SCR JESSICA FUND COMPLETES FIRST CYCLE OF INVESTMENT AS ALL FUNDS ARE REPAID
£25.5m of funds repaid since Fund inception in 2013
The SCR Jessica Fund, established in 2013, has now had its first round of investments fully repaid and is reinvesting over £25.5 million back into the Sheffield City Region economy. This represents a big milestone for the Fund which was originally established with £22 million of capital. With the repaid funding over the last year a further three loans of £4.5 million were made at the end of 2018, taking the total commitments in the City Region to £40.5 million over the last five years.
One of the most significant repayments in 2018 was a £4 million loan in support of a 75,000 sq ft unit at the Advanced Manufacturing Park in Waverley, which is now leased to McLaren for 20 years. The unit was completed in May 2018 and will be home to over 200 employees that will be developing the ultra-lightweight carbon fibre tubs that are used to make the McLaren sports and supercars.
The total £40.5 million of investments will equate to a GDV of £87 million in the local economy when completed and the 780,000 sq ft of employment space created will accommodate an estimated 3,100 jobs in the Sheffield City Region.
Some of the Fund’s landmark investments include the redevelopments of Steel City House and the former National Union of Mineworkers offices in Sheffield. Other projects funded to date include industrial developments at Doncaster Sheffield Airport, and at Gateway 36 in Barnsley as well as commercial development at Little Kelham and the construction of a new 78,000 sq ft office building at St Paul’s Place in Sheffield.
Demand from the market remains strong with a pipeline of projects totaling in the region of £30 million and the Fund continues to review applications for 2019.
Initially funded with the European Regional Development Fund (ERDF) and Growing Places capital and then benefiting from significant capital investment by the Sheffield City Region, Jessica aims to provide capital for projects at competitive commercial lending rates where ‘traditional’ funding sources are proving difficult.
Money from the repayment of loans is reinvested to finance new projects. The Fund commits capital to regeneration opportunities with a focus office and industrial or mixed-use developments, which meet the Fund’s targets on creation of new employment opportunities, remediation and creation of new floor space. The fund is managed by CBRE Investment Advisory, part of CBRE Capital Advisors.
Since its inception five years ago, the Fund has continued to meet its investment objectives and has facilitated the development of numerous important projects in the Sheffield City Region in the face of a challenging market. The investments have accelerated economic growth and the creation of new employment space. Last year proved to be a very good year for the Fund, with the initial allocation now repaid in full and we look forward to supporting some exciting new projects in 2019.
John Mothersole, Chair of the JESSICA Investment Board commented: “When we created the SCR JESSICA Fund it was somewhat a leap of faith as only a very limited number of property Investment Funds of this type had been established in the UK, but we knew there was demand and we were keen to be innovative. Our decision has proved a great success to date both in terms of financial returns and perhaps more importantly in creating the employment space to enable our economy to grow. The SCR JESSICA is a clear demonstration of a successful private and public partnership where we now have a growing Fund to support the growing private sector in our region”.
Ben Morley, Project Director, Sheffield City Council commented: “Having established the Fund in 2013 without a pipeline to invest in, the Fund has performed above expectations. The fact that we are now in the second round of investments demonstrates the need for the Fund of this type was justified and having secured additional funding from the SCR Combined Authority means the Fund has even greater capacity to support much need speculative developments that attract inward investment and allow companies to grow.“