Liverpool’s office market is at a critical point – it needs a push to get the momentum going
Andy Delaney, director and head of the Liverpool office of global real estate advisors Colliers International gives his take on the current health of Liverpool’s commercial market
Liverpool’s commercial office market is at something of a crossroads right now – but with the right support it can be a major driver of growth for the city over the next few years.
The city’s jobs market is in reasonable shape but there are areas of under-performance which are holding us back. If Liverpool could secure some of the footloose office-based jobs that seem to be migrating almost exclusively to Manchester then this would give the market a real boost.
At the moment, the values aren’t there to encourage speculative development of the offices these modern occupiers demand, so we need local authorities that will provide help in the shape of things like rental guarantees to kick-start new office construction. Otherwise, those jobs will keep heading down the M62.
The economic fundamentals nationally remain positive and Liverpool’s economy has grown largely in line with its competitor cities, so the market should continue to grow and perform well.
One of the key projects that could unlock the city’s potential is the proposed office scheme for Pall Mall which would bring 400,000 sq ft of grade A space to the market and will enable the city to compete for inward investment opportunities again.
It is also clear that the continued growth of the tech sector will generate new businesses and space requirements. Knowledge Quarter Liverpool is already seeing new development coming out of the ground and this is only going to go one way as the location matures.
The industrial and logistics market has fared well in recent times. The continued growth of Jaguar Land Rover at Halewood, the new Mersey Gateway and the new terminal at the port will all drive demand over the next five years.
There is also a question whether high-profile development failures, such as the New Chinatown scheme, has dented investor confidence and caused reputational damage to Liverpool?
If that is the case then it is only for a certain section of the market – fractional sales to overseas investors. The good news is that Liverpool is now on the radar of UK Pension funds.
They see that the Liverpool city region has the fundamental pillars in place for continued growth in in future years. Such pillars are workforce and skills, infrastructure, business environment, place, city brand and housing.