This Chinese-backed development has only just got under way, yet is already being heavily marketed in Hong Kong. Liverpool’s mayor says the £200m project will create much-need jobs – but what else will it bring to the city?
The glossy brochure on display at the property fair in Hong Kong leaves little doubt about where the new wave of Chinese investors should put their money.
Liverpool, it says, has the UK’s fastest growing economy outside London, and the £200m New Chinatown project – which only began construction in April – is described in the accompanying online blurb as “one of the most important and exciting developments in the UK today”.
Due for completion in 2019, it is, apparently, “the burgeoning energy and dynamism of modern China transplanted into the heart of an historic world heritage city. This is an historic moment … a unique investment opportunity.”
Units in the New Chinatown development – located on Great George Street, “beneath the majesty of Liverpool’s magnificent Anglican Cathedral” – are being marketed at property fairs in China and Hong Kong as “Xinhua Bu” (New China Wharf in Mandarin) for prices up to £546,000.
The project includes residential, commercial and retail space, and would-be investors are told of the urban regeneration that is sweeping the region, the UK government’s plans for this “northern powerhouse”, the buoyant housing market, the 10,000 Chinese students currently studying in Liverpool – and, of course, the Beatles (the Cavern Club is only a mile down the road).
“We are creating an entirely new kind of Chinatown,” says the website. “A home for Chinese businesses to establish themselves in the UK with characteristic retail bazaars and vibrant sunken streets. New Chinatown will be an exciting, colourful and dynamic destination, and an utterly unique shopping experience.”
From his office in Liverpool’s Albert Dock, Simon Clarke, sales director for the UK developers behind the project North Point Global, says the international sales pitch seems to be working.
Of the first wave of the 790 studios, apartments and town houses to be built, 50% have apparently been snapped up “off plan” – many by investors in China and the far east.
“We are very pleased,” Clarke says. “We have had interest from a mixture of people: local people and people from China, Hong Kong, Singapore and the Middle East.”
Like many across the region, the project has been partly financed by investors from China and Hong Kong as well as UK backers. North Point Global is involved in two more similar ventures in Liverpool.
“We have got a couple of other projects like this – and one, building student accommodation, has already sold out completely,” Clarke says, adding that many of those units have been bought by investors from China and Hong Kong.
Liverpool’s New Chinatown project is among the latest in a wave of foreign-backed development that has seen billions of pounds flood into the UK’s northern cities in recent months – much of it into the property market.
Earlier this year, Sheffield announced a multi-billion pound deal that would initially see four or five city-centre projects – including housing – over the next three years and create “hundreds if not thousands” of jobs in south Yorkshire. Manchester has seen hundreds of millions of pounds of Chinese investment in the past 12 months, and it is a similar story elsewhere.
Civic leaders have welcomed this influx of cash – and the foreign property investors that often follow. According to the mayor of Liverpool, Joe Anderson, the city has “not even come close to realising its potential. That’s why I am excited by the opportunities foreign investment is bringing – whether it’s transforming empty buildings into hotels or leisure developments, or redeveloping dockland which has lain derelict for decades.”
In London’s overheated property market, the influx of investors looking to make a killing buying properties off plan (then often leaving them empty) is blamed for contributing to spiralling housing costs. The capital’s mayor, Sadiq Khan, this week announced an inquiry to assess the scale and impact of the surge in foreign property investors.
But so far, most city leaders in the north do not see this as a key issue. As Anderson says: “The bottom line is that the New Chinatown development means the creation of much-needed jobs in our city.”
Others see trouble ahead if new homes outside London are marketed primarily as investment opportunities. Shadow housing minister Teresa Pearce says the scale of foreign investment in towns and cities outside London risks pricing local people out of the housing market.
“Foreign investors buying up properties in London has been a cause for concern for some time,” Pearce says, “and it’s worrying to see it spread to other parts of the country. After the Brexit vote, the drop in sterling’s value has led to even more overseas investors rushing to pick up property in the UK.”
According to the Royal Institution of Chartered Surveyors, while residential property prices fell in London over the last three months, there was a rise during the same period in the north-west.
“We need to look at how other countries have tackled this,” adds Pearce. “We are fast becoming a real-life Monopoly board, with those saving to buy and on housing waiting-lists the losers in this game.”