Evergreen fund ‘significantly oversubscribed’
The European urban regeneration investment fund for the North West is on course to fully commit its £43m budget, with a further £41m of demand waiting to be satisfied.
The report from Eamonn Boylan, chief executive of Stockport Council, ahead of the Greater Manchester Combined Authority meeting this Friday, shows that the Evergreen fund is significantly oversubscribed, with the councils investigating alternatives which could include the launch of an Evergreen Fund 2.
As of January 2014 there was £37m committed from Evergreen, with another £6m of approved projects and a further £41m in the pipeline. The report revealed that "if all projects in the pipeline were to be delivered, there would be insufficient funding within the current funding stream."
According to the report, there is allocation available within the European Regional Development Fund programme for a second Evergreen, which would have a similar governance and structure to the current fund but would include a low carbon priority element.
Evergreen fund manager CBRE confirmed that it was in talks with all parties to look at the future of the fund.
The £34.6m Growing Places Fund is also on course to be oversubscribed, Boylan added, with a model currently being examined by the council which could boost the fund by up to £20m. This would require local authorities to lend funds directly to applicants and be reimbursed at a future stage through receipts from the fund.
The report said: "The Growing Places and Evergreen loan books are strong, both in terms of the financial strength of the applicants and the level of security provided."
Evergreen was launched in 2011 to stimulate the development market in the North West, outside Merseyside which has its own fund, Chrysalis. Evergreen's investments so far include a £6m loan to the Soapworks 400,000 sq ft office development in Salford by Carlyle, Abstract Securities and Nikal Developments; £9.5m alongside Lloyds Banking Group into Bruntwood's 100,000 sq ft Citylabs centre in Manchester's Oxford Road; and £10m for the 4m sq ft Logistics North project by Harworth Estates in Bolton. Recipients of a further £11.5m of loans are due to be announced in the coming weeks.
The initial £30m Evergreen fund came from public money allocated from the North West's share of the ERDF under JESSICA – the Joint European Support for Sustainable Investment in City Areas initiative. Since launch it has received a further £13m from other pools of capital including additional ERDF investments.
The North West Evergreen Fund is made up of 16 local authority limited partners spanning Greater Manchester, Lancashire County Council and Cheshire County Council.
