Allied London has been given a £16.5m senior loan from the North West Evergreen Fund, to finance enabling work at St John’s scheme in Manchester.
The loan will go towards the refurbishment of the Bonded Warehouse into workspace and retail, as well as the pre-development and infrastructure works for the wider St John’s development, including Manchester Goods Yard, also workspace and retail-led, as well as the residential elements St John’s Place, One Granada Studios and the South Village.
The Evergreen Fund is managed by CBRE’s debt investment advisory team, part of CBRE Capital Advisors.
This loan is the Evergreen’s fifteenth since its inception, providing £200m of finance, after recycling and reinvesting its capital. Evergreen forms part of the North West’s share of allocations from the European Regional Development Fund.
The Evergreen backing of St John’s demonstrates that it is still difficult to get developments even in prime city centres, out of the ground without public sector support. Allied London also used Evergreen funding to build offices No1 Spinningfields, and XYZ, and other Manchester schemes under construction backed by the fund include Worthington’s 125 Deansgate.
According to Andrew Antoniades, head of debt investment advisory at CBRE Capital Advisors: “This funding has been secured to enable works on the site and for a speculative office development. Both are types of work that traditional lenders are more reluctant to fund. Pre-letting is almost always required to access bank funding.”
Michael Ingall, chief executive of Allied London, said: “St John’s is a major development project; our current intention is to develop the entire project in one extended phase which will involve significant development funding. Whilst we put all the pieces into place, we have secured funding from Evergreen for early infrastructure and enabling works together with the development of the Bonded Warehouse, which will be the initial anchor building for Enterprise City, due to open in early 2018.”