Liverpool is experiencing a boom in commercial property investments, with CBRE’s North West team playing a key role in several of the city’s most recent and high-profile transactions, including the sales of the iconic Royal Liver Building and the Grade 11 Listed, Exchange Flags development.
The global property experts highlight Liverpool’s emergence as a hot spot for property investment, which over the past 18 months has seen major assets changing hands in deals totalling more than £300m.
A recent and pivotal transaction was the sale of the iconic Royal Liver Building in February this year. CBRE advised on the sale, the very first time in the building’s history, attracting global investor interest before selling at £48 million to property giant Corestate, 30% in excess of the quoting price. The Grade I Listed building, owned by the Royal London Mutual Insurance Society, was put on the market for £40m in October.
Victoria Hill, Regional Director at CBRE’s Debt & Structured Finance division explains that securing debt for such transactions is now increasingly achievable. “As recently as a year ago, there would have been fewer lenders and terms would have been more conservative as it was a large lot size for the City. However, the City now has robust demand and supply dynamics for lending, and this transaction has put Liverpool firmly on the map..”
Victoria adds, “It was a privilege to work with such an experienced borrower and to share our expertise in the domestic debt market for their debut UK investment.”
Corestate’s decision to invest in Liverpool shows its confidence in the city’s economy – and has sparked a wave of interest from other global investors. As the UK’s fourth largest city, Liverpool boasts a young and highly educated population, thanks to having one of the highest student retention rates in the UK. The city is also home to more than 500,000 businesses within one and a half hours of the city centre.
In CBRE’s recent research study on the Creative Regions, Liverpool ranked highly for the quality of its universities, from both a teaching and research perspective. It’s also a city expected to see above average rates of growth in employment within the creative industries. The city also fared well in CBRE’s Law in The Region’s study in 2016, where it is was one of four key cities that formed a second tier of legal centres outside the capital, alongside Edinburgh, Glasgow and Leeds.
CBRE also acted for Hudson Advisors on the £45million sale of Exchange Flags offices and are currently advising the Knowledge Quarter Partnership, Liverpool’s largest proposed development project.
CBRE’s Building Consultancy team has worked across all Three Graces, including Cunard Building and the former offices of Mersey Docks and Harbour Board. The team has been instrumental in the preservation of the Royal Liver Building over the past 10 years having provided strategic advice, designed and project managed significant conservation projects in addition to providing strategic investment advice.
The Building team is currently providing conservation and building survey advice, design and project management in connection with a significant external refurbishment of the RLB’s neighbouring property, the Grade II* Listed Tower Buildings, which was also designed by the architect, Walter Aubrey Thomas, responsible for the RLB.
A major extension to Liverpool’s “Knowledge Quarter” could see investments totaling almost £1bn, according to the city’s Mayor. The area is part of Joe Anderson’s “Mayoral Development Zones”*
The Mayor is also hugely supportive of Everton Football Club in respect of a new city-centre stadium, tipped to be a transformational project on the waterfront. CBRE is part of Everton Football Club’s advisory team on the much-anticipated scheme.
Neil Kirkham, Director of CBRE’s Office Agency team, comments:
“CBRE has transacted approximately £250m worth of property across Liverpool and Merseyside in the past two years. It is an exciting time to live and work here, as illustrated by our pipeline of projects. Interest from Investors and occupiers have reached unprecedented levels in recent times, a reflection of the significant rental growth potential due to the lack of supply and the excellent demographic and economic factors to retain and attract talent”
CBRE’s Office Agency team has completed more than 165,000 sq ft of deals in the central business district over the last 12 months with more than 48% of market on floor area. More than 76 deals were done, equating to 63.87% of deals done in the City.
Out of town, CBRE has completed 136,416 sq ft of deals, including the largest acquisition in the market for Kura at Caspian House, Atlantic Park, totalling 34,983 sq ft. 30 out of town deals were completed overall, which account for almost half of total deals (47.5%) transacted.
The Liverpool team also completed the largest central business district arms length letting in 2016 at 22,572 sq ft to Armstrong Solicitors in The Plaza. The team was retained on key city centre assets, including Royal Liver Building, 4 St Paul’s Street, The Plaza, India Buildings, Watson Building, One Derby Square and 43 Castle Street.
Acquisitions totalling 177,000 sq ft were completed in the last year for Pershing Bank of New York, HP, Regus, HSBC, Cable & Wireless, Lloyds Register of Shipping, Hitsearch and KURA and the team actively sought accommodation for RCP, Alder Hey, The Football Pools, Sportspesa, Asics, Barclays, Wood Group and Lloyds Banking Group.
John Dunlop, Director of CBRE’s National Land & Development team, adds:
“Liverpool struggled to attract the same institutional interest as other regional centres in the early stages of the current residential cycle; so it’s exciting to see it become a hot investment area and play a part in its progress. Over the past 12 to 18 months, we’ve been involved in many high profile residential projects, including the pre-sale of Promenade Developments, Baltic Triangle residential scheme to Hermes-Countrywide JV, Vista. This represents the largest residential transaction in Liverpool City Centre this decade.”
The National Land and Development team in Liverpool has also been instrumental in key deals across the City, including selling the freehold interest and leasehold investment in King’s Dock Mill to Grainger for a client of Investec and putting Liverpool University’s Dale Hall campus in Mossley Hill under offer for residential development.
The team was also instructed by Sportech to dispose of its current offices in Walton and advised the business on its move to City Centre office space. Your Exclusive Developments instructed the team to source funding and JV partners hired the team for their development portfolio in the Baltic Triangle. A forward funding partner was also secured for MODA Living’s residential development at Liverpool Waters.
Liverpool continues to thrive and realise its billing as the next big property hot spot, with the city becoming a prime target for savvy developers and attracting significant inward investment. The city has also benefited this year from the election of a new metro mayor, putting is alongside only a handful of other UK cities (including Birmingham, Manchester and London), that will benefit from strategic management of resources across the wider city region.
