Liverpool city region’s £2bn investment fund will help kick-start the delayed transformation of the Grade II-listed Martins Bank Building and the commercial district’s first grade A office space for 15 years at Pall Mall. Tony McDonough reports
Liverpool city region’s £2bn investment fund is set to create more than 520,000 sq ft of office, laboratory and light industrial space.
It will help kick-start two delayed Liverpool city centre office projects – the Grade II-listed Martins Bank Building in Water Street and Pall Mall which offer the first grade A office space in the commercial district for 15 years.
City region Mayor Steve Rotheram announced the £2bn fund at the MIPIM property expo in Cannes in March. On Wednesday at UKREiiF, the British version of MIPIM, Chancellor Rachel Reeves announced Government backing for the projects.
They will also include two industrial developments in St Helens, a laboratory development in Runcorn and a light industrial scheme in Liverpool.
A further two projects are more advanced – with funding already approved for Sci-Tech Daresbury’s Project Violet Phase 2.
And hi-tech lab and office development Hemisphere ONE, in Knowledge Quarter Liverpool, is in line for Investment Fund support subject to approval of a full business case.
Located in Water Street, adjacent to Liverpool Town Hall, the Grade II-listed Martins Bank has been unused for more than a decade. In August 2021 a project to bring the building back to life as an office complex, focused on smaller businesses, was announced.
But the scheme stalled when its owner, London property investor Karrev, was unable to agree a price with appointed contractor Lendlease after the discovery of asbestos looked likely to mean the refurbishment would be less straightforward than originally thought.
In March, Karrev managing director Julien Buronfosse said work on the 210,000 sq ft building could be finally about to begin this year and be complete in 2028. The firm has already spent £11m on asbestos removal and strip-out work.
It is also good news for the long-planned Pall Mall office scheme in Liverpool’s commercial district. Liverpool City Council has already pledged £15m to support the development that would offer 111,500 sq ft of office and commercial space.
This was due to go ahead before COVID with a pre-let from BT but the communications giant pulled out following the pandemic as it reviewed its office needs. This new project would cost £55m.
Key to speculative development is headline rents. Developers and investors won’t take the risk unless they can see good returns. In recent years Liverpool’s headline rent has been seen as too low to kick-start new schemes.
State gap funding enabled the St Paul’s office scheme to go ahead 15 years ago and investment from this new fund will offer the commercial district much needed supply of grade A space.
Steve Rotheram said: “For too long, regions like ours have been expected to transform local economies with short-term funding and one hand tied behind our back.
“This £2bn Investment Fund is about changing that, giving us the ability to really back ourselves, think long-term and invest in the projects that can genuinely change people’s lives.
“We’ll use it to unlock new opportunities, bring private investment into our communities and support the homes, jobs and inclusive growth that our region needs.”
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The £2bn Investment Fund has been created by the Liverpool City Region Combined Authority in collaboration with government and public and private sector partners and is designed to accelerate economic growth.
Bringing together new and existing public funding into a single investment pot, it will help unlock stalled sites, accelerate regeneration and attract billions of pounds more in private and institutional investment.
Days after its launch it was bolstered by £95m from the Government’s City Investment Funds, which is designed to strengthen investor confidence in Liverpool and accelerate the city centre’s regeneration pipeline.