Liverpool Council set to unlock £55m Pall Mall project

Liverpool Council is looking to invest £15m to help kick off the development of a grade A office scheme in the heart of the city’s commercial business district. The council-owned site was remediated in 2020 via funding from the Liverpool City Region Combined Authority. Kier Property was selected as development partner to bring forward the proposed three office buildings and a hotel, surrounded by green space. The project has gross development value of £55m. However, the delivery of the first phase of the project has been delayed due to viability issues and the post-pandemic drop in office demand. Hence, a report to the council’s cabinet, which will meet next month, is recommending that phase one of the Pall Mall scheme, comprising a consented 111,500 sq ft office with a new 1.2-acre urban park, be financially supported. If approved, the scheme would open by summer 2028, marking the first grade-A office development in the city’s business district for 16 years. The eight-storey building would be energy efficient, with the developer aiming for the development to become the first operationally net-zero office building in the Liverpool City Region, with a view to it achieving BREEAM Excellent and EPC A ratings. The report also proposes the Council uses its covenant strength as owner of the site to provide a rent guarantee for 15 years on any unlet space to help improve development value. This agreement would require Kier to secure pre-lets against a similar 15-year term for a minimum 40% of the building to help project viability. If fully let before completion in June 2028, the guarantee will fall away. Office rents in Liverpool are currently the second lowest among the UK’s core cities, at £29 per sq ft. Nick Small, cabinet member for growth and development at Liverpool City Council, said: “We need to address the office supply and commercial rent catch Liverpool has found itself in. Demand is now rising following the post-pandemic slump and we need to take advantage of that by unlocking supply.” Leigh Thomas, group managing director at Kier Property, said: “The steps being proposed to address the viability challenge are both positive and necessary. As development partner, we remain committed to regenerating the Pall Mall site and look forward to continuing to work with the council team as we seek to bring forward the first phase of this priority scheme.” Image: Liverpool Council