GUEST ARTICLE: When is the right time to invest in a regeneration area?

When – and where – to invest in a regeneration area is a question that can have significant financial implications. According to Simon Clarke, Director of independent property service Acentus Real Estate, both the timing and the location of an investment need careful consideration.

Simon commented: “Knowing when to invest is just as important as knowing where. Urban regeneration schemes can take decades to complete and not all investors want to wait that long to realise fully the profits of their investment.

“That’s why it’s key to look at each particular regeneration area in detail, to understand the varying factors at play and to consider the kind of development that is likely to reap the most rewards when it comes to capital growth.”

Liverpool is a case in point. The city is currently home to £14 billion worth of investment opportunities, with significant regeneration schemes changing the shape of multiple areas at once.

Clarke recommends identifying investment opportunities that benefit from the work taking place in multiple regeneration zones, all with varying timescales.

That way, the investor can realise a profit even if they withdraw their investment before work in each of the zones is complete, as the impact of the various works should still combine to drive up property prices in the area of overlap.

An example of this in action is The Metalworks in Liverpool. The 319 luxurious apartments are on the next road along from the commercial business district regeneration zone, facing directly into it.

Regeneration work there is currently in the consultation phase but is expected to continue for some 15-20 years. The Metalworks is also on the edge of the 60-hectare Liverpool Waters regeneration area, which got the green light for construction work to proceed back in 2013.

Then there’s the nearby Ten Streets project – an ambitious regeneration zone that will transform around 125 acres of former dockland into an exciting new district.

The Metalworks thus benefits from its proximity to three sizeable regeneration zones, each with its own timescale and likely impact on Liverpool and its property prices.

Simon added: “It’s also important to consider the likely future demand for the investment – who will the property attract in terms of tenants?

“How attuned is it with the future focus and vibe of the nearby regeneration areas? All of this comes into play when choosing the right property in which to invest.”

The Metalworks again ticks all the boxes in this respect. The spacious one- and two-bedroom apartments have been designed with city centre renters in mind.

The two-bed homes, for example, also include two bathrooms, making them ideal for sharers as well as for couples and small families.

The homes are also complemented by superb on-site facilities, from the prettily laid out communal gardens to the state-of-the-art gym.

The presence of secure, underground parking and a concierge service will also appeal to professionals working in the adjacent commercial business district.

In terms of timescale, investing at an early stage of a particular development can also reap rewards. The Metalworks has just announced the appointment of its main contractor – Goodwin Construction Group.

Investing at the point that work begins means that there is excellent scope for the value of the real estate to rise even before it is ready to be tenanted (late 2020, in the case of The Metalworks).

This is particularly true of Liverpool, where property prices are regularly among the fastest rising of all the UK’s urban areas, shooting up by 5% in May according to hometrack.

Simon concluded: “Understanding the area in depth will help with the identification of the right project and the right time in terms of the regeneration work already underway and any proposed future schemes.

“The value of local knowledge should never be underestimated when it comes to selecting the perfect regeneration zone investment.”