- and you can stay in touch with all the latest news from Greater Manchester, Liverpool City Region, Cheshire, Lancashire and Cumbria through our email alerts.
You can sign up to receive daily morning news bulletins from every region we cover and to weekly email bulletins covering key economic sectors from manufacturing to technology and enterprise. And we'll send out breaking news alerts for any stories we think you can't miss.
Visit our email preference centre to sign up to all the latest news from BusinessLive.
For all the latest stories, views, polls and more - and the news as it breaks - .
The largest city centre deal was Trusted Mortgages taking 14,200 sq ft at Cardinal House.
There were four other city centre deals above 5,000 sq ft involving firms from the legal, computing and insurance sectors as well as Ashfield Health taking 9,100 sq ft at City Tower.
A smaller deal of interest was Simplisafe taking 2,400 sq ft at Bauhaus on Quay Street for an eye catching £37.50 psf.
Manchester city centre has 1.5m sq ft of space under construction at the moment.
Of this, 46% is already pre-let including all of the 307,000 sq ft being built at Enterprise City.
While a number of schemes’ completion dates have been pushed back, there are large amounts of available space due to complete in Q4 at No. 1 and No. 2 Circle Square by developer Bruntwood Estates as well as at 100 Embankment.
An Avison Young spokesperson added: "The Covid-19 pandemic has yet to test headline rental levels with any downward pressure. As a result, city centre rents remain at £36.50 psf with a 24 month rent free period while out of town rents remain at £24.00 psf.