Development Finance

Manchester | Tuesday 16 June 2015

WelcomePaul Unger

Place North West

BACKING YOUR AMBITION

Glen Wilson

UK Head of Property

LLOYDS BANK - HELPING BRITAIN PROPSER

Creation of LBG Commission on Housing in January 2015. “No one single solution to what is a complex and multi-layered series of challenges. Nor is our country’s housing crisis susceptible to simplistic short-term ‘fixes’. What is required, is a sustained programme which will generate a much expanded supply of good quality homes available both to buy and to rent from a range of sources, at costs that reflect the varying means of all sections of society.”

Lloyds Banking Group has a profound interest in the UK housing market

HELPING BRITAIN PROSPER - NW PROPERTY

2015 Lending balance growthNW debt bookNew May term

facilities drawn2015 Agreed

facilities

Debt facilities of

up to £12.5m

Sole focus on investment and

development

Committed facilities of up to

25 Years

Client centric team of

accredited managers

operating across the NW

£100m£19m £0.492bn 17%

HELPING BRITAIN PROSPER - CASE STUDIES

“Having worked with Lloyds Bank Commercial Banking for more than 14 years now, we knew that they would be keen to support us with this project.”

Eian Bailey, Managing Director, Keyworker Homes Macclesfield

HELPING BRITAIN PROSPER - CASE STUDIES

“This new funding will be a huge boost to us this year, and beyond, as we look at new ways to expand the range of housing we offer.”

Graeme Foster, Chief Executive, Alpha Homes

Greater Manchester Investment Fund

Background – GMCA and Core Investment Team

The GMCA is a statutory body with functions including economic development and regeneration that cover the Greater Manchester area.

It is comprised of the 10 Greater Manchester local authorities:

- Manchester

- Salford

- Trafford

- Stockport

- Tameside

- Oldham

- Rochdale

- Bury

- Bolton

- Wigan

The Core Investment team is a GMCA team and is responsible for a number of investment programmes aimed at encouraging business growth and investment in property and infrastructure.

Funding Position

The table below summarises the status of the active funds as at 31st March 2015.

Funds are currently in the process of being established for the 2014-20 ERDF allocation. £97m will be directed into successor funds to the existing Evergreen and North West Fund, and a dedicated Low Carbon Fund.

£’m RGF2 RGF3GM Loan

FundGrowing places

NW Evergreen

Fund

2014-20 ERDF

Total

Invested 13.1 34.7 3.4 8.8 13.9 -

Board Approved

36.2 34.7 5.3 33.6 55.3 -

Remainder - - 14.7 21.0 5.2 97.0

Total 30.0 35.0 20.0 54.6 60.5 97.0 297.1

Business funds Property & infrastructure

Our Process – projects > £500,000

Expression of interest submitted to the Core Investment team –

response provided within 48 hours

Project is submitted to the Local Enterprise Partnership (LEP) for

endorsement

Business plan is assessed by the Core Investment team

Project is submitted to the Combined Authorities (CA) for approval (the CA meet once a

month)

Applicant submits a business plan in a standardised format

Draft offer letter issuedApplicant commissions due

diligence

Once satisfactory due diligence has been received along with any other conditions specifically noted in the

offer letter, a loan agreement is issued

Project is submitted to the Chief Executive’s appraisal sub group

for approval and consideration of lending terms

Business plan is reviewed by an Independent Advisory Panel

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Why use Evergreen/Growing Places?

Collaboration• Funding where

traditional finance cannot be obtained.

• Works in tandem with other forms of funding.

• Welcomes schemes with grants.

• Quick decision making .

Flexibility• Competitive costs of

debt.• Flexible terms;• Various methods of

funding:– Senior debt– Clubs &

syndication– mezzanine.

• Flexibility around cash flow timings.

Experience• Experienced teams

originating and managing debt investments.

• Finance and real estate expertise.

• Experienced legal advisors.

• Clearly defined processes.

• Market standard loan documents.

• Eligibility assessment.

Benefits for Developers

13

CBRE | EVERGREEN | FUND BACKGROUND & UPDATE

CASE STUDYThe Cotton Building (iplus), Manchester

The Cotton Building

Speculative Development

£15m loan from Evergreen and Growing Places

Total development costs of £40m

Mezzanine funding by Pramerica

Due to commence March 2014 and complete March 2016

Match funding - £10million Private Sector Investment

13,660 sq/m commercial floorspace

BREEAM Excellent

22,000 sq ft of existing brownfield land will be re-used

The scheme will deliver in the region of 910 jobs

Borrower Allied London

Nature of loan Senior Debt

Size of Loan £10,000,000 Evergreen and £5,000,000 Growing Places

Location Spinningfields, Manchester

Future

• To build upon the success of the existing funds and maintain momentum.

• Fund will be enhanced by the proposed Evergreen II (£50m) and Low Carbon (£15m) subject to UK Government / EU discussion.

• New funds expected to be operational from 2016.

Q&A

• Glen Wilson Lloyds Bank• Bill Enevoldson Greater Manchester Combined

Authority• Eian Bailey Keyworker Homes• Nick Lee NJL Consulting• William Church CBRE, NW Evergreen Fund

Development FinanceLunch

Manchester | Tuesday 16 June 2015