The Cambridgeshire and Peterborough combined authority has appointed CBRE to help it set up a fund for housing and infrastructure that could be valued at more than £600m.
The two-month-old entity, charged with co-ordinating £770m of government investment into the area, has appointed the firm to help it explore options for the creation of an “evergreen” fund to “promote growth” and help it deliver 100,000 homes over the next 20 years.
The fund will be independently incorporated and seeded with £20m a year in central government subsidy across a 30-year period. This long-term guaranteed income stream could then be leveraged with private institutional capital to bring the overall pot to £600m from day one. CPCA and CBRE are expected to go to the market for the funding in September.
The “evergreen” nature of the project means that investments will, where possible, be commercial in nature and recyclable into future projects.
CPCA chief executive Martin Whiteley said that the authority was already conducting feasibility studies into investing in a housing factory. The authority would also look at making loans to small-to-medium-sized housebuilders in order to boost output, against the backdrop of a housing shortage in the region.
Whiteley said: “CBRE is advising us that we can raise a substantial fund using institutional money. Intervention can take different forms. We have agreed to explore the potential for off-site production, and whether we should pursue that as a commercial interest.”
A separate grant programme of £170m is being used to pay for 2,500 affordable homes across the area.
James Palmer, mayor of Cambridgeshire and Peterborough Combined Authority, said: “We’re at very early stages, but are looking at using investment bonds to leverage the money the government is giving us.”
He said that proposals for deploying the fund would need to be backed up by a “strong, clear business plan”.
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