Andy Delaney, director and head of the Liverpool office of global real estate advisors Colliers International, reviews the current state of the Liverpool commercial property market:
1. How is the Liverpool commercial market faring currently? (ie. what are current supply and demand levels and rent trends like etc?)
Liverpool’s commercial property market hinges on its economy. 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.
2. How do you think the Liverpool commercial market will fare over the next few years? What factors or significant new property schemes do you think will affect it?
I think it will be a period of continued growth. When developed, the new office scheme at Pall Mall will enable the city to compete for inward investment opportunities again, 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.
3. Do you think the North Point Developments/New China Town ‘situation’ has affected investor sentiment in Liverpool or not – and why/why not?
Recent high-profile examples of failure, such as China Town, lead to negative press. If too many schemes fail, there is a real risk of reputational damage to the city, but this 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.
