Dublin's rich add twist to tale of two cities

They are two cities of roughly the same size, with similar cultures and accent, 140 miles apart - yet separated by a frequently stormy sea.

In the mid 19th century, tens of thousands of starving immigrants poured into Liverpool from Dublin to work in the city's docks and workshops as the area became one of the world's great trading posts.

Now, in a remarkable reversal, Ireland's dynamic new entrepreneurs and Dublin's cash-rich property elite are pouring tens of millions into Liverpool and helping to transform a down-at-heel city into a millionaires' playground. It has become a place to dump surplus capital and make money work faster than in overheating Ireland.

They are buying up flats by the hundred, helping to fuel an unprecedented property boom, investing in new port facilities to serve high-speed ferries, and even planning supermarket distribution depots - to serve Ireland, not England.

The historic connections between the cities are being further strengthened by cut-price air travel and express ferries - making it much faster, and cheaper, for Liverpudlians to get to Dublin than to London.

Since the cities twinned in 1998, David Tinsey of the Liverpool chamber of commerce said the links between them have strengthened to such an extent that their economies are almost merging.

"Dublin is not thought of as a foreign city," he said. "People here consider Dubliners to be kith and kin. The links are natural. As the economy in Dublin peaks, business people are looking elsewhere for prime areas to invest. London is expensive and a more difficult market to penetrate."

Across the Irish Sea, Phil Sweeney, director of sales and marketing for the Prem Group, one of Dublin's largest property concerns, agreed. They are taking out leases on scores of Liverpool apartments and are now opening serviced offices in the city.

"A lot of people in Dublin are sitting on serious wealth and it is getting harder and harder to find investment opportunities over here," she said. "Development in the city is just not encouraged any more. We have lost a lot of our tax incentives, which makes cities outside Dublin - particularly Liverpool - an attractive proposition."

Part of the attraction is the more favourable fiscal regime in a UK outside the eurozone: taxes levied on properties valued between £25,000 and £500,000 are small compared with Irish taxes of 15% on similarly priced homes.

As a result, the chief executive of one large Liverpool property company said he knows of at least one Irishman who is borrowing £30m of mortgage cash each year to buy flats in Liverpool.

The type of investment and talent coming across the Irish Sea is also diversifying, taking in sectors other than the traditional areas of property and construction.

Mr Tinsey points to supermarket distribution and the professional services sector as a prime example of the shift. High profile Dublin residents such, as fashion designer John Rocha, are also taking an interest. He has chosen to launch his second major hotel interior design project in Liverpool.

The timing of the Irish interest in Liverpool is no coincidence. The city council and key players in the private sector point to a change in attitudes to Liverpool and to a new business confidence taking root.

Tom Bloxham, whose Manchester-based Urban Splash has been at the forefront of residential property development in the north west, said: "Liverpool has not been seen as a business-friendly city historically. But all this is changing. New investment capital is coming in and a chunk of it is coming from Ireland."

Paul Bolton of property developers the Charlton group agreed: "We have strong relationships with a number of Irish firms and they have an appetite for rental properties in the city centre in particular."

Mr Bolton said that Dublin's new-found business confidence is rubbing off on Merseyside. By investing in the city, which would benefit from a similar "can do" ethos as the Irish capital, he predicted that cash from Dublin could be a significant factor in Liverpool's future success.

Charlie Parker, executive officer for regeneration at Liverpool city council, said investors from Ireland and beyond are beginning to take Liverpool seriously. "It is very well placed as a gateway to east and west. It has benefited from its location in the past but we are now seeing different benefits. Add this to cheaper property and cheaper labour and we have an attractive package for new investment."

If the cash currently flowing from Ireland does turn into a flood, Dublin could once again be the engine for Liverpool's economy. There is an element of history repeating itself said local historian Steve Burns - albeit with Irish money rather than labour.