Latest quarterly ‘Big Nine’ office survey from Avison Young shows take up of space in Liverpool city centre in the second quarter of 2024 was 66% below the 10-year average. Tony McDonough reports

Martins Bank Building in Water Street is awaiting its refurbishment. Picture by Tony McDonough

Liverpool’s city centre office market is continuing to struggle with a fall in lettings and little sign of any grade A space coming onto the market.

According to the latest quarterly Big Nine office survey from Avison Young, which assesses the top nine markets outside of London, Liverpool saw just under 37,000 sq ft of transactions during the second quarter of 2024 – 66% below the 10-year Q2 average.

Notable deals were Bespoke’s 5,187 sq ft lease at Exchange Station, Moore & Smalley’s 4,133 sq ft lease at Exchange Station and Elite Realty Invest’s 2,468 sq ft lease at Cotton Exchange.

Leading sectors for lettings over the past four quarters were tech, media and communications, creative, professional and government services. Together they accounted for 85% of total take-up during that period.

For the past few years the city has seen a sharp fall in the availability of grade A or high quality refurbished office space in the central business district (CBD).

There has been no significant volumes of grade A space brought onto the market since the completion of the St Paul’s Square development more than a decade ago.

A key issue in Liverpool is headline rents. This figure matters to funders of office schemes because it offers a measure of a return on investment. If headline rents are too low then there is little incentive to build speculatively.

Liverpool’s headline rent is £28.50 per sq ft. This is 12% higher than the previous quarter but it remains the second lowest in the Big Nine.

Only Cardiff is lower at £25 per sq ft and Liverpool remains well behind Manchester (£44 per sq ft), Leeds (£38 per sq ft), Edinburgh (£45 per sq ft) and Bristol (£48 per sq ft).

According to Avison Young the space availability rate decreased to 5.1%, 50 basis points lower than this time last year. Premium quality space remains undersupplied with the grade A vacancy rate now at 0.1%.

Exchange Station in Tithebarn Street saw letting activity in Q2. Picture by Tony McDonough

According to the Big Nine report a total of 13,650 sq ft of refurbished space has been completed so far in 2024. It also reports a total of 153,106 sq ft speculative space undergoing refurbishment.

This includes 50,000 sq ft at No. 1 St Paul’s Square, 8,106 sq ft at No 12 Princes Dock, and 95,000 sq ft at The Martins Bank Building. However, big question marks remain over the Martins Bank project, for which Avision Young is an agent.

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Originally due for completion in late 2024, apart from some work to remove asbestos from the Grade II-listed Water Street site, the project proper has yet to start, with one of the original joint venture partners, Kinrise, now out of the picture.

Martins Bank has been empty since 2009. In 2021 the building was acquired by Karrev, a London-based property investor with a French connection, with developer Kinrise as its junior partner on the project.

However, in February it was revealed that Kinrise was no longer involved in the project and holds no stake in the building. Most recent update on the scheme suggests a start date of early 2026 but there has been no announcement so far from Karrev.