News: Launch for £23m property fund
Funds are available now as part of a £23m city region fund to provide development and construction finance at a time when banks and other financial institutions are not prepared to lend, even for financially viable projects.
The Sheffield City Region Local Enterprise Partnership (LEP) has been working with Creative Sheffield, part of Sheffield City Council to create a Joint European Support for Sustainable Investment in City Areas (JESSICA) fund, a financial engineering mechanism used to create a revolving fund that could be used for regeneration projects such as the creation of new commercial floorspace, brownfield redevelopment or investment in infrastructure.
It uses £8m of the government's Growing Places Fund to leverage a further £15m of funding from the European Regional Development Fund (ERDF).
At its last meeting, LEP board members agreed that the SCR Urban Development Fund should be officially called "JESSICA" from now on.
A launch event at the AMP Technology Centre in Rotherham on April 26 will be hosted by commercial property and real estate services adviser, CBRE with SCR LEP chairman James Newman and Councillor Leigh Bramhall of Sheffield City Council. The event will include a "meet the fund manager" session with CBRE, allowing attendees to explore how their project can access associated funding sources across the Sheffield City Region.
James Newman, chairman of the Sheffield City Region LEP, said: "We have been working very closely with our private sector colleagues in the construction industry and time and time again they refer to access to finance being a major barrier to development. This fund is a direct response to this barrier and whilst it will not solve every problem or be suitable for every development, it puts in place a significant financial tool to help stimulate the local economy.
"Importantly, we expect to see a return on the investments, which will then be recycled into further projects over the next ten years. It is hoped that over time it will be able to also support investment across the wider city region."
Tony Martin, head of Investment Advisory at CBRE, added: "The SCR JESSICA Fund aims to underpin the region's long-term growth and stability through an innovative mix of public and private funding. It will give developers the opportunity to secure much needed finance for strategic sites that will make a significant contribution to the success of the Sheffield City Region economy. The fund is looking for projects that could promote sustainable employment, rejuvenate areas or create new opportunities for communities across the region."
Will Church of CBRE spoke at the recent RiDO Property Forum to outline the new fund that will provide commercial loans to projects for physical development for economic growth.
It is expected that the maximum loan size for any one project will be £4.6m (or 20% of fund) and minimum loans will be around £1.5m. There is also the possibility of the fund providing equity, but only in exceptional circumstances.
In the first instance, projects need to be compliant with ERDF rules but as the loans are repaid, the funds can be recycled and reinvested in a wider variety of development projects.
CBRE is looking to make first investment spring / summer this year with the first round investment to spent by December 2015.
Decision making for the JESSICA fund will be aligned to the Sheffield city region investment fund for strategic infrastructure investment (SCRIF), that brings together different funding streams to maximise economic growth across the city region. It has the potential to provide up to £700m over the next ten years.
At the last meeting, LEP board members endorsed 28 projects to go forward for modelling and analysis of the overall impact of investment. The list includes four Rotherham projects focused on improving infrastructure in Parkgate, Maltby, the Lower Don Valley and the town centre.
SCR JESSICA website
SCR LEP website
The Sheffield City Region Local Enterprise Partnership (LEP) has been working with Creative Sheffield, part of Sheffield City Council to create a Joint European Support for Sustainable Investment in City Areas (JESSICA) fund, a financial engineering mechanism used to create a revolving fund that could be used for regeneration projects such as the creation of new commercial floorspace, brownfield redevelopment or investment in infrastructure.
It uses £8m of the government's Growing Places Fund to leverage a further £15m of funding from the European Regional Development Fund (ERDF).
At its last meeting, LEP board members agreed that the SCR Urban Development Fund should be officially called "JESSICA" from now on.
A launch event at the AMP Technology Centre in Rotherham on April 26 will be hosted by commercial property and real estate services adviser, CBRE with SCR LEP chairman James Newman and Councillor Leigh Bramhall of Sheffield City Council. The event will include a "meet the fund manager" session with CBRE, allowing attendees to explore how their project can access associated funding sources across the Sheffield City Region.
James Newman, chairman of the Sheffield City Region LEP, said: "We have been working very closely with our private sector colleagues in the construction industry and time and time again they refer to access to finance being a major barrier to development. This fund is a direct response to this barrier and whilst it will not solve every problem or be suitable for every development, it puts in place a significant financial tool to help stimulate the local economy.
"Importantly, we expect to see a return on the investments, which will then be recycled into further projects over the next ten years. It is hoped that over time it will be able to also support investment across the wider city region."
Tony Martin, head of Investment Advisory at CBRE, added: "The SCR JESSICA Fund aims to underpin the region's long-term growth and stability through an innovative mix of public and private funding. It will give developers the opportunity to secure much needed finance for strategic sites that will make a significant contribution to the success of the Sheffield City Region economy. The fund is looking for projects that could promote sustainable employment, rejuvenate areas or create new opportunities for communities across the region."
Will Church of CBRE spoke at the recent RiDO Property Forum to outline the new fund that will provide commercial loans to projects for physical development for economic growth.
It is expected that the maximum loan size for any one project will be £4.6m (or 20% of fund) and minimum loans will be around £1.5m. There is also the possibility of the fund providing equity, but only in exceptional circumstances.
In the first instance, projects need to be compliant with ERDF rules but as the loans are repaid, the funds can be recycled and reinvested in a wider variety of development projects.
CBRE is looking to make first investment spring / summer this year with the first round investment to spent by December 2015.
Decision making for the JESSICA fund will be aligned to the Sheffield city region investment fund for strategic infrastructure investment (SCRIF), that brings together different funding streams to maximise economic growth across the city region. It has the potential to provide up to £700m over the next ten years.
At the last meeting, LEP board members endorsed 28 projects to go forward for modelling and analysis of the overall impact of investment. The list includes four Rotherham projects focused on improving infrastructure in Parkgate, Maltby, the Lower Don Valley and the town centre.
SCR JESSICA website
SCR LEP website
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