The UK government’s Northern Powerhouse strategy has been hugely effective in bringing attention to the North of England as a viable and lucrative location for investment. There are a number of different reasons for the success of the Northern Powerhouse, and why investors from around the world are choosing this area as a safe and secure investment. Investment in the Northern Powerhouse isn’t limited to one country; several nations and international companies have been increasingly interested in this new economic heavyweight.
Trade delegations have been one of the biggest components of the Northern Powerhouse’s strategy to attract overseas investment. In July 2015, the Prime Minister David Cameron and Business Secretary Sajid Javid led the first Northern Powerhouse trade mission when they took 62 Northern companies to Singapore and Malaysia. The delegation represented a total turnover of more than £10 billion, with a combined workforce of over 50,000 people. Malaysian investor Petra Group announced that 90 highly skilled jobs would be created after they made an investment of around £12 million in the North. The Singaporean Secretary of State for Business gave a speech on ‘Growing Trade and Investment links between the UK and Singapore’ and the delegation later travelled to Malaysia to build relationships with the Northern Powerhouse there too. Other significant investments and partnerships include the Manchester-based SME FutureEverything which won a contract from the Singapore Government worth £500,000.
Another area which has benefitted from overseas investment is Northern Powerhouse property, and foreign investors are increasingly looking for opportunities there. In a recent survey of investors from the Gulf area, research has found that there is a clear majority of Middle Eastern property investors who will soon be investing their money in the UK, with 13% citing Manchester specifically as the city that they consider the most attractive. Over 80% of the survey respondents said that the UK was a strong place to invest in property. An impressive 70% of those investors believe that there are higher rental yields in Northern cities than London, and a third said they would choose an area based on capital growth for investment, which Northern Powerhouse property definitely provides.
Other factors like Brexit and the fall in the pound have also made the UK increasingly attractive to investors from Saudi Arabia, the United Arab Emirates and the Wider Gulf Region. Private property companies like RW Invest are seeing an increase in the number of overseas investors who are looking for Northern Powerhouse property and this rise can be seen from a number of different nationalities.
The level of Foreign Direct Investments (FDI) in the Northern Powerhouse is very much on the rise. In 2016, the Northern Powerhouse received 90 FDIs and 54 of those were first-time overseas investments. This shows that the efforts to open the doors to overseas investors and raise the profile of the region are having a genuine impact. The USA was the biggest overseas investor in the Northern Powerhouse during 2016, with 25 FDIs coming from the United States.
Overseas investment in the Northern Powerhouse has come from a number of different regions and countries, showing that the appeal of investing in the Northern Powerhouse is truly global. A proactive and determined effort has had a real impact on the Northern Powerhouse and increased foreign investment has been vital to the region’s bright future.