Merseyside’s property market appears to be thriving and this may be due to significant investments from America. Property website Datscha has stated that investment in commercial property in Liverpool was up by a significant 13% in the first 11 months of 2018 compared to 2017. Their research also showed that a lot of this growth within the commercial property field was in fact driven by American firms purchasing housing developments within Merseyside, with investors buying properties in Liverpool worth a massive £835 million up until November 2018 compared to £739 million in 2017.
When comparing these transatlantic investment figures to numbers produced by internal investment it produces some interesting figures. The amount invested by UK buyers fell from £491 million to £361 million; however, the amount invested by overseas parties rose from £146 million in 2017 to £361 million in 2018, with the rest of the £112 million hailing from private offshore funds. Datscha states that the largest total of foreign investment came from US funds, springing from £15 million invested in 2017 to £156 million in 2018, which is an extremely significant increase over just one year. Datscha also conveyed that through their ‘transaction module’, which measures large commercial property deals worth more than £3 million each, that investment in commercial property in Liverpool rose much faster than in Manchester which year on year possesses an investment volume of 4%.
In October 2018, Barings Real Estate, one of the world’s largest diversified real estate investment managers, purchased The Keel housing development in Liverpool’s Queens Dock for £46.75 million. The former HMRC office building turned property venture with 240 apartments was the firm’s first entry into the UK’s private rented sector market and was purchased from Moorfield Group. The acquisition also includes an adjacent plot of land which is also available for private rented sector development and acts as part of the company’s pan-European core investment strategy on behalf of institutional investors. Darren Hutchinson, Managing Director of the UK Real Estate Transactions at Barings states that ‘this transaction presents a rare opportunity to acquire a well located operating PRS asset in an iconic building on Liverpool’s riverside.’ He also went on to say how ‘Barings believes the UK PRS sector, and the regional mid-market sector in particular, is at the beginning of a period of sustained growth’ and that with their existing experience in managing and investing in properties in the US; ‘The Keel is a great start to [their] strong ambitions to expand that expertise to the UK.’
Another example of American investment in Liverpool’s property market took place in September 2018. Heitman, a Chicago based global real estate investment management firm with $41.7 billion in assets under management and over 50 years worth of experience, invested in two upcoming housing developments in Liverpool and Manchester, including a 200-apartment scheme in the Baltic Triangle. The property on Blundell Street is part of Heitman’s first step into the UK’s build-to-rent market. Tony Smedley, Heitman’s Managing Director, has stated that he is ‘delighted’ that the company has expanded into Liverpool’s residential property market. He also went on to say how ‘the purchase is consistent with our strategy of investing in under-supplied sectors, growing urban environments and amenity rich schemes that also provide a sense of community’ and that the build-to-rent sector in the North West offers ‘an attractive combination of stability and growth.’
Overall, Lesley Males, Datscha’s Head of Research, says that ‘Liverpool has performed well as a regional city over the past 12 months’ and that it is ‘encouraging to see overseas investment at a time when the market is slowing down ahead of the UK’s departure from the EU’ which truly demonstrates ‘the city’s value to foreign investors.’ It will be exciting to see the relationship between foreign investment and Liverpool’s property market develop over the next few years and to witness how this will impact the evolution of the city and property jobs in Liverpool.
Written by Rachael Gray.
Rachael Gray is a Director at Clifton Gray specialist property recruitment company. Rachael has recruited within the residential property industry for fifteen years. Follow Rachael on linkedin or email rachael@cliftongray.co.uk to discuss current Liverpool and Manchester property jobs, or to find out how Clifton Gray can secure the best talent for your property business.