Grosvenor is intent on transforming Liverpool into a magnet for shoppers with its hotly trailed Liverpool One scheme. After phase one’s opening last week, Ben Cooper says it has every chance

Property developer Grosvenor does not do things in small measures. Taking on a scheme to rejuvenate a huge chunk of one of Britain’s biggest and once most vibrant city centres was never going to be an easy task, but the first phase is now open.

In the planning stage of Liverpool One alone, 20 different architects designed 30 different buildings, but turning that vision into a reality and delivering the scheme on time was another matter altogether.

The result is a vastly improved city centre linked to perhaps Liverpool’s most inspiring landmark: the docks. Grosvenor has put together an attractive retail offer – which includes brands ranging from John Lewis to G-Star – that is likely to lift Liverpool’s position in UK retail from the second tier to a top-table fixture.

Inevitably for a scheme of this scale, there have been problems along the way and the inauspicious trading environment that it is emerging cast a shadow over last week’s phase one opening. But the lasting benefits of Grosvenor’s scheme to Liverpool and the Northwest could nonetheless be priceless.

If Liverpool One has a key aim, it is to usher in a new era for a city that had fallen from glory. For years, it has been losing shoppers to the more attractive offers of Manchester and Chester and the city as a whole has suffered.

Liverpool One’s job is to stem the outflow and bring the scousers back to their city centre. And, judging by the 200,000 people at last week’s opening – which was preceded by a visit from the Queen and Prince Philip the previous week – this might just be achievable.

“I’ve never seen Liverpool city centre so busy,” says Grosvenor head of retail leasing Neil Barber. “The best thing about last week’s opening for us was seeing that there were lots of people who hadn’t been into the city centre for a while. There’s a lot of catchment and a lot of wealth out there and, until now, they’ve been going elsewhere.”

Grosvenor was given the nod to develop Liverpool One six years ago and it is only four years since the compulsory purchase order came through. On paper, 1 million sq ft (92,900 sq m) of retail space coming onto the market is impressive, especially given the speed with which the project has been completed, but this only really tells half the story.

Liverpool One is much more than a shopping centre development. In 1999, Liverpool City Council was thinking big. To carry out its plans to rejuvenate the woefully underperforming and partly derelict 42 acres (15 ha) of land between the city’s retail centre and the docks, it needed a developer that could think on the same scale. Grosvenor’s application struck a chord with the council, which wanted to move away from the more one-dimensional, covered shopping centre format that other developers had suggested.

Tearing up the foundations

But a project designed to transcend the typical shopping centre development does not happen in a heartbeat. Before the first bricks on the main project could be laid, Grosvenor had a sizeable to-do list to take care of, including funding and overseeing the relocation of the BBC Liverpool headquarters, an NCP car park, a bus station and a fire station, all of which had to be demolished.

The complexities of the plans were a huge consideration, as Liverpool One project director Rod Holmes explains. “This is about city building, not just building a shopping centre,” he says. “It’s a retail build, but it’s linked to existing streets. We really tried to get under the skin of the city and, to make this investment work, we’ve had to become a big part of the life of Liverpool. It’s a two-way thing.”

In order to deliver the council’s vision as well as giving Liverpool a major retail transformation, the developer had to think about the big picture and long term throughout. The key attraction for the council was Grosvenor’s conception of an uncovered retail space that brought shoppers flowing through existing streets, simultaneously bringing a wealth of retail and extending the city.

“There are advantages to covered shopping malls, but there are also big problems. You sterilise a big part of the city, whereas this is more fluid because a building can be redeveloped in isolation,” Holmes says. “As an investment, it makes it more flexible and it will improve footfall, because people don’t have to make a conscious decision to come in. It just adds to existing habits.”

The new retail space spans South John Street and the western side of Paradise Street and comes in addition to 2,500 car parking spaces. The centre’s anchors John Lewis and Debenhams opened their doors last week, as did about 40 other retailers. While there were some notable fit-outs still in progress during the opening, including those of HMV and WHSmith, about 90 per cent of the units in the first phase were let, if not open.

The completion of the first phase of Liverpool One has brought a fresh impetus for retailers to come into a city that has failed to draw in the kind of big names that might be expected. More than 50 per cent of the retailers that have signed for space are new to Liverpool, including niche brands Pull and Bear (Retail Week, last week), American Apparel, and L’Occitane.

American Apparel has been hungry for space in Liverpool for years, but until now the city did not have enough space on offer. American Apparel UK director Brent Chase explains: “People seem pretty hyped up. They’ve been waiting for an American Apparel in Liverpool and we’ve been wanting to come in for over two years, but spaces were pretty scant back then.”

But, while last week’s opening was clearly a success, the development has not been without controversy entirely. In April, Liverpool One hit the headlines for all the wrong reasons after Debenhams launched legal action against Grosvenor over a dispute concerning the opening date (Retail Week, April 18).

Debenhams is seeking damages that could amount to£1 million after claiming that the actual opening date for phase one was agreed as March 31. While the matter has yet to be resolved, Grosvenor issued a statement after Debenhams launched action, confirming the opening date was in May and claiming that the date of March 31 had been given to Debenhams in error.

Double blow

At the same time, it also came to light that Grosvenor had been forced to make a second provision of£48.8 million on the scheme after a drop in capital value, despite record results last year, when pre-tax profits rose 3 per cent to£542 million.

Now that the scheme is up and running, the only potential black cloud on the horizon might come in the form of the 600 apartments that will open next spring.

The growth of city-centre living in Liverpool has gone from a trickle to a flood in the past decade. In 2002, there were 9,000 people living in the L1 postal district, a figure expected to leap to 30,000 by 2010. The danger now is that supply has outstripped demand, especially given the dicey conditions in the wider property market.

“There probably is an over-supply of housing in the city centre,” says Grosvenor senior development manager Guy Butler. “But we feel that we have a stronger offer than other residential schemes. Ours is the only apartment building with a waterfront view.”

While nobody could have foreseen the present retail climate when Liverpool One was conceived, it has now become a real concern for developers involved with mixed-use schemes incorporating residential builds and Liverpool is no exception. Grosvenor will have to be flexible in the coming months if it is to maximise the potential of having shoppers from 600 apartments on its retail tenants’ doorsteps.

When Grosvenor chairman Lord Home spoke at the opening, he said: “Today means the start of making Liverpool what it once was.” In retail terms, the opening of Liverpool One is a tangible landmark on the route to that goal. The retail offering that is now on show and the promise of more to come should help the council and Grosvenor staunch the outflow of shoppers from the city.

Doubtless, Grosvenor could have done without the vacant units on opening day and the various headaches that preceded it, but the scheme is nonetheless an impressive achievement.

And with a catchment of 4.7 million, according to Grosvenor, it is about time someone took the initiative to improve Liverpool’s retail offer. There is plenty still to be done to prepare for September’s phase two opening, but so far, so good.