£45 million funding secured for 125 Deansgate
The development team behind 125 Deansgate, one of Manchester’s most eagerly awaited commercial office developments, has secured a funding facility of £45 million.
The clubbed facility has been provided by North West Evergreen Fund, a local authority pension fund and the Growing Places Fund, advised by CBRE’s Investment Advisory team, part of CBRE Capital Advisors.
The three-year funding facility will enable Worthington Properties to begin construction in early 2017 with plans for the scheme to be finished in summer 2019. The development will provide 113,500 sq ft of Grade A office space in the heart of Manchester, to support the continued economic growth of the Greater Manchester region and the ongoing development of the Government’s proposed Northern Powerhouse.
Russ Worthington, director of Worthington Properties, said: “Manchester continues to prove itself as a world class destination to do business and 125 Deansgate, when complete in 2019, will provide businesses with a great place to operate within.
“Securing the funding is testament to the quality of the proposals at 125 Deansgate along with the high profile location of the scheme. These investors are incredibly astute and have to be confident the development would provide a return for them.
“They would have not provided the facility if they didn’t see the value in the development and we’re proud to be working in partnership with them on this. This funding will mean we are able to progress with speculatively developing the building.”
Councillor Kieran Quinn, Lead Member for Investment and Finance on the Greater Manchester Combined Authority said: “Deansgate is one of the busiest and most well connected corridors in the city centre, if not in the entire region. Enabling redevelopment of this site represents an excellent opportunity for the North West Evergreen Fund. The investment will provide both the returns that the fund needs to continue supporting regeneration projects and the social value for Greater Manchester in the form of jobs and a new first class office facility.”
Andrew Antoniades. Senior Director, CBRE Capital Advisors commented: “This is a fantastic development that we are very pleased to have arranged the funding for. Despite strong underlying fundamentals in the Manchester real estate market, development finance remains scarce throughout the UK and the private sector debt market is increasingly unwilling to fund such schemes.
“Consequently, investment funds such as these are vitally important to the North-West economy, and its continued growth. As such, we are pleased to provide funding support with a sizeable loan package to help ensure the city has high quality Grade A commercial space to continue to attract new business and support employment.”
The North West Evergreen Fund, which is made up of 16 local authority limited partners, was established to provide funding to support real estate projects, which are critical to the region’s economy, generating jobs and growth. It is capitalised through the European Regional Development Fund (ERDF) and other public money allocated under the Joint European Support for Sustainable Investment in City Areas (or ‘JESSICA’) initiative, which is managed by the European Investment Bank in the North West on behalf of the Homes and Communities Agency (HCA).
The Evergreen model provides loan funding to be invested in projects which will generate a financial return and will then be recycled back into the fund to help support further projects. The fund is advised by CBRE Indirect Investment Services Limited, the FCA regulated arm of CBRE.
Advisers included Nabarros which provided legal advice on construction, property and development to Worthington Properties. Gowling WLG provided legal advice on construction, property and development to the investors.
Savills and Knight Frank have been instructed as agents for the development.