A report to the Council’s Cabinet is recommending that phase one of the Pall Mall scheme be financially supported and, if approved, the £55m development – consisting of an 8-storey office with a new urban park – would open by summer 2028.

With the Council’s backing it would make the scheme the first Grade A office development in the city’s business district in 16 years.

Pall Mall also sits within the proposed area for the Locally Led Development Corporation where the Council, working with MHCLG, are looking to create an accelerated development zone, the implementation of which will be overseen by the recently appointed Imagine Liverpool regeneration partnership board.

Subject to approval from MHCLG, funds from the city’s Strategic Futures programme, which covers an area from Bramley Moore Dock to Paddington Village, will be used to help bring forward the Pall Mall scheme.

The Council-owned site was remediated in 2020, via funding from the Liverpool City Region Combined Authority, and a masterplan developed proposing three office buildings and a hotel surrounding a high quality new green space.

Phase one has however been delayed due to viability issues and the post-pandemic drop in office demand, a challenge shared with most UK core cities.

Liverpool City Council views the investment as critical to stimulating the remaining phases of the scheme as well as the city’s office supply. Only 5% of high-quality office stock is now available in Liverpool and progressing Pall Mall is seen as a key building block to re-establishing viable headline rent levels.

Kier Property Developments Ltd are the appointed developer and have gained planning consent for phase one to deliver 111,500 sq ft of office space, including ground floor retail units, and a 0.5 hectare green space.

The building would be highly energy efficient, with the developer targeting it 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.

Office rent levels in Liverpool are currently the second lowest amongst the UK’s core cities, at £29 per sq ft compared to £41.50 in Glasgow and £48.40 in Bristol.

However, there has now been considerable movement in Liverpool’s office sector with demand notably rising. In 2024, 62% of all city lettings were in Grade A/B* buildings and with limited supply in the pipeline, the Council is intervening to build on the recent ‘flight-to-quality’ trend from occupiers.

The Cabinet report, which will be discussed on Tuesday, 4 June, 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 initial occupiers (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.

Councillor Nick Small, Liverpool City Council’s Cabinet member for Growth and Development, said:

“This proposed investment would not just bring forward a top-quality Grade A office scheme and a new urban park in our business district, it will act as a catalyst to stimulate investor confidence in the city.

“We need to address the office supply and commercial rent catch-22 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.

“The Pall Mall scheme is oven-ready and could be open for business within three years, helping Liverpool to retain and attract major companies. Our Strategic Futures programme was designed exactly for the purpose of oiling the wheels of economic growth, which is exactly what this development would do.”

Leigh Thomas, Group managing director of Kier Property, said:

“Liverpool City Council has been a staunch advocate for the Pall Mall scheme and the report outlines our joint recognition that there is an acute need for highly sustainable new grade A office space that meets the needs of the modern workforce.

“The steps being proposed to address the viability challenge are both very positive and necessary. As development partner, we remain fully 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.”