The South Yorkshire Pension Fund, which launched in March 2019 with an allocated £80m for regional investment in South Yorkshire, has provided its first loan.
The Fund has provided an £8m debt facility to support the development of 52 low carbon homes in Little Kelham, Sheffield. The loan will fund the second phase of homes at this already successful regeneration site, which was historically an industrial area of Sheffield.
The site has undergone significant redevelopment since it was acquired by leading sustainable Yorkshire developer, Citu, in 2012 and is now a thriving new community featuring low carbon homes, offices, bars, restaurants and refurbished listed buildings.
Each of the 52 sustainable homes will be heated by carbon neutral renewable energy and is situated a short walk or cycle from Sheffield city centre, further mitigating the impact on the local environment.
Following the success of the SCR JESSICA Fund over the last five years, which has seen £40.5m invested into the Sheffield City region since 2013, the South Yorkshire Pension Fund has allocated £80m for regional investment in South Yorkshire.
This funding line will support the ongoing economic growth of the region and will work alongside the SCR JESSICA Fund, increasing regional development funding for the South Yorkshire/ Sheffield City Region to over £120m. CBRE’s Investment Advisory team, part of CBRE Capital Advisors, manages both Funds.
The two Funds will operate independently from each other, with the South Yorkshire Pension Fund having complete autonomy over investment decisions. However, opportunities to make strategic joint investments will be a focus and will enable investments into larger scale projects as well as into alternative sectors, including residential and leisure.
Will Church, senior director, CBRE Capital Advisors, said: “This loan is significant as it builds upon a loan the SCR Jessica Fund made four years ago for the existing commercial space at Little Kelham, a strategically important site for the region.
“The creation of the South Yorkshire Pension Fund broadens the investment scope of SCR Jessica and has enabled investment into alternative sectors whilst staying true to the core principals of investing in low carbon projects that support regional growth.”
Coun Mick Stowe, chair of South Yorkshire Pensions Authority, said: “We are pleased that the first loan being made from this allocation supports the regeneration of such an historic site in Sheffield and involves the delivery of much needed housing constructed in a way that is adapted for a low carbon future. This shows that it is possible to both achieve our objective of making a financial return for our scheme members while delivering benefit to our local area.”
Fraser Stride from Citu said: “We’d like to thank the Fund for enabling us to take forward the next phase of Little Kelham following the huge success of phase one which has helped transform this part of Sheffield into a new neighbourhood where people can live, work and spend their leisure time.
“Directing local money into a local project is always a positive investment, and it also shows real commitment from the City Region to support a sustainable way of housebuilding that will benefit generations to come.”