Public sector pension fund the Greater Manchester Pension Fund (GMPF) has bought a portfolio of performing real estate loans with a face value of around £30 million secured by property developments in North West England.
The GMPF has bought the portfolio of four loans from the North West Evergreen Fund, a public fund backed by 16 local authorities in the region which aims to support developers of employment-led property schemes. The deal was structured by CBRE’s investment advisory team, which forms part of the firm’s CBRE Capital Advisors unit.
The four loans are all performing and were transferred by the Evergreen Fund significantly ahead of maturity in order to increase its funding capacity for future projects. The loans were sold at par value to GMPF.
The loans are secured by four developments including offices and a hotel at the Media City scheme in Salford Quays, offices at the Soapworks scheme at Media City, and offices at 1 Spinningfields within Manchester’s Spinningfields business district. The portfolio is also secured by offices at Chester’s City Place scheme.
The North West Evergreen 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. The JESSICA initiative is managed by the European Investment Bank in the North West on behalf of the Homes and Communities Agency.
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 and co-chaired by Manchester City Council and Lancashire County Council.
“Evergreen was established to provide developers with an opportunity to secure much needed finance for strategic sites that will make a significant contribution to the economic growth of the North West of England,” said Tony Martin, head of investment advisory at CBRE.
“Supported by the Government’s commitment to invest in the ‘Northern Powerhouse’, the need for development funding for employment schemes is accelerating. By transferring this latest portfolio, we were able to release valuable capital which can be allocated to the next projects,” added Martin.