|Project||Liverpool Infinity Waters|
|Type of Investment||Studio's, 1 and 2 bedroom apartments|
|Location||Liverpool, 1.5km north of Albert Dock|
|Rental yield||6.2% net yield (at present rental prices)|
|Expected completion||Q3 2020|
Despite all political issues in London, the Northern Powerhouse keeps breaking records. With an average value increase of 7% over the last 12 months, Liverpool and Manchester both are leading the UK’s best performing cities. De demand for new flats remains high, and a s a result also the number of apartments that is being built.
Liverpool waters & Infinity Waters
The Liverpool Waters project is the most important regeneration project of Liverpool. The Peel group is planning and investment of 5.5 bn£ to develop an area of 2.5km along the river. The city center will move north. Infinity Waters is the main attraction point of this development. The three towers will not only be the landmark on the new Liverpool skyline, but probably also the point of reference for “modern living” in Liverpool.
The project is situated on the north of the edge of the present centre en will be the link to the whole Infinity development to the north. It is located at a mere 1.5km of the Albert Dock and the Shopping district of Liverpool One. Anything in the centre will be perfectly reachable by foot.
During the construction, you can buy the flats of Infinity wth a 20% discount on normal market prices. With prices between 3.200 and 3.500£/m², this feels like a bargain in the centre of Liverpool. Studio’s are available for a mere 100.000£ and two bedroom apartments are selling for 180.000£.
Compare this with any apartment on rightmove (the marketleader for online search) and you know you will be rewarded for the waiting.
Of course, the project also has common services: a common garden, gym, movie theatre, meeting rooms, lounge, swimming pool, sauna & steam room. You would move to Liverpool for less.
… and profitable
With present rental prices, the net return on total investment (net of all management costs and taxes) would be around 6.2%. With rental prices growing by 3-4% per year, you might be expecting a return of ~7% at the time of completion (Q3 2020). The owner throws a 7% rental guarantee in the mix for the first 3 years.
But the argument for this development is obviously not the high rental yield. Most projects would achieve a 5-6% net rental yield). It is the potential capital gains of a location that will be the centre of Liverpool 2.0 and yet will be located at walking distance from the historical centre.
As the building has started, we think it is now a good time for investors to come in. The 6% rental yield, combined with a high potential capital gains for the luxury site and the location in between the present centre and the future Infinity Waters will ensure a strong potential for capital gains.