Evergreen funding for MediaCityUK Broadway scheme

Peel Media has received a £6.25m Evergreen loan towards the development of 54,000 sq ft of creative offices and studio space.

Peel submitted plans to Salford City Council in October for a 10-storey mixed-use scheme on the E2 plot next to the Booths food store. Four floors are designated as offices, and will be funded by the loan from Evergreen, while Premier Inn has been secured as an occupier to deliver a 112-bedroom hotel on the other six floors.

The Evergreen funding is a mezzanine loan; a junior piece of debt which bridges the gap between traditional senior debt and equity.

The total build cost is around £15m, and the remaining investment is being provided privately. Once approved construction will commence at the end of 2014, with the scheme due for completion by late 2015 and the hotel will open early 2016. The architect is Chapman Taylor.

The investment was revealed in an update ahead of a meeting of the Greater Manchester Local Enterprise Partnership scheduled to take place on Thursday 13 November. However the meeting was cancelled due to the availability issues of members.

The Evergreen fund is currently oversubscribed, with £40m of projects in the pipeline after the initial £43m budget is committed. The report confirmed that the remaining projects would be funded through an Evergreen 2 which is due to go live in 2015.

The property fund update included details of the Growing Places fund, which has committed £31.6m, has a pipeline of £5.3m and a remainder of £17.7m. Evergreen funds need to be spent by December 2015, however there is no time limit for Growing Places.

Andrew Antoniades, director of CBRE Capital Advisors, investment advisors to the North West Evergreen Fund, said: "This is the first mezzanine loan committed by the North West Evergreen Fund. It underscores our ability to be flexible and innovative in the types of loans we can provide, to enable developers to bring forward economically important projects.

"Speculative finance is incredibly scarce in the regions and this must be overcome to deliver sustained economic growth. Such investments are critical for the regeneration of the North West and this loan provides a clear example of how Evergreen can help deliver schemes by financing these funding gaps."

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; £10m for the 4m sq ft Logistics North project by Harworth Estates in Bolton and £30m for Allied London's Cotton Building in Spinningfields.