Allied London has secured a trio of financiers to provide £120m of debt for its flagship 1 Spinningfields project in Manchester.
Lloyds Bank is providing the senior loan, which totals nearly £100m, with Pramerica’s debt fund Real Estate Capital IV adding a further £8m of mezzanine. The North West Evergreen Fund – a JESSICA fund backed by 16 local authorities – will provide a further £12m, which will sit junior to the Pramerica debt.
The deal marks the largest development loan for a project in the North West since a deal was struck to fund 3 Hardman Street, Spinningfields, in 2007.
The 343,000 sq ft development signed accountant PwC on a 50,000 sq ft prelet, moving 750 staff from Barbirolli Square to the fifth and sixth floors.
However, with 293,000 sq ft remaining to be built speculatively at 1 Spinningfields, the deal marks a revival in the appetite of major banks for exposure to speculative regional development.
Allied London chief executive Michael Ingall said: “This funding package is all about confidence in Allied London, Spinningfields and Manchester. No.1 Spinningfields is going to be one of the best commercial buildings in the UK regions, offering not just world-class work space but dynamic communal spaces.”
1 Spinningfields is the final element of the Spinningfields Estate, and at 20-storeys the tallest commercial block built in Manchester for 50 years. Construction started last month and is due to complete in 2017.
Pramerica financed Allied chief executive Michael Ingall’s management buyout of Capital Holdco in 2013, in a move that gave him full control over Spinningfields.
CBRE Capital Advisors advises the JESSICA Evergreen Fund.
Director Andrew Antoniades said: “While lending on developments in the regions is slowly returning, it remains incredibly selective. Such investments are critical for the regeneration of the North West.”
