In the latest episode of PropCast, Mark Bourgeois, founder of Velement Real Estate Advisory, former interim director of city develoment at Liverpool City Council and former managing director of Hammerson in the UK and Ireland, speaks to Montfort’s Andrew Teacher about retail, regeneration and how the city of Liverpool is once again open for business.
When governance issues were raised at Liverpool City Council in 2021, Mark Bourgeois formed part of the taskforce that was sent in to get things back on the right track.
“I was there as the interim strategic director for city development and that essentially made me accountable for the property team, the regeneration development team, also planning and highways and transport,” he explains.
Bourgeois was faced with a range of stuck development scenarios, a £72 million budget deficit, and the challenge of rebuilding a team and appointing permanent members of staff to carry the baton forward.
It took close to a year, but looking back, he thinks the city is at a much better standing.
“Eurovision came at the right time in terms of a cultural catalyst,” he remarks. “There’s a lot going on in the city. Sony have got a head office and there’s a lot of tech businesses around the Baltic quarter. There is also a knowledge quarter centred around the four universities, which means a lot of life sciences activity, particularly around infectious disease research.”
“We’ve done our bit to turn the corner and present Liverpool as a place that is open for business,” he continues. “I think it’s a great place to invest now.”
While the council had made some investments that performed poorly, Bourgeois notes that this was an issue not confined to Liverpool.
“The shift in values on some of these assets, particularly retail ones, has left a few beached – just recently in Woking being a case in point,” he notes.
Retail is one of Bourgeois’ areas of expertise, having led the REIT Hammerson as its managing director for UK and Ireland.
“What we’ve learned in lockdown is that good retail space will always continue to be relevant, whether it’s in a city centre or out of town,” he reflects on his experience. “These are very investable assets, and indeed a lot of people are tipping retail to be one of the best performers. The huge challenge remains on valuation.”
And a major change, Bourgeois observes, is that shopping centres are now based much more on short-term income.
“They’re essentially operating businesses,” he says. “I think a more traditional business multiplier is probably the more effective way of valuing a business rather than any form of yield that might rely on continuative income.”