News: Development fund supports millions of sq ft in floorspace and thousands of jobs in South Yorkshire
A publicly owned property fund is set to invest a further £34.8m to develop more business and create more jobs in the South Yorkshire Investment Zone.
The South Yorkshire JESSICA fund dates back to 2012 and has previously supported job-creating commercial property schemes through grants and loans. It has been used to kickstart Rotherham developments on the Advanced Manufacturing Park (AMP) and at Beighton Link.
To continue the financial support, the South Yorkshire Mayoral Combined Authority (SYMCA) has agreed to contribute £3m towards a total scheme cost of £34.8m to establish a flexible fund to encourage and accelerate development in the Investment Zone (IZ).
Primarily focused on connecting Sheffield to Rotherham (where the research assets such as The University of Sheffield Advanced Manufacturing Research Centre (AMRC) are already located), the zone is expected to create 8,000 new jobs and bring in £1.2bn worth of private investment by 2030.
IZ status provides South Yorkshire with up to £160m over ten years which can be used to offer investors, developers and start-ups a combination of targeted support and financial interventions to start, scale up and relocate their businesses.
A Sheffield Council paper explains: "In order to facilitate the growth of indigenous businesses and encourage inward investment the region needs to have a rolling supply of readily available, high quality and affordable commercial property. However the region still faces a number of market failures that means that the costs associated with speculative development often exceed the value to the developer. As a result, public funding in the form of subsidised loans, rental loans (guarantees) and first loss loans (grants) are required to stimulate development and facilitate economic growth."
Advertisement
A SYMCA paper adds: "Several developments have been identified within or immediately adjacent to the Spatial Core and Opportunity sites and these will be progressed in the first instance to bring forward speculative commercial floorspace for office or light manufacturing activity.
"The flexible fund will look to allow the SY JESSICA to provide finance through several routes to stimulate development including commercial loans, sub-market loans (including first loss), rental guarantees and, in cases of last resort, grant."
Around £22m is currently uncommitted. However there is a current pipeline of investments consisting of a eight developments seeking £25m in total (of which over £5m is in the form of grants).
Papers show that three potential sites have so far been identified for funding. "First Loss Loans" (grants) could support the construction of three developments - Norfolk Street in Sheffield City Centre, Dorehouse in Sheffield and at Junction 36 in Barnsley.
The fund was initially capitalised with £23m of external funding which was used for commercial loans. Since 2015 the fund has been successful in securing an additional £0.5m from the government, a £15m loan via the precursor of the Mayoral Combined Authority, which has since been repaid with interest, and two additional grants from the authority that have been used in the form of loans and grants with a value of £15m. In addition, the fund has established a relationship with the South Yorkshire Pension Authority which has seen several joint investments in the region.
Since the start of the fund, 25 investments have been made (23 complete and repaid), totalling £76m. It means that nearly two million sq ft of floorspace has been built, accommodating 7,000 jobs.
Images: Harworth Group
The South Yorkshire JESSICA fund dates back to 2012 and has previously supported job-creating commercial property schemes through grants and loans. It has been used to kickstart Rotherham developments on the Advanced Manufacturing Park (AMP) and at Beighton Link.
To continue the financial support, the South Yorkshire Mayoral Combined Authority (SYMCA) has agreed to contribute £3m towards a total scheme cost of £34.8m to establish a flexible fund to encourage and accelerate development in the Investment Zone (IZ).
Primarily focused on connecting Sheffield to Rotherham (where the research assets such as The University of Sheffield Advanced Manufacturing Research Centre (AMRC) are already located), the zone is expected to create 8,000 new jobs and bring in £1.2bn worth of private investment by 2030.
IZ status provides South Yorkshire with up to £160m over ten years which can be used to offer investors, developers and start-ups a combination of targeted support and financial interventions to start, scale up and relocate their businesses.
A Sheffield Council paper explains: "In order to facilitate the growth of indigenous businesses and encourage inward investment the region needs to have a rolling supply of readily available, high quality and affordable commercial property. However the region still faces a number of market failures that means that the costs associated with speculative development often exceed the value to the developer. As a result, public funding in the form of subsidised loans, rental loans (guarantees) and first loss loans (grants) are required to stimulate development and facilitate economic growth."
Advertisement
A SYMCA paper adds: "Several developments have been identified within or immediately adjacent to the Spatial Core and Opportunity sites and these will be progressed in the first instance to bring forward speculative commercial floorspace for office or light manufacturing activity.
"The flexible fund will look to allow the SY JESSICA to provide finance through several routes to stimulate development including commercial loans, sub-market loans (including first loss), rental guarantees and, in cases of last resort, grant."
Around £22m is currently uncommitted. However there is a current pipeline of investments consisting of a eight developments seeking £25m in total (of which over £5m is in the form of grants).
Papers show that three potential sites have so far been identified for funding. "First Loss Loans" (grants) could support the construction of three developments - Norfolk Street in Sheffield City Centre, Dorehouse in Sheffield and at Junction 36 in Barnsley.
The fund was initially capitalised with £23m of external funding which was used for commercial loans. Since 2015 the fund has been successful in securing an additional £0.5m from the government, a £15m loan via the precursor of the Mayoral Combined Authority, which has since been repaid with interest, and two additional grants from the authority that have been used in the form of loans and grants with a value of £15m. In addition, the fund has established a relationship with the South Yorkshire Pension Authority which has seen several joint investments in the region.
Since the start of the fund, 25 investments have been made (23 complete and repaid), totalling £76m. It means that nearly two million sq ft of floorspace has been built, accommodating 7,000 jobs.
Images: Harworth Group
0 comments:
Post a Comment