Rising grade A rents could kick-start Liverpool’s office space development pipeline by the end of this year, property experts believe.
A combination of diminishing space and growing demand from professional services firms is likely to push the headline rent for grade A accommodation past its current level of £21.50 per sq ft, making it more attractive for developers and investors.
Neil Kirkham, director of agents CBRE in Liverpool and Andrew Owen of Worthington Owen are reporting sharp increase in demand for space in the city.
As joint agents for No 4 St Paul’s Square, in the heart of the city’s central business district, they have secured a raft of lettings in recent months, including to property consultancy Gleeds, wealth manager Pavis and, most recently, planning consultancy Pegasus.
No 4 St Paul’s is some of the only remaining grade A space in the central business district and both professionals believe there are enough current requirements in the market to push up headline rents.
On the radar
The arrival in the city of London-based leading international law firm Taylor Wessing, which is due to secure a significant presence at a location yet to be decided, is further evidence of Liverpool’s growing appeal as an inward investment destination.
“We are busier than we have been in a long time with the number of enquires now coming in. The arrival of national and international firms like Taylor Wessing, The Royal College of Physicians and Seadrill, means Liverpool is clearly on the radar of blue chip firms inside and outside the city region.
“In the last couple of years we have seen secondary office space around the Water Street/Tithebarn Street area converted for residential or leisure use, further diminishing supply. Investors really are seeing this diminishing supply as a fantastic opportunity to secure a position in Liverpool and benefit from the predicted rental growth, which in turn, could herald the start of a new era of development.”
Most likely sites for development are buildings at Princes Dock, part of Peel’s Liverpool Waters scheme, which has planning consent for an eight-storey office building comprising 80,000 sq ft of office space, and Pall Mall, where Kier, CTP and the city council are looking to develop 400,000 sq ft of space behind Exchange Station.
“Liverpool offers an attractive proposition to potential occupiers with lower costs and a great quality of life compared to other cities, a key factor in the rise in the number of enquiries we are seeing.
“We now have a brilliant mix of tenants at No 4 St Paul’s Square, a real hub of growth and innovation, and people want to be part of that. We are confident we will be making more announcements in the coming months.
“With that demand showing now signs of abating it would be no surprise to see the headline rents rise later in the year.”