Investors set their sights on Merseyside: ThePost.ie


TCH Archives > Sunday Business Post > 2004/02/01 > Investors set their sights on Merseyside

Investors set their sights on Merseyside
Sunday, February 01, 2004
By Neil Callanan
It is one of the ironies of the last decade that at a time when property prices are rising substantially, the government is g iving ta x incentives to developers, investors and in some instances owner-occupiers to build and purchase new homes in certain areas. On Merseyside in England, things are somewhat different. A partnership approach between local businesses, local authorities and public bodies has begun to rejuvenate the area and these efforts culminated last year when Liverpool was nominated as European City of Culture for 2008.

Tom O'Brien, chief executive of the Merseyside Partnership,was inDublinlast week to promote the city as a tourism destination and to highlight the increased interestbeing shown inthe area by Irish property developers.

O'Brien describes the partnership as a localised version of the IDA.

"Merseyside covers Liverpool and the surrounding area - it's a similar size to Dublin, with 1.5 million people and six local authorities," he said.

He believes that Liverpool's selection as European City of Culture will significantly boost its profile - it has been predicted that the designation will create 14,000 jobs and boost visitor numbers by 1.7 million. An indep e nde nt study by ERM Economics also forecast a €3 billion investment bonanza for the city.

The win has already had an impact on the city's property market. O'Brien said the announcement meant that Grosvenor Estates found it easier to get financing for its €1.08 billion redevelopment of an area stretching from the Paradise shopping district to the Pierhead on the Mersey. The council-backed plan had been opposed by some existing traders.

The area will now be rebuilt to provide 92,900 square metres of new retail space as well as new streets, public squares, leisure amenities and residential development. Work on the project is getting underway now.

Irish interest in property in the city is also increasing. "There is a lot of interest in Liverpool from the Irish prop er ty world," s aid O'Brien.

"Last year we held a series of briefing sessions in association with the Dubl in Chamber of Commerce and the property session was three times oversubscribed."

Pierse Homes is already involved in the city, having developed 69 apartments at the listed Tower Building on Water Stre et. The P re m Group also owns serviced apartments off Dale Street while McInerney's British operation has long concentrated on the north-west of England.

O'Brien believes there are opportunities in commercial, light industrial and residential property for investors.

Even as far back as 2001, The Guardian described the number of Irish buyers in Liverpool as "helping to transform a down-at-heel city into a millionaires' playground".

Two-bedroom apartments on the waterfront cost from about €153,000. The population of inner city Liverpool has grown from 3,000 to 11,000 over the last five years and is expected to reach 18,000 by the end of the decade. Prices have risen as a result. A compact onebedroom flat in Canning in the city centre, for example, is on the market for €138,529 yet needs a good deal of modernisation. Two years ago, it would have made €72,400. However, yields for residential investors remain better than in London.

Although it has a corporate basis, the Merseyside Partnership is a not for profit company which is owned and managed by over 100 partners including Jaguar, Royal & Sun Alliance, Royal Liver and Unilever. Accountancy firms, banks and public agencies are also involved.

There are three main strands to its business - investment, tourism and economic development, involving the promotion of the city's expansion.

The partnership has an annual budget of €8.67 million which is spent on activities such as servicing investment enquiries, tourist information, consulting with industry groups and marketing.

A Liverpudlian with Irish roots, O'Brien has dual nationality. Having worked with KPMG and the Treasury in Britain, he then worked for the World Bank in Washington and easter n Europe supervising regional growth projects.

He joined the Merseyside Partnership in autumn 2001, just as the September 11 attacks were impacting on an already wobbling world economy.

While he describes that period as a struggle, O'Brien believes that the Merseyside economy is now on an upward curve.

While concern has been expressed in Ireland about the threat to jobs from low cost economies in EU accession States, O'Brien feels the partnership system in operation in Liverpool lessens the risks.

"I wouldn't say we're fearful but we're not complacent," he said.

"We will work with existing companies in the area to ensure we understand their pressures and needs. At the same time, we want to move further up the value chain."

O'Brien points to Liverpool's experience with call centres as an example of how the city is weathering the storm.

While some call centre firms have begun moving to India to lower their wage bills, employment is still rising in the sector in Liverpool.

For example Arvato, a wholly-owned subsidiary of Bertelsmann, opened in Liverpool in 2001 with 80 jobs.

The company now intends to grow its numbers to 800 because of the availability of staff with European and Middle Eastern languages.

Liverpool is home to Jaguar and General Motors but O'Brien says the workforces have responded to cost challenges to remain competitive.

"It is probably the leanest, most productive plant within Ford - as a result Ford is going to build the Freelander here from 2005," he said.

The averag e an nual growth in income per head in Liverpool between 1995 and2001was 6.3per cent and unemployment in Merseyside fell one percentage point to 4.5 per cent. Job growth in Merseyside be-tween 1998 and 2002 was 10.9 per cent, the fastest pace in England according to the Office for National Statistics.

Much of the talk in the city is now centering around proposals for new stadiums for both Everton and Liverpool football clubs.

"We want a new stadium facility by 2007. Liverpool's financing is already in place and this should help rejuvenate the Anfield area," said O'Brien, adding that Everton's proposals are less concrete.