Wirral Council has announced it is in advanced discussions with a prospective tenant for a major, currently vacant office block within its £75 million Birkenhead development. This news arrives as the local authority grapples with significant budget pressures and warnings of escalating costs.
A Costly Vacancy in the Commercial District
The update concerns the Birkenhead Commercial District (BCD), a two-building office scheme completed in 2023 at Alice Ker Square. The project was forward-funded by Canada Life Ltd, with the council committed to repaying the investment over a 35-year period. While the Mallory building is partially occupied by the council itself, the Irvine building remains entirely empty.
Original plans anticipated the council generating revenue by leasing out the space, but no new commercial tenants have been secured since the local authority moved in. To cover the ongoing costs, millions of pounds in profits from the Wirral Growth Company, a council joint venture, have been utilised, including a £1 million diversion earlier this year.
Financial Risks and a Potential Breakthrough
The financial structure of the deal presents a long-term challenge. A report to councillors explained that the investor, Canada Life, benefits from rent increases tied to an index like the Consumer Prices Index (CPI). However, the council's income depends on the terms it can secure in the open property market. The report warned that "towards the end of any transaction like this there is a risk that more rent is paid out than is received."
The potential letting of the Irvine building is therefore critical. It would provide essential rental income to offset the scheme's costs. Councillors are being asked on December 17 to grant interim chief executive Matthew Bennett the authority to negotiate and finalise a sub-lease with the interested party.
A Vote of Confidence for Birkenhead's Future
Despite the financial complexities, council leaders maintain the development is a high-quality asset that will revitalise the town centre. Council officers described the BCD as "unique and exceptional in the local market," offering premium office space close to town centre amenities and among the best new offices in the North West.
Council Leader Councillor Paula Basnett hailed the advanced talks as "momentous news for Birkenhead and the town centre and a real vote of confidence in its future." She added that attracting a major company would have a huge impact, boosting footfall for local traders and generating rental income to help support frontline council services. "It is still early days," she cautioned, "but when we are able to make further announcements we will do so."
