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Shipping and digital sectors could hold key to our post-Brexit prosperity

Andrew Owen, from Worthington Owen, joint agent at 4 St Paul's Square, talks about how Liverpool can grow its economy in a post-Brexit world. Brexit isn’t a threat, it’s an opportunity. So the mantra goes. Some people in business believe it… others are closing their eyes and praying it is true.

Government is little help right now. Mixed messages and confusion emanate from Number 10 and Whitehall. The road map is yet to be drawn. However, in business, standing still is not an option. Here in the Liverpool city region we were already facing big conundrums even before the EU Referendum result.

Grade A grumbles
In the city centre commercial district the big issue is the lack of grade A space. With the exception of the high quality accommodation on offer at 4 St Paul’s Square and 20 Chapel Street, the pipeline is running dry.
Liverpool’s office market saw record take-up figures of 340,000 sq ft in the third quarter of 2017. But this was skewed by the 270,000 sq ft deal signed by HMRC at India Buildings in Water Street.

And while the movement of occupiers within the city - the churn - trundles along ok, attracting major occupiers from outside the city without the space to offer them is now a serious problem.

Rents too low
The key issue here is headline rents. For the past year Liverpool commercial district’s headline rent has remained steady at £21.50 per sq ft - too low to attract speculative development. Earlier this year, one of the city’s best known commercial agents, Stuart Keppie, stated rents would have to hit £25 per sq ft before new development would happen.

There are real possibilities both at Pall Mall and Princes Dock but spades in the ground still seem some way off.
The one bright spot is the rent-free periods being offered to new occupiers have dropped from 33 months to 24 months over the past year. But progress is painfully slow. Pre-let agreements are one way in which development could get started. So what sectors might these occupiers come from?

When the boat comes in
In terms of post-Brexit Peel’s Liverpool2 deep-water container terminal offers genuine potential to attract more occupiers in the maritime and logistics sector.Pro-Brex it cheerleaders have been licking their lips at the prospect of a new trade deal with the US, despite fears of President Donald Trump’s protectionist instincts. For the first time in decades, the Port of Liverpool could be facing in the right direction.

Digital Transformation
And then we have the phenomenal growth of the digital and creative sector, now worth an estimated £1bn a year to the Liverpool city region. Thoughts immediately turn to the success of the Baltic Triangle district, just south of the city centre, where more than 400 businesses are now based.

But what many don’t realise is that a significant number of smaller occupiers in the central business district are also from this sector - and that number is growing.

In recent weeks Liverpool City Region Metro Mayor, Steve Rotheram, has talked about creating a spur from the Hibernia Link, a transatlantic data cable which comes ashore at Southport, and linking it with the Hartree supercomputer at Daresbury.

This would allow us, he claims, to create superfast digital connectivity across the city region and in turn make us an attractive proposition to the giants of the digital world. If that came to pass it would be truly transformational for the city region economy.