The heavy discounting of space and lack of belief in the market are seriously harming office development prospects in the city, a Forum for the Built Environment event was told.
The office market needs a radical overhaul if the city is to lift take-up out of the doldrums of recent years, according to panellists on the FBE's Liverpool Developers' debate last week attended by 100 people at No 4 St Paul's Square.
Steve Parry, managing director of Neptune Developments, said: "The Liverpool office market needs a major review. No-one believes in the market here. Agents and landlords are too ready to discount."
Parry added: "The market is bad. Agents need to up-sell. Most end users are naïve here and don't move often. As long as the model of heavy discounting where buildings that should be £20/sq ft are going for £12/sq ft with a three-year rent-free period on a five-year lease, the market is dead."
Phil Mayall, development director of Muse Developments, added that in many Liverpool occupiers' minds Grades A and B had merged; new quality space and second-hand older stock were considered at the same time. The market needs to mature in Liverpool to succeed, he continued.
David Sayer, director at GVA in Liverpool, chairing the debate, agreed and said that "a lot of the time Liverpool doesn't get on the list" of potential locations during nationwide office searches conducted on behalf of inward investors.
Take-up in Liverpool has been low in the past five years, between 200,000 sq ft and 300,000 sq ft, since the large public sector deals that propped up the city's market ceased.
However, Tim Heatley, director of Capital & Centric, on site with 40,000 sq ft of offices at 12 Tithebarn Street, said deals can be done, and he chose to "close the doors to the noise outside and just build a good building and do deals".
The FBE event was held in the ground floor of English Cities Fund's No 4 St Paul's Square, where the PlaceEXPO property pavilion for the UK's International Festival for Business will be based during June and July. See further details here.