New £35m commercial property fund supports developers in the North East

Commercial property development across the North East is set to increase thanks to a new £35m fund launched today.

The North East Commercial Property Investment Fund is managed by FW Capital and backed by the North East Local Enterprise Partnership (LEP). The fund addresses a gap in the market and will drive economic growth and create new jobs in the North East LEP area.

Providing loans of up to £7m the fund can support speculative developments for new or refurbished commercial projects. This includes industrial units, distribution facilities or office schemes located in the seven authority areas: Northumberland, County Durham, Gateshead, Newcastle upon Tyne, North Tyneside, South Tyneside and Sunderland.

Repayments will be reinvested in new schemes, creating a total investment of £119m into commercial property in 15 years. It aims to create 5,600 jobs and develop 140,000 sq m of commercial space.

FW Capital North East fund director, Joanne Whitfield said: “We are delighted to work with the North East LEP to launch the North East Commercial Property Investment Fund which will support a wide range of commercial property operators. Developers often find it difficult to access the finance they need to bring forward projects, particularly if there are no pre-lets in place.

“The new fund supports speculative developments to help overcome these challenges and answers a critical need to improve the quality of the real estate stock in our region. The cost/value/risk equation continues to inhibit activity at a time when the pace of change is accelerating.

“We believe the new fund can play a central role in solving this problem and help our region compete for inward investment nationally and internationally.”

Helen Golightly, OBE, chief executive at the North East LEP added: “Job creation and the growth of key sectors in the North East are being held back by the market not delivering sufficient high-quality business premises. There is a severe undersupply of Grade A commercial space which is limiting some types of inward investment or current regional businesses to scale to the next level.

“The North East Commercial Property Investment Fund will finance property and regeneration projects throughout the North East LEP area in line with the North East Strategic Economic Plan objectives. It backs high-quality developments and supports developers to build commercial properties needed to secure business investment in the region.”

By Mark Adair – Correspondent, Bdaily

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