Muse reaffirms start on site date at St Paul’s phase three

Muse Developments is confident of starting on site with construction of the third and final office building at St Paul's Square in Liverpool city centre in spring next year.

The 140,000 sq ft building, costing around £20m to build, requires grant assistance given today's uncertain market. An application has been with the North West Development Agency for several months.

The third phase of the successful scheme is eagerly anticipated to prevent a drought of new offices in the city centre, a key factor in maintaining its economic momentum.

Matt Crompton, joint managing director of Muse, said: "A decision to approve is expected from the NWDA and Government Office before Christmas. After that it depends how quickly we can document it [in legal contracts].

"If I were a betting man I would say we would be on site towards the end of the first quarter of 2009, around March or April."

Liverpool faces a lack of Grade A office supply without St Paul's. The city has plenty of quality refurbished space – Downing's The Capital, Bruntwood's portfolio, UK Land & Property and Pochin's Exchange Flags – but little new stock. Only the remaining half of the second office building at St Paul's, of 133,000 sq ft, and Rumford's 20 Chapel Street offer significant new space to the market.

Crompton added: "If Liverpool is going to move on it can't continue to be a market that can only supply good quality refurbishment."

On both the first phase of St Paul's, let to law firm Hill Dickinson, and the second, multilet to Edward Symmons, DWF, Bank of Scotland, Muse was able to return or not draw down the grants on offer due to prelets and investment sales achieved. Crompton hopes the same will apply.

ECF is a joint venture between Muse, English Partnerships and Legal & General.

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