Liverpool's financial and business services sector will see almost 7,000 new jobs being created over the next five years, underpinning continued demand for offices, according to a new report by Knight Frank.
The Spring 2008 Liverpool Market Activity Report, which was being launched today at a breakfast event at the company's Horton House offices in Exchange Flags also claimed that the city's commercial property market should escape the negative impact of the credit crunch, with the banking and finance sector continuing to drive demand for office space in the city.
According to the report, the office rental market will remain strong – a claim that was emphasised by the announcement that Regus, the largest provider of serviced office space in the world, is to open its first operation in the city at Horton House – with headline office rents in the city expected to rise by £23/sq ft by the end of the year.
The report says: "Financial and Business Services will see continued growth, with nearly 7,000 new jobs forecast to be created in the next five years. The banking and insurance sub-sector is expected to experience one of the fastest rates of employment growth, of 11.4%, in the same period."
Looking back at the 'healthy' city centre office market in 2007 it continues: "Unlike in previous years, take-up has not been driven by Government acquisitions.
"Rather, it has been underpinned by the banking and finance sector, with stockbrokers and investment managers both moving into and around the city, and banks moving administration functions to higher quality space."
Examples include Deloitte taking 6,230 sq ft at Horton House, the Bank of Ireland acquiring 6,400 sq ft at Chapel Street and HBOS signing up for approximately 11,430 sq ft at St Paul's Square last month.
Claire Higgins, head of commercial research at Knight Frank and author of the report, said: "Although, looking forward, there are concerns relating to the impact of the difficulties being more recently experienced by the financial markets and the possibility of an economic slowdown, this has not yet been reflected by the occupational market, which has followed a healthy 2007 with a strong start to this year."
The demand for Grade A space in the city centre means that little is left currently available, although there is a strong development pipeline, while the rejuvenation and return to commercial use of the city centre's key historic buildings has had a 'significant impact' on the profile of the market, according to the report.
It highlights UK Land & Property and construction group Pochin's £20m refurbishment programme at Exchange Flags, which has 'acted as a catalyst for the renaissance of the central business district' and Bruntwood's regeneration plans for No1 Dale Street.
Charles Ardern, partner and head of Knight Frank's Liverpool office, said: "This report endorses our belief that the city's occupational market remains healthy, with traditional occupiers still requiring space.
"Looking ahead, the arrival of Regus is a major boost and should underpin future demand by accommodating developing businesses and companies that are new to Liverpool and can test the waters in the city."