The outlook for employment in the city is positive, with 6,000 jobs expected to be added during the course of the year – bringing the number in employment to 286,000 – a record for the city. Over 1,800 of these roles are forecast to be office-type jobs, and accommodation and food services is predicted to see around 1,000 new posts created.

The city may be coming off the back of a challenging year – after the city council scandal and the decision to strip the city of its UNESCO heritage label - but Liverpool ended the year on a positive note, with the launch of the Pandemic Institute and hosting the final G7 summit of the UK’s presidency, not to mention the announcement of £22m government funding for Liverpool’s waterfront.

There is a significant amount of high-profile demand from quasi-office occupiers, set to capitalise on The Pandemic Institute committed to the city during 2021, while the Royal College of Physicians moved into The Spine during the year. Further office and lab space at Paddington Village is earmarked, with HEMISPHERE, the first net zero carbon office building in the city set to commence on site in Summer 2022. The building will feature 116,000 sq ft of grade A office space for health, education, science and tech occupiers The Hill.

Pre-letting activity would likely be required to facilitate new development in the city either at Princes Dock or Pall Mall which would be the first new buildings in the city centre since 2011. Elsewhere, Kinrise are looking to redevelop the 210,000 sq ft Martin’s Bank for office use, although this is unlikely to be completed until 2024. Otherwise, refurbishments will provide the quality stock sought by occupiers.

Despite its excellent offer, the city’s retail offering is much larger than other comparable cities, and vacancy is upwards of 15% across the city centre. Although Zone A and average rents have seen falls during the course of the year – with a number of lease expiries in Liverpool One affecting values, we expect average rents to stabilise in the city during the course of 2022. New store openings in Liverpool include a Decathlon town centre offer, with Frasers taking the former Tesco for a seven storey Flannels.

We will continue to see significant repurposing of retail space with Knowsley and Sefton both in the process of repurposing much of their shopping centre offer. In the city, Liverpool Media Academy have acquired 50,000 sq ft of what was previously first floor retail space. The former Debenhams is likely, at the time of writing, to be repositioned to a leisure offering, while the old Lewis’s building is also being looked at as the potential home of an exciting new leisure concept. The leisure sector in the city is becoming more diverse, with the Cains Brewery and the Baltic Triangle the focus of activity. Box Park are rumoured to be looking at the city.

Liverpool’s strategic location has made it a natural choice to become one of England’s freeport regions. Handling approximately 45% of the country's trade with North America, the freeport site, between Wirral Waters and Port Salford, will allow imports to enter the country with less stringent procedures and a reduction in payable tariffs. This will continue to drive new sources of occupier demand.

The outlook for Liverpool’s PBSA sector is not entirely straightforward. Despite the strong foundation of the city’s excellent higher education sector and ongoing investment in the Knowledge Quarter, investor sentiment has suffered as a result of some high-profile stalled schemes. There are concerns around development in marginal locations and there is likely to be more distress in 2022. Having said this, because of the positive underlying demand picture, quality assets and development opportunities should see strong investor interest.