Tuesday, March 11, 2014

News: Rotherham Council in £7m AMP development deal

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Rotherham Council has concluded a multimillion pound deal that will enable development to begin at the R-evolution @ The AMP scheme.

Landowner and developer, Harworth Estates has secured outline planning permission for 100,000 sq ft of industrial units on seven acres of land on the Advanced Manufacturing Park (AMP) in Rotherham, which is set to provide further high quality business and manufacturing floorspace.

In two separate transactions Harworth has completed a forward-purchase agreement for the first phase of the development with Rotherham Metropolitan Borough Council for £4.3m and secured a £2.7m loan from the Sheffield City Region Joint European Support for Sustainable Investment in City Areas (JESSICA) Fund.

The forward-purchasing agreement will involve Rotherham Metropolitan Borough Council taking ownership of R-evolution's first phase when it is completed in October 2014. Harworth will be responsible for the delivery and the leasing of the development.

The money from Sheffield City Region's JESSICA Fund, which was set up to support infrastructure and real estate investment opportunities across the region, will pay for infrastructure works and the construction of new manufacturing units at R-evolution.

Owen Michaelson, chief executive of Harworth Estates, said: "We will deliver a first-class development for Rotherham Council. In a region where the availability of equivalent-quality stock is reducing, we expect to attract top-quality tenants, which will allow Rotherham to benefit from secure, long-term rental income from the development."

Paul Woodcock, director of Planning, Regeneration & Culture, at Rotherham Council, added: "The Advanced Manufacturing Park is synonymous globally with cutting edge expertise in advanced manufacturing technology, and as a result there is strong demand from high quality manufacturing businesses, who want to join the world-class companies already located here in Rotherham.

"The R-evolution project will provide opportunities for these businesses to grow at the AMP, both further enhancing the reputation of the Park and benefitting Rotherham through the creation of more high quality jobs and investment into the borough."

The developers expect the employment growth to go from 500 to 1,500 employees following Rolls-Royce's commitment to the AMP.

The deal unlocks the JESSICA funding by providing a certain financial exit, created by an agreement to purchase the development on completion of construction in return for receiving the revenue generated from rent.

Rotherham Council is borrowing the money to fund the purchase as it can borrow capital at low levels of interest from the Public Works Loan Board. It expects that the whole project will be cost neutral or generate an overall surplus to the council on realisation of the asset.

In 2012, Harworth Estates, the company created to realise the property assets of what was UK Coal, sold the fully-let, 87,500 sq ft Evolution development on the AMP for £7.2m.

The AMP is the UK's premier advanced manufacturing technology park and is located at Harworth's Waverley site, which is being transformed into Yorkshire's largest-ever mixed-use development.

Construction has recently begun on a 7,700 sq ft new build pub and restaurant for Marston's on land between the first phase of housing (completed by Harron Homes, Taylor Wimpey and Barratts) and the AMP.

Set to be called "The Winter Green", the pub is the second piece of community infrastructure to be constructed after the completion of a local play area last year and should be completed by the Summer. Construction is running in parallel to the building at Waverley of the second phase of new homes on-site and the R-evolution development.

Harworth Estates website

Images: Harworth Estates

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