The first phase of the developer’s £120m Castle Irwell scheme in Salford is to be funded through the neighbouring council’s asset investment programme.
The £19m development loan facility agreed between Salboy and Trafford Council is intended to fund the construction of the first 157 homes of the wider 500-home development.
Trafford’s £500m asset investment fund is managed by consultancy CBRE. To date, the council has provided £67m in loan financing to e-commerce firm The Hut Group to build a logistics hub near Manchester Airport, and £44m to Salboy’s The Crescent residential scheme, which is due to be repaid in full this financial year.
Trafford’s most recent commitment to Salboy, at Castle Irwell, takes the total amount paid out from the loan fund since 2017 to £377m.
In February, the council’s investment management board agreed to increase the fund by an additional £100m up to a maximum of £500m.
The fund was set up to boost the council’s revenues through interest on repayments, and the investments made to date are forecast to generate £7.43m of additional revenue this year, according to the council.
A spokesperson for Trafford Council said: “The council has agreed an investment facility of up to £19m with Salboy as part of our investment strategy for the Castle Irwell development.”
Salboy declined to comment.