The Cunard Building, home of Liverpool City Council

Liverpool sets out £50m investment strategy

Liverpool City Council’s cabinet will next week be asked to approve the city’s proposed Commercial Property Investment Fund plan, aiming to invest an initial £50m in rent-generating property.

Of that first £50m, 50% is to come from Public Works Loan Board borrowing, and the other 50% from capital receipts.

The strategy, as set out by report author and head of commercial property investment Stephen Kirk, states: “The CPIF Strategy has nothing to do with local operational and/or regeneration property investment or treasury management.

“It is about taking advantage of the council’s low cost of borrowing and investing for the long term in low risk commercial property assets in order to generate financial returns, which can then be used to support the ongoing provision of essential services.

“The strategy is to acquire a diversified portfolio of low risk commercial property assets, financing the acquisitions through a combination of prudential borrowing and capital receipts.”

Liverpool’s fund, which will focus on existing built stock rather than development, will invest in properties across the UK, with no more than 35% of it committed to any single region and no more than 25% in any single town or city.

The move to build up an investment portfolio follows several other local authorities in recent years, with Warrington being among the more notable buyers in the region.

Liverpool’s fund will target lot sizes of £5m to £15m, with net initial yields of 5% to 7%, primarily in offices, retail and industrial – although alternative asset classes will be considered.

The CPIF report said: “LCC will invest in suitable commercial property assets which meet the pre-defined criteria and minimum required matrix scoring, with a view to assembling a diversified portfolio designed to produce additional revenue income to support council services.”

The report asks that delegated authority on investment decisions be granted to an officer, rather than going to cabinet, for the sake of timeliness. The officer will consult with the head of commercial property investment on minor decisions, and a CPIF board, comprising the mayor, chief executive and head of legal, on major decisions.

A separate strategy is to be developed for LCC’s existing local property portfolio, considering further rationalisation and/or new property acquisitions locally where appropriate. The council said that preparation of this strategy will take place in parallel with a turnaround project currently being undertaken by the finance department of its property & asset management services team.

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More property speculation funded by the taxpayer, and no accountability to the Council’s own Cabinet for ‘timeliness’. Shameless. No doubt if Joe survives the forthcoming purge, some of this cash will find its way into the hands of his beloved EFC. What strange times we live in.

By John Smith

Sounds sensible to me, but I do think the focus should be more local and strategic: LCR.

By Roscoe

Taking tax payers money to put into speculative property at the top of a business cycle is another example of how government (national and local) needs to be cut right back.

The cost to the tax payer is more than the taxes raised, costs of collection and reduced spending power for the tax payers is reduced by between 10-20% on top of the tax rate.

Individuals are best placed to spend their own money not politicians

By Stuart wood

Very sensible…other councils are doing this with good success …given massive cuts in government funding it’s good Liverpool are taking this innovative approach to support its front line services. I understand they are spreading the risk by investing across the uk …..but some focus on the city region to boost jobs whilst still making a return would be useful

By Anonymous

Good news for all !!

By Mikes mate

I’m sorry, Council’s function these days should be to facilitate growth locally not speculate in development in other parts of the country. Problem is, current leadership in the city likes playing the developer without the expertise to do so. Money wasted on schemes involving them such as St. Johns Market is disgraceful, and lack of oversight and probity on failed schemes such as New Chinatown borders on the negligent.

By John Smith

So Liverpool council is going to plough £50m into speculative commercial property investments, that will give returns if other cities, rather than Liverpool, are successful. Says a lot. As Degsie says, this is Anderson’s Liverpool.

As long as the council has its income, that’s all that matters. Economy? What’s that?

By Mike

JS, you clearly dont understand the EFC / Bramley Dock area funding method and how its put together. I’m a RED and I want Joe to do this for Liverpool. Councils being more commercially savvi is the way forward; we’ll get nought from the Conservatives.

By HENRY

JS fhe New Chinatown scheme was a private developer, not the Council; they were only facilitating growth.

By Anonymous

It’s going to happen anyway they are playing at giving options. Spend the money fixing the broken City.

By MR K CONNOLLY

The fact is there isn’t enough money to go round, that’s why we need to be cleverer with what we’ve got.
Invest – yes – but put the effort into our own city region. Liverpool is one of the fastest growing cities. We can encourage that and benefit from it financially too.

By Roscoe

As a resident and council tax payer of the city of Liverpool – I think Joe Anderson should concentrate on all the people claiming sole person discount on their council tax when they are either married or shacked up! This would bring in lots of revenue. 25% on a lot of properties!
However re the article I understand this sort of model is what Warrington council use to earn revenue and cope with gov cuts and they own a solar farm which is in another region – and they sleeve the ‘green energy’ to supply council properties.

By Bob Dawson

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