Q&A with Will Church and React News – July 2020
What have been the biggest successes of the Evergreen 2 fund so far?
We tend not to differentiate between the various Evergreen Funds under our management – these include Evergreen 1 & 2, the Cheshire & Warrington Evergreen Fund and the Low Carbon Fund. All can work together behind the scenes, and it is our job to make sure that there is a seamless source of £140m debt funding for the North West market. Every scheme we support is a success in its own way, from the ongoing support of schemes on the Science Corridor, to the opening up of the first site at Chester’s new CBD, prime offices in Manchester that have become operational 3 or 4 years ahead of when they would otherwise, to provision of infrastructure at Logistics North for one of the biggest logistics and manufacturing hubs in the country to name a few. All the twenty-three (and growing!) schemes together represent nearly £1bn GDV of employment sites that either wouldn’t have been developed, or have been significantly accelerated. The jobs growth that goes with this is what the Evergreen Funds should be most proud of.
What role can the fund play now that development finance has become harder to come by due to COVID-19?
We find ourselves in a similar position to that which we were in when Evergreen was set up; all employment use development sites, no matter how prime, are finding it difficult to attract debt. The difference that we can see now though is there seems to be more equity available from the development community, at least at the moment. There is a very long pipeline of very good development projects that will all contribute significantly to the North West’s economy but that will struggle to attract debt. We can support those and make sure that the best schemes are delivered during whatever economic difficulties we are facing as a region and as a country. We must also point to the construction jobs that these projects could support over the next two years, during a period that rising unemployment has been forecast.
Will the increasing pressures on Local Authority budgets due to COVID-19 make it more difficult to attract investment for development projects across the North West?
The funding that we have in Evergreen Funds is committed so the capital available won’t decrease. What we really hope of course is that the region’s infrastructure bid to the treasury is successful, which will provide even more capital to support the types of project Evergreen will typically be involved in.
What sort of developments are being targeted by the £20m Cheshire & Warrington Urban Development Fund?
We are very much looking at all the Funds in a holistic way and this Fund is no exception. We are developing a combined pipeline with Evergreen Funds, much of which also covers the Cheshire & Warrington region. Employment sites supporting SME businesses and Low Carbon development are high on the agenda, but we would encourage anyone developing employment land in the region to contact us.
Is there an increasing focus on low-carbon investments and funding via the Evergreen and other funds? If so, why?
Absolutely – partly this is driven by the European Union priorities that underpin our funding, but more significantly the region as a whole sees energy efficiency and reducing the associated carbon footprint as one of its main priorities. All local authorities in the region have declared climate emergencies and it is therefore essential that Funds owned by them align with this. Even before the declaration of climate emergencies, stringent energy efficiency requirements were put on Evergreen developments and this has created an established basis from which to work.
What next as the European Structural and Investment Funds Growth Programme comes to an end this year?
The first thing to clarify is that all the Evergreen money is in the UK and ring fenced for the Funds. The capital available today won’t reduce because of this, and is constantly recycled to provide maximum impact for the region. We are already seeing government announcements for the type of funding that could be used in addition to this, and we are watching with interest how the UK Shared Prosperity Fund will be applied to this type of investment over the coming years. There is no shortage of great projects for the Funds to support and the more capital we have to do it with, the more impact we can have.
Senior Director, Investment Advisory
CBRE Capital Advisors, July 2020