A funding facility of £45 million has been secured for the 125 Deansgate office development in Manchester city centre.
The clubbed facility has been provided by the North West Evergreen Fund, a local authority pension fund, and the UK’s Growing Places Fund, advised by CBRE.
The three-year funding facility will enable Worthington Properties to begin construction in early 2017 with plans for the scheme to be finished in 2019.
The 125 Deansgate scheme comprises 113,500 sq ft of Grade A office space.
Worthington Properties director Russ Worthington said: “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.”
Councillor Kieran Quinn, lead member for investment and finance on 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.”
CBRE Capital Advisors senior director Andrew Antoniades said: “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 is made up of 16 local authority limited partners and was established to provide funding to support real estate projects critical to the North West economy.
The fund 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 (JESSICA) initiative, which is managed by the European Investment Bank in the North West on behalf of the Homes and Communities Agency.
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 investors.