Liverpool´s Economy Booms and Pulls in Investors

This article supports the great property deals we have recently released in Liverpool.

Both national and international investors are flocking to Liverpool, as the European City of Culture (2008) reveals plans to boost its multi-million gross added value (GVA) to the billions by 2020. This trend is based upon two main factors:

A trend of ongoing regeneration and economic investment since 2003.
A continuously-booming student population, with the area’s universities specialising in education for professionals and creating a stream of industry-ready graduates.

As the city’s economic and business development generates more jobs, a higher majority of graduating students are taking work in the city and surrounding areas. This, in turn, has the knock-on effect of:

Boosting the city’s economy further, thus attracting more investment.
Pushing up the demand for both student accommodation and residential accommodation.

With flats in the north typically delivering a 7% to 10% rental yield net per year, buy-to-let investors are snapping up student developments and HMOs as soon as they come onto the market.

So why Liverpool?

Liverpool, Merseyside, is the fourth largest city in the UK, with a larger urban area population of over 800,000. As the sixth most visited destination in the UK, Liverpool is already generating £1.3 billion in tourism alone and boasts one of the largest economies in the UK at nearly £8,000 million.

Regeneration

Historically gaining its status as a major port, the city has seen £4 billion invested in regeneration and renewing the city’s infrastructure since 2003. Property developer Grosvenor also invested £920 million in the Paradise Project - a development starting in 2004, which involved significant changes to the city centre since the post-war construction.

Liverpool Chamber of Commerce has also been successful in pushing through a bill to create an Innovation Park to combine business and education. This new Business Neighbourhood Frontrunners scheme has paved the way for an education campus, and will create amenities to attract business and expand existing facilities.

Mark Tock, innovation manager for the park, says: “It will bring shared amenities for businesses and will be great in terms of giving training and developing young people as potential employees.”

Education

Liverpool is one of the biggest student cities in the UK, with a student population of over 50,000. There are a number of leading colleges and universities in Liverpool, including: the University of Liverpool; John Moores University; Liverpool Hope University College; Edge Hill University College; Liverpool Community College; City of Liverpool Community College; and more.

Founded in 1881, the University of Liverpool is perhaps the best known, with an impressive history of pioneering education and research. The University of Liverpool is seen as a centre of excellence in disciplines including engineering, medicine, dentistry, business and law. It has produced eight Nobel Prize winners, welcomes students from over 100 countries around the world and has a turnover of £340 million.

Economy

Liverpool’s economy is one of the largest within the UK. Much of Liverpool’s economy comes from tourism, with the European Capital of Culture celebrations bringing in £188 million alone and tourism trade standing at £1.3 billion.

The popularity of The Beatles and other groups from the Merseybeat era contributes to Liverpool’s status as a major tourist destination. Liverpool is also well known for its glorious maritime history, two of the Premiership’s biggest football teams and two majestic cathedrals; in addition to being in the top five UK retail destinations.

Trade also comes from service sector industries (public administration, education, health, banking, finance and insurance), along with shipping and car manufacture at the Halewood plant (e.g. Jaguar X-Type and Land Rover Freelander). The Liverpool Waters project (redevelopment of the city’s northern dock system) is expected to see a further £5.5 billion invested in the city, along with creating 17,000 new jobs).

European business relocation

One of Europe’s leading solar energy groups is set to invest in Liverpool, as part of the City Region’s Low Carbon Economy. German-owned Solen Energy Ltd is opening its second UK base close to Liverpool John Lennon Airport and will be working closely with The Mersey Partnership (TMP).

Lorraine Rogers, chief executive for TMP, praised Solen’s track record for developing business once established in an area. She comments: “By investing in Liverpool, Solen Energy has recognised the opportunities available to Low Carbon Economy businesses choosing to locate here.”

Frank Schulmann, director of Solen, says he is “delighted” with the move. Schulmann comments: “We are committed to contribute our knowledge and experience to the Merseyside region. We will be working with local people and intend to stay in the Merseyside region to ensure long-term relationships with our customers.”

Growth, productivity and re-balancing the economy

Liverpool City Region’s Q1 2011 economic report also reveals further growth, with improvement in levels of education attainment, rises in levels of business start-ups, declining levels of unemployment and a booming working age-population.

Action plans across a variety of business sectors look set to create a further boost to the job market in Liverpool and TMP forecasts “the potential to create over 128,000 jobs in the next 10 years. This compares to 50,600 jobs created from 1999 to 2008.”

TMP chair, Rod Holmes, adds: “Liverpool City Region’s rate of growth is improving. Our economic objectives, in order to achieve others, are: growth; productivity and re-balancing the economy.”

Commenting on the plans, Professor Sir Howard Newby, vice chancellor of the University of Liverpool, says: “It represents an exciting opportunity for the City Region to pull together and drive its economy forward to the benefit of all those who live and work here.”

Liverpool City Region’s Visitor Economy Strategy to 2020 sets out how the sector can create an additional 55,000 jobs to generate an economic impact of £4.2 billion by 2020.

What does this mean for investors?

In the words of Professor Sir Howard Newby, it represents an exciting opportunity. Investing in Liverpool property now means you will be locking in profit from future growth, plus taking early advantage of the high-demand rental market.

As previously mentioned in this article, student accommodation and HMO property are the two most popular, high-yielding types of investment in the Liverpool area.

Next Steps

Axis clients can benefit from these Liverpool property investment opportunities
If you want more information about these deals or any other property deals on our website call amazing deals, so call us right away to speak to our Portfolio Manager Russell Bonner on +44(0)1237 447307
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