In the last few days the city council’s cabinet has approved the JV with CTP, Kier Property, the development arm of Kier Group but a major question remains over how it will be funded. Tony McDonough reports
A joint venture between Liverpool City Council and developer Kier has been established to deliver the Pall Mall commercial scheme – but there are as yet no details on how the £200m scheme will be funded.
In the last few days the council’s cabinet has approved the JV with CTP, Kier Property, the development arm of Kier Group.
Grade A space
Central to the project in Liverpool’s commercial district is 400,000 sq ft of much-needed grade A office space, as well as associated leisure, retail and landscaped public realm.
Liverpool’s city centre grade A pipeline has dried up. The only remaining space of grade A quality now left in the central office core is at No 4 St Paul’s Square and 20 Chapel Street. Add to that the fact that around 1m sq ft of office space has been lost to residential/leisure conversion in the past two years.
Headline rent for office space in the commercial district is currently £21.50 per sq ft, considered too low to offer developers an incentive to build speculatively, unless a pre-let agreement is secured with a tenant.
Steady supply
In terms of headline rents Liverpool is currently bottom of GVA’s ‘Big Nine’ league table – the top nine regional office markets outside London. The city is a long way behind Manchester at £33.50 per sq ft and the number one – Edinburgh – at £34 per sq ft.
A steady supply of grade A space is essential for any city that wants to attract blue chip occupiers from elsewhere in the UK and overseas. More occupiers means more jobs, greater business density and more revenue for the city via business rates.
First phase
Pall Mall is a 1.6 ha site to the rear of Exchange Station. A planning submission is expected to be made in late spring 2018, and subject to approval, the developers are then expected to start on site on the first phase of the masterplan, which will be the regeneration of the Pall Mall NCP car park area.
However, there is still no detail on how the scheme will be financed. If the JV cannot secure a pre-let then the question arises will the council step in an underwrite the scheme in some way. LBN understands all options are being considered but there is as yet no commitment from the council on this.
Job creation
Mayor of Liverpool Joe Anderson, said: “Job creation is critical to any successful city which is why schemes like Pall Mall are so important. We know we need more top quality office accommodation in Liverpool to attract blue chip companies and Pall Mall is in the perfect location as a natural expansion to our commercial district.”
Tom Gilman, managing director (North) Kier Property, added: “Next steps will be to conclude legal agreements before submitting a planning application following the consultations that we carried out last year with the public and Places Matter.