The Chrysalis Fund is providing a £4.8m loan towards the £15m redevelopment of the grade 2-listed Watson House on Renshaw Street in Liverpool city centre.
The £4.8m loan will be provided to a syndicate of investors organised under the national Business Premises Renewal Allowance scheme. The Chrysalis loan will be matched with £4.8m by the syndicate, with further funding from other investors.
The syndicate will redevelop the vacant Watson House, bringing it back to life and back into economic use.
It will comprise around 80,000 sq ft of new Grade A office accommodation, built to BREEAM 'Very Good' standard. Watson House was formerly known as the Watson Building.
The applicant for the money is Regent Capital, based in London, which raises finance using the Business Premises Renewal Allowance tax scheme.
Watson House adjoins the former Lewis's department store which is undergoing extensive refurbishment works to provide leisure and retail space, a boutique hotel and office accommodation as part of the wider Central Village masterplan, which has secured high profile tenants including Odeon Cinema and Frankie & Benny's.
The Chrysalis Fund was set up to support economic regeneration in the Liverpool city region. The initiative is backed by the European Investment Bank and European Regional Development Fund under the Joint European Support for Sustainable Investment in City Areas, or JESSICA, programme.
The fund is managed by the Igloo Consortium, which is made up of Igloo Regeneration Limited, GVA and RBC Capital Markets and operates in partnership with the Liverpool City Region LEP and local authorities.
Jim Gill, chairman of the Chrysalis Fund, said: "Chrysalis aims to invest where the market currently has no capacity or appetite and in a way that attracts other sources of finance and to invest. Projects like Watson House would not be brought forward if it wasn't for the ability of this fund to invest in this way.
"The building will provide high quality office accommodation in the heart of the city centre.
"The redevelopment will also provide much needed regeneration for the Lime Street area which acts as a gateway to the city and is often the first impression of Liverpool for visitors when they arrive by train, so the improvement of this particular area is a significant step forward in the regeneration of the city centre."
Mayor of Liverpool, Cllr Joe Anderson, said: "This is great news for Liverpool, and another fantastic example of how we are unlocking vital funds to bring our historic buildings back into use.
"This investment will breathe new life into Watson House, creating high quality office space in the heart of our city, providing another dynamic link to Central Village and adding further momentum to our on-going work to regenerate the Lime Street gateway."
This is the first loan announced by Chrysalis, with others expected to follow in the coming months.
It is hoped that the redevelopment of Watson House will lead to further progress in the stalled Central Village scheme and unlock later phases.
Balfour Beatty subsidiary Maunsell replaced Merepark Construction earlier this year on Central Village and will start on these speculative offices at Watson House when work on the old Lewis's building concludes.