Renaker has transformed Manchester's skyline in recent years. Credit: via planning documents

Are GMCA’s £500m Renaker loans problematic or prudent? 

Since 2015, the Greater Manchester Combined Authority has lent prolific developer Renaker half a billion pounds to develop more than 5,000 homes in Manchester and Salford. While many see this as good business sense, some industry noses have been put out of joint.

What is the problem? 

There seem to be two schools of thought when it comes to how much money the Greater Manchester Combined Authority has loaned to Renaker in recent years.

Some people see no problem with it. In their minds, it makes perfect sense to loan the city’s most prolific developer large sums of money to continue to do what it does best.

The developer has a track record of delivering homes something Manchester has a well-publicised shortage of.

To date, Renaker vehicles have received loans exceeding £500m for the delivery of 5,647 apartments from the Greater Manchester Housing Investment Loans Fund across schemes at Greengate in Salford, and New Jackson in Manchester, among others.

While the GMCA is at pains to stress that Renaker has never had more than £120m at any one time – it has to repay what it owes before the next loans can be confirmed – the loans it has received amount to more than half of the £942.5m total awarded. It is a lot of money in anyone’s book.

Eamonn Boylan, chief executive of the GMCA, argued that Renaker’s outputs justify the creation of the fund.

“The reason we went for the housing fund in the first place was to enable us to take decisions based on local intelligence about what was needed and what would work locally,” he explained.

“That was something that you couldn’t do by relying on institutional investors or national investors we need to do that ourselves and we’ve done that.”

Place reached out to Renaker for comment but did not hear back.

Risky business 

While many see no problem with GMCA’s support of Renaker, some within the property industry and Place’s comment section are annoyed about the amount the developer has been given.

Many other well-known firms including Capital & Centric and Cityheart have benefitted from the fund but no other developer has received loans as large as Renaker’s.

Does putting more than half of its eggs in Renaker’s basket put the GMCA at risk?

The most recent Renaker loans amount to £120m – with the potential to rise to £140m – for two towers providing upwards of 1,000 homes. They were signed off at GMCA meeting last week.

The agenda item was resolved in less than a minute, which illustrates the regard Renaker is held in by city region bosses.

Trust is a powerful ingredient in Renaker and the GMCA’s relationship. However, some would argue that market forces are stronger. Bigger businesses than Renaker have gone to the wall in recent years.

Nobody is suggesting collapse is on the cards, though. On the contrary, Renaker seems to be at the height of its powers, a fact which tempers any feelings the GMCA may have about being over-exposed.

The four-tower Trinity Islands scheme has been backed by the GMHILF. Credit: via planning documents

Place North West has spoken to several of the developer’s peers in recent days. While some are miffed and cry favouritism, there seem to be fewer sceptics than believers when it comes to Renaker’s GMCA loans.

None wanted to put their thoughts on the record but the majority were ambivalent, even supportive, of the GMCA’s approach.

One said the amount Renaker has been loaned was “disproportionate” but understandable.

“The GMCA wants to lend to a safe pair of hands. I do not lose too much sleep over it,” he said.

Rates wrangling 

There is a perception that borrowing money from the GMCA is cheaper than getting it from a financial institution.

The GMCA does not publish this information due to “commercial sensitivities” but Boylan insists nobody gets preferential treatment.

“Everyone assumes that somehow this is cheap money. It is not. It is [at] commercial rates, effectively,” he said.

“In many instances, we are the lender of last resort. The reality is that an awful lot of institutional investors will take a very narrow view of places like Manchester.”

There is no flat rate for loans from the GMHILF, Boylan explained. The base rate is topped up with an add-on calculated against the perceived risk of a particular scheme. All are state-aid compliant, according to the GMCA.

The spirit of competition 

Renaker might not be getting “cheap money” but does the £500m it has received from a public sector fund raise questions around competition?

While the developer has unquestionably benefitted more than any other from the GMCA’s housing fund, the idea that awarding large loans to Renaker means that others miss out is not strictly true, according to Boylan.

“It is not the Renaker show by any stretch of the imagination,” he said. “We have not turned down a single viable scheme.

“Renaker obviously stands out because of the scale of what they’ve done but the fund has been very effective in supporting housing development right across the conurbation.”

In other words, any developer with a viable project is welcome to bid for money from the GMHILF and the GMCA makes no apologies for backing a developer Boylan describes as a “very very efficient deliverer of homes”.

Value for money 

Since emerging as Manchester’s most prolific developer, Renaker has been criticised for its record on affordable homes.

Renaker has not delivered a single discounted property within any of the schemes for which it has received GMCA loans. This has led some commentators to question whether the combined authority is getting the best deal for residents.

The GMCA says that more than 1,000 affordable homes have been delivered as a result of GMHILF loans. Boylan believes there is more than one way route to affordability, saying that many people who live in Renaker’s homes are young professionals who share flats.

“I’m not saying it is perfect or ideal for everybody,” he said.

Renaker argues that viability is tight and that the cost of developing on brownfield sites in the city centre puts limits on what can be delivered. This is an argument that Manchester City Council has found convincing over the years when determining the developer’s planning applications.

It has also left some people disgruntled. Some within Manchester’s development community feel that the city is not pressing Renaker hard enough on the affordable homes point.

Renaker’s recycling 

Loan repayments made by Renaker and others are recycled back into the fund. The £300m the government gave to the GMCA originally has ballooned to £940m.

The organisation’s outgoing chief executive claims that, by the time the fund ends, it will have delivered 12,000 homes, which is 3,000 ahead of the original target.

“It will not have cost the taxpayer a cent. In fact, we will have made a return on it,” Boylan said. “We’re using that return in large part to fund capability that districts need in order to be able to develop their own pipeline of schemes coming forward.”

Boylan added that the proceeds will go towards supporting cash-strapped local authorities.

“Many local authorities that have had years and years of austerity have lost out in terms of some of those professional technical areas and planning and development because they have had to focus on statutory responsibilities around children and adults.

“We’re using [the returns from the fund] as a positive generator of resource to enable us to broaden the offer.”

Where Renaker and Manchester would be without the £500m the developer has been loaned by the GMCA is hard to say. But it is not too much of a stretch to suggest that far fewer homes would have been built in the city over the last decade.

It is clear that as long as Renaker keeps delivering on tricky brownfield sites, the GMCA will keep lending it money.

Your Comments

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It’s a large sum but it works out around £88,000 per unit. As long as GMCA gets all that money back (with interest I would imagine) then they will have more money than they started and there are 5500+ new homes for the people of Manchester to live in. Affordable or not, it boost supply which is what the city desperately needs. I think it would cost a lot more for the council/GMCA to build reasonable affordable homes itself for a lower return on investment, and no doubt a lot slower/lower quality due to red tape and budgeting.

By Anonymous

It’s always concerned me that a bank does not see it worthwhile to lend this sort of money and expose themselves to this sort of risk. The question in the title is a completely valid one. I can also see why other developers feel aggrieved at receiving little to no loans.

By js1000

This is fall out from an upset land owner (not a developer) who isn’t getting their own way on a commercial point with MCC.

Mud is being thrown and hoping some sticks.

Well done to MCC in standing up to the bullying.

By Wise words

Really don’t see the issue with this story the media seem to be all over. Solid developer with proven track record, gets lent money to built much needed houses, pays the money back on time with interest. Money is recycled back into the fund and not lost, the pot grows. All whilst Manchester enjoys development and regeneration most other cities can only dream of. Always some who are unhappy no matter what.

By Bob

In Boylan’s own words, the fund should be a funder of last resort. So you have to ask, why would normal lenders not want to invest in schemes like this?

By Anonymous

What is the issue exactly that warrants a whole PNW article to be written about it? Renaker always have and will pay the loans back in full and on time. Next.

By New Wave

It is not the first time to hear that developing a brownfield is difficult. In fact, I find it is more easy to build from zero because you don’t have to demolish or retain the old buildings, also build whatever you would like to without concerning the neighbourhood. I have no clue the reason to find it the difficulty.

Talking about the brownfield. Are there any more in Manchester city centre? The warehouses between Trinity Island and Potato wharf seem to be potentially developed to few more mid-high rise. It could be a extension of Trinity Island. In fact, Renaker own a land next to the storage box building.

For another mature developer Salboy, they also did pretty good jobs in developing in MCR. They provide different level of residential choices from the high end W-residences to Viadux and then Waterhouse Gardens to Victoria House. Although their development scale isn’t as hugh as New Jackson, their works are still recognised.

Another interesting brownfield where is out of MCR is The Red Bank developed by FEC. FEC have a high ratio of debt literally, I am not sure if the public and investors have noticed it. I doubt they can really complete the whole development of The Red Bank alone even though the MCR government is involved. If talking about the risk, it is more of my concern.

By Martina

There are lots of affordable homes within 15 minutes of the city centre which are probably more suited to families than apartments.

By Peter Chapman

It’s how a lot of councils up and down the country have gone bust or are about to. Warrington Borough Council being a casing point, where they have invested huge sums into commercial property investments which are now underwater. The underlying issue being that the councils can borrow monies from the government at relatively low rates and lend them out at higher rates. Unfortunately those doing it aren’t all that experienced and rely on the consultant gravy train, who are delighted to help for some very nice fees and not a lot of work.

By Fidel

It’s hard to say whether it’s a good deal for GMCA without knowing what sort of return they are getting, isn’t it?

Lending like this from public sector bodies is always talked about as ‘delivering’ housing, sometimes it means more homes get built, but sometimes it just means the private sector can take less risk or make a better return for itself on housing that (much as developers might protest otherwise) they probably would have built most of anyway. If the impact is purely in driving down the cost of capital for private developers by ‘competing’ with other sources of funding, then most of that benefit is being captured by the shareholders of the developer in question…

By Salfordian

Let them get on with it. We should be thankful for the transformation they’re bringing about. Lots of cities would kill for a developer with this track record

By Lee

“ Renaker argues that viability is tight” unfortunately construction costs have gone up, so working out how much rent can charge to recoup your money.
GMCA would of been better lending to housing associations who would house more people.
The problem is Manchester City Council want to be like london, expanding the tram network etc but people are paid northern salary.

By Anonymous

And people wonder why is shortage of affordable housing for young people when the supply of housing for the rich overseas non tax payer is being subsidize.This is socialism for the rich at the tax payer expense.

By Steve Eare

I think the GMCA should be congratulated on how it has used the Housing Investment Fund and supported all of those developers who have sought funding support from it. Banks, even in the good times over the last ten years, have not wanted to overexpose themselves to the city for building tall residential towers. So the GMCA have been bold and prudent at the same time.

Looking forwards there will hopefully be a renewal of the Fund in some shape or form. A big lesson can be drawn from the West Midlands equivalent of the Housing Investment Fund – access to it is conditional on delivering 20% Affordable Housing. That is the issue which we should all be discussing!!

By Anonymous

Agree that if we don’t know what the deal is then how can we say it’s a good deal for MCC? Also – it feels a little monopolised when all the big opportunities are going to one entity, even at the risk of exposure.

By Laaaa

What you need to ask yourself is why a labour administration would lend money to a private developer to build homes, none of which are affordable, if it wasn’t necessary.

By Obviously

I’m sure other developers would get a greater slice of the pie if they could put them up as quickly as Renaker do. Council benefits from increased council tax, job creation and the fund is repaid with interest. Don’t see the argument on the other site. City center is for high density not “affordable” homes.

By Anonymous

And don’t forget that 20% of all homes built in Manchester over the past 4 years were genuinely affordable. But that doesn’t suit the narrative of many on here

By Fact check

Can MCC’s Mipim Media Mouthpiece be relied on to opine objectively? the article is clearly agenda driven and MCC has been leaning on the writer.. Wisdom = Knowledge

By Wise Words

    Hi Wise Words – thanks for engaging with our news article looking into GMCA’s loans to Renaker. This is not an opinion piece and as such does not have an opinion. It simply is presenting the facts and exploring GMCA’s methodology. Our readers are always encouraged to come to their own conclusions about how they feel about the loans – we hope our story provides them with the information needed to do so. If you have questions about our reporting and objectivity, I’d love to chat with you. I’m at You can also find my phone number on the contact page.

    By Julia Hatmaker

“And don’t forget that 20% of all homes built in Manchester over the past 4 years were genuinely affordable. But that doesn’t suit the narrative of many on here” – Fact Check, where did you get your figures from and how have you defined “genuinely affordable”?
Housing is now generally unaffordable, so your comment really doesn’t make sense.

By Anon

Not a single developer in Manchester is building at the speed and at such efficiency as Renaker. The spec they deliver is outstanding and the quality of the apartments are without doubt the best in Manchester if not the country. Whilst other developers look to reduce costs and lower the specification, Renaker look to always improve and use more sustainable products. Manchester is well and truly on the map in terms of it’s changing skyline and Renaker are the driving force behind the popularity of city living. In short they leave a lot (not all) of the competitors behind.

By Anonymous

I am a huge fan of Darren Whittaker. He is a rare Pearl in this country, he actually gets things done. He has an almost Victorian drive, letting nothing stop him. The city centre would be a poorer place without him.

By Elephant

The only people doing well out of this are landowners and developers who wealth is being subsidized out of the public purse.The idea that high rise luxury apartments contribute anything to the visual appeal of the city or it’s economic success is a fallacy with a city centre full of empty shop and restaurant units and huge amount of.homeless people living on the streets.

By Berni Levi

Well said Elephant.

By Anonymous

You only have to look back through PNW articles to see that Renaker receive lending from institutions….£123m from Maslow Capital for Crown Street as an example. They have no issue getting lending on the “open market”. Why not keep the money in Manchester coffers though? Makes sense to me.

Also, these developer loans usually require the developer to forward fund a proportion of the build cost to derisk it for the lender. Some can and some can’t offer this. Envy is an ugly thing

By Anonymous

Keep building invest Manchester is well overdue investment

By Anonymous

The information is readily available from the city council if you ask them. They have to do returns to government on housing delivery targets that they rarely meet despite renekars best efforts. It’s affordable as in provided by RPs etc. but I suspect you are just another troll who doesn’t let the facts get in the way of your I’ll informed views

By Fact check

It’s a forward thinking way of managing and encouraging development….more cities could do this, obviously a cautious approach is taken and its a well managed loan etc so I see no issue. Its enabled huge development in Manchester and its allowed the council to see out its vision for more homes…its actually good to see developers encouraged and bypass the banks for a change…

By Cristoforo

Oh please Bernie, at least do some basic research before commenting. There is there is a lot of information available and it’s much better than just making stuff up based on your own bias.

By Ruth

Height and bulk but the designs are naff on the whole. We are in a boom at the moment, but we aren’t seizing the opportunity to create truly great buildings to enhance. Other cities will build big too in coming years, the novelty will wear off that we have some big towers.

By Plop

Hey Place North West -“ The GMCA says that more than 1,000 affordable homes have been delivered as a result of GMHILF loans.”

There is no public record of this. Perhaps you could hold Mr Boylan to account for this-and ask him to confirm how many of those homes are directly as a result of the loans to Renaker?

By Anonymous

When did Place North West turn into the Manchester Evening News? Looking for sensational negative stories which don’t exist is not normally your style. You say “some industry noses have been put out of joint” yet you can’t directly quote anyone who has an issue with the way GMCA distribute the loan facility. The most critical statement you could come up with is that “The amount Renaker has been loaned was disproportionate but understandable”. Really PNW its hardly Woodward and Bernstein, please can you get back on track reporting North West development news!

“The GMCA wants to lend to a safe pair of hands. I do not lose too much sleep over it,” he said.

By Anonymous

All seems a bit odd . If the developers appraisal does not work on paper I.e gap between cost and value – then public sector can choose to fill the gap . This could be a loan on terms softer than that available in commercial market or more particularly be a grant . Such grant could be linked to scheme performance such that it defaults to an investment if scheme performs better than initial appraisal and then public sector gets share of profit. Hard to believe that these schemes cannot be funded by commercial market . How has this been tested ? Plus have the basic HMT tests been applied eg Additionality – that is would the developer do the scheme without public sector support in the final analysis ?? So don’t offer support and see what happens ? They are asking for it cos it’s there . Try subsidising social / community housing projects instead . Let’s those earning a fortune sort their own loans out.

By Anonymous

I can understand why other developers would be concerned about the loans to Reneker. I am concerned about the monies being given to ” cash strapped local authorities ” and it’s use.

By Paul Martin

None of the trolls doubters or naysayers have answered my very simple question of why cash strapped labour administrations would provide loans to private developers if it wasn’t demonstrably necessary to do so. I could understand the cynicism at one level if it was Tory councils looking after their pals but it is totally the opposite. So what is the answer please?

By Obviously

I know some people have difficulty in understanding how commercial loans work or even capitalism but read the story again. This isn’t difficult stuff really.

By Hardev Thinken

Are these loans available for other developers and ones who have more imanagtive renders?

By Just saying!

Surely its prudent rather than problematic. It’ll have been risk assessed with security provided and with a record of repayment with fees and interest earned. It should be good news good that the money is then lent again to a performing business that is adding to the success and regeneration of Manchester. These aren’t soft loans and are all on commercial terms.

By Alf Full

Obviously at 7.51am – the Greater Manchester Housing Investment Fund is resourced through monies from Central Government in circa 2014. So afraid it is not sourced from “cash strapped labour administrations”. Those administrations through the Combined Authority have met the Government requirements associated with the Housing Investment Fund.

By Anonymous

Thanks anon 10-16…….so the government is involved in the conspiracy too……….or perhaps there are just those good developers who deliver and those who don’t

By Wow

The reason viability is tight and requiring an £88k per unit cheap loan is because Renaker and the City wanted to provide the space within big skyscrapers. A skyscraper is usually a physical solution to an economic problem (expensive land in short supply). The exception being in places like Dubai and China where the civic / national ego demanded a statement). The GMCA funds were needed to make that statement in the absence of oil wealth or CCP support. £88k per unit could have gone a long way in building outright a normal house as opposed to plugging a funding gap on a skyscraper.

By Mancunian

Value for money – it depends on value to who. If it’s about returning money to the council then it works two fold – return of the funds plus population increase i.e council tax.

However – if all these developments are getting bought by non local people, and not helping people (who say are stuck in renting) get on a ladder – immediately renting them out and then needing their yearly yield increases back to investors – then it’s simply pushing up prices. The result is more unaffordability.

By Anonymous

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