Evergreen fund makes its entrance

The North West Evergreen Fund has started looking for property development opportunities across Greater Manchester, Cumbria, Cheshire and Lancashire.

The initial £30m pool comes from public money allocated from the North West's share of the European Regional Development Fund under Jessica – the Joint European Support for Sustainable Investment in City Areas initiative, which is underwritten by the European Investment Bank and administered in the North West by the Homes & Communities Agency.

The joint European Commission and European Investment Bank initiative, first announced in 2009, allows EU member states to make repayable investments in projects that form part of an integrated sustainable urban development plan.

Fund manager CBRE said Evergreen will provide capital for projects at competitive commercial rates, where funding sources are currently proving difficult to find in the ordinary commercial capital markets. Money from the repayment of these loans will be recycled back into the fund to finance new projects. The fund will commit capital to commercial and light industrial regeneration opportunities, which meet ERDF regeneration targets covering employment, remediation and floorspace outputs.

Developers with commercial property or infrastructure projects that can both drive regional economic growth and generate a financial return are now able to apply to CBRE for loans or potentially equity commitments of up to £6m per project.

The first proposal is believed to be at an advanced stage of preparation to provide funding to an office-led regeneration scheme. CBRE is eager to generate additional interest from other developers with experience in the North West who require funding in order to kick-start suitable regeneration projects.

In Greater Manchester, the councils and the Local Enterprise Partnership are seeking to align the Evergreen fund with a range of other public funding streams such as the Regional Growth Fund and Growing Places Fund within a wider investment framework. The aim is to prioritise projects which will deliver economic growth and jobs in GM and to deploy the various funds in such a way as to de-risk or accelerate delivery of those projects.

Tony Martin, head of investment advisory at CBRE, said: "The North West Evergreen Fund aims to underpin the region's long-term growth and stability through an innovative mix of public and private funding. It will give developers the opportunity to secure much-needed finance for strategic sites that will make a significant contribution to the success of the North West's economy. The fund is looking for projects that could promote sustainable employment, rejuvenate industrial areas or create new opportunities for communities across the region."

Sir Howard Bernstein, chief executive of Manchester City Council, added: "At a time when there is reduced access to public resources and difficult market conditions, we need to be working even more closely with the private sector to facilitate the delivery of our key priorities and projects to bring jobs and growth to the region. A new approach to investment is required that enables us to move away from a grant culture to a self-sustaining investment approach.

"The North West Evergreen Fund is a crucial tool available to us to minimise the impact of the funding and market challenges we all face."

The North West Evergreen Fund is made up of 16 local authority limited partners spanning Greater Manchester, Lancashire County Council and Cheshire County Council. The fund could increase substantially over the next 10 years through private sector involvement as well as the potential to include other pools of public sector capital sources.

There is a separate £30m fund for Merseyside, called Chrysalis, which is due to be launched at an event on Thursday.

The Jessica funds have until the end of 2015 to allocate money to projects. The funds must be repaid within ten years of the launch, in March 2022.

• Initial submissions should be made to Nick Harvey-Jones, director of CBRE Real Estate Finance at evergreen@cbre.com or on 0207 182 2000.