Evergreen Fund invests £6m in Soapworks

David McCourt

The financing will allow construction of the second phase of The Carlyle Group's 400,000 sq ft office development in Salford.

The North West Evergreen Fund, which invests in real estate projects in Greater Manchester, Cumbria, Cheshire and Lancashire, provided a loan to the Soapworks regeneration development project owned by global alternative asset manager, the Carlyle Group, and its joint venture partners Nikal and Abstract Securities.

The Evergreen investment will support the delivery of 210,000 sq ft of the proposed 400,000 sq ft grade A office redevelopment of the former Colgate-Palmolive factory in Salford Quays.

Ben Du Boulay, director at The Carlyle Group, said: "To be selected as a recipient and to be granted the maximum amount of funding from the North West Evergreen Fund is a real endorsement of the potential of the Soapworks scheme and the positive impact that the project will have on the regeneration of the Salford Quays area."

The Soapworks will have a gross development value of £70m and the Carlyle Group said the Evergreen-funded part of the project will deliver 1,350 jobs, with future phases providing a further 2,500 jobs.

Construction of development blocks A, B and C will commence in early 2013, with completion expected by the end of that year.

This follows the completion of the first phase of the project in October 2011 – the 20,000 sq ft Boilerhouse already fully let to engineering firm Vital Services.

The final phase of the Soapworks project, Block D, will add a further 170,000 sq ft of office space when it is completed.

The North West Evergreen Fund, which is made up of 16 local authority limited partners, was established to provide funding to support real estate projects which are critical to the region's economy, generating jobs and growth.

It is capitalised through the European Regional Development Fund and other public money allocated under the Joint European Support for Sustainable Investment in City Areas initiative, which is managed by the European Investment Bank in the North West on behalf of the Homes & Communities Agency.

The Association of Greater Manchester Authorities led the application to the EIB.

The Soapworks project exceeded the regeneration targets covering employment, remediation and floor space outputs and was granted the maximum amount that the Evergreen Fund could provide.

The Evergreen model provides loan funding to be invested in projects that 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, the FSA regulated arm of CBRE Real Estate Finance, and co-chaired by Manchester City Council and Lancashire County Council.

Lord Peter Smith, chairman of the association of Greater Manchester Authorities, said: "We will be investing in priority schemes which will deliver real jobs and growth, as well as financial returns, unlocking opportunities and stimulating the success of the region."

Tony Martin, head of investment advisory at CBRE, said: "The Soapworks investment fulfills every criterion for the fund, most particularly that it is expected to be a catalyst for the regeneration and employment prospects for the wider area. We are in advanced negotiations with a number of other parties on schemes of differing sizes and focus, and hope to announce a follow on investment in the very near future."

Cllr Ian Stewart, Salford City mayor, said: "This is a positive example of the public sector working imaginatively with the private sector to deliver growth and development."

Deborah McLaughlin, North West executive director at the HCA, said: "Investment in major schemes like the Soapworks plays a crucial role in helping to revitalise the area and create much needed employment opportunities for local people."

Wragge & Co advised The Evergreen Fund, and Eversheds advised The Carlyle Group.

The architects are ShedKM.

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