Sean Davies, head of finance - commercial and public sector reform, Manchester City Council; and Andrew Antoniades, director, CBRE capital advisors, investment advisory

1. Greater Manchester Investment Strategy
with Focus on North West Evergreen Fund

2. Background

3. GMCA
Background
 The Greater Manchester Combined Authority is a statutory body with functions including economic
development and regeneration that cover the GM area.
 It is comprised of the 10 Greater Manchester local authorities:
- Manchester, Salford, Trafford, Stockport, Tameside, Oldham, Rochdale, Bury, Bolton and Wigan.
 The GMCA’s Core Investment Team is managing investment programmes currently totalling £120m.
Promoting economic growth
 The GM strategy is the foundation of how the GM investment fund operates. It provides how GM
looks to create the conditions for growth to ensure that GM is a place in which to invest, do
business, live, and visit through:
- Revitalising our town centres
- Creating safe, sustainable, healthy places with a high quality residential offer
- Providing the land to support growth
- Delivery of the infrastructure to support growth
- Providing the skills needed by a modern economy.
 GM funding is therefore targetted at those schemes that provide the greatest gross value added
(GVA) impact, most clearly evidenced through new jobs created.

4. BusinessInfrastructure
Investment strategy
Low Carbon
Our investment strategy is targeted across three areas
Projects that typically
support the development of
strategic sites thereby
creating jobs for Greater
Manchester.
Projects that typically
support the expansion of
business thereby creating
jobs for Greater
Manchester.
Projects that support the
transition of Greater
Manchester to a low carbon
economy (e.g. heat
network, retrofit or street
lighting).
Available funds
Growing Places
European Regional Development Fund
Evergreen
Available funds
Regional Growth Funds
Greater Manchester Loan Fund
Growth Hub
Available funds
Regional Growth Funds
Greater Manchester Loan Fund
Upcoming 2014-2020 ERDF
programme
- Greater Manchester has several funds available to deliver this strategy.
- Focus is on investment rather than grant so as to recycle the funds and
extend their impact.

5. Types of funding
PROPERTY BUSINESS
Growing Places RGF 2 & 3
 £34.6m initially allocated to Greater
Manchester, subsequently increased to
£55m.
 c.£20m remaining with no time limit for
spend.
 Funding is for property and key
infrastructure projects.
 Fund is very flexible - broadly designed
to unlock wider economic growth by
accelerating the building of homes,
office and commercial development
space.
 Debt product but can take senior or
junior position.
 Loan size £1m to £5m, similar appraisal
criteria to Evergreen.
 £65m allocated to Greater Manchester.
 Key requirement is the creation or
safeguarding of more than 3,500 jobs
(benchmark of £20,000 per job is
applied to projects).
 Funds to be committed by 31 March
2015.
 Preference for some matched funding
(debt or equity).

6. Funding – Criteria and our offering
What we look for
 Proposals that have been turned down by the Bank but can demonstrate their viability and offer a clear
exit.
 Projects which can raise some but not all of the financing required. The GMIF is used to bridge the
funding gap.
 Projects that demonstrate clear outputs (jobs, commercial space and/or residential units) that will
benefit Greater Manchester.
 Loan size £0.5m-£5.0m.
Our offering
 Loan funding on commercial terms (European reference rates).
 Quarterly monitoring of outputs.
 Will rank behind other lenders on security although level of security offered is a determinant of the
interest rate applied to the loan.
 No financial covenants.
 Ability to subsidise the interest subject to EU State Aid provisions (typically by up to €200k over 3
years).

7. Current position
Committed funds
 Demand for Growing Places funding has been strong with the majority of the fund being committed.
 To date, £31.6m has been committed across 9 projects.
 £10.5m of these monies are being co-invested alongside the North West Evergreen Fund

8. Evergreen Fund:
1. Focus on Structure

9. 9
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
 Evergreen provides development debt funding for commercial property and regeneration projects in
NW England at highly competitive commercial rates.
 Kick-start construction, generate jobs and deliver sustainable developments in Greater Manchester,
Cumbria, Cheshire and Lancashire.
 Funding currently stands at £49m.
 Enhancing long-term growth prospects and competitiveness of the NW’s economy:
• Enterprise.
• Employment.
• Regeneration and sustainability.
Establishment
FUND BACKGROUND
 Funded by the ERDF programme and
the HCA.
 16 Local Authority Partners.
 CBRE: Investment Advisor to
Evergreen.
Support

10. 10
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
 Additionality: provide funding where traditional debt cannot be obtained.
 Not grant funding: exit strategy required.
 £49m at present (next round further funds committed).
Assists eligible projects that are viable but cannot obtain financing from traditional sources
PRINCIPLES AND CAPACITY
What does Evergreen invest in?
Fund-Level Criteria:
JESSICA funded projects must be eligible.
 Outputs:
 Employment / job creation.
 BREEAM Excellent space.
 Brownfield regeneration.
Financial
 Ideal loan size £4m - £10m (higher in club
loans).
 Reasonable leverage.
 Clear exit & opportunity for fast repayment.
 Clear capital structure / meaningful equity.
Transaction-Level Criteria:
 Office, industrial, hi-tech manufacturing,
logistics.
 Greater Manchester, Cumbria, Cheshire and
Lancashire.
 Complimentary funding.
 Committed during 2014 & spent by end of 2015.
Scheme
 Scheme viability.
 Developer experience and skill.
 Planning consent / land assembly.
 Ideally, pre-lets / occupier interest.
What do we look for in transactions?

11. 11
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
Benefits for Developers
WHY USE EVERGREEN?
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 cost of debt.
 Flexible terms.
 Various methods of funding:
 senior debt.
 clubs & syndication.
 mezzanine.
 Flexibility around cash flow
timings.
Experience
 CBRE as investment
advisor:
 Originating and managing
debt investments.
 Finance and real estate
expertise.
 Clearly defined processes.
 Market-standard loan
documents.
 Ekosgen: eligibility
assessment.

12. 12
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
Evergreen Fund:
2. Case Studies

13. 13
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
CASE STUDY
The Cotton Building
The Cotton Building
 Speculative Development
 £15m loan from Evergreen and Growing Places
 Total development costs of £40m
 Mezzanine funding by Pramerica
Borrower Allied London
Nature of
loan
Senior Debt
Size of
Loan
£10,000,000
Evergreen and
£5,000,000 Growing
Places
Location Spinningfields,
Manchester
“
“The availability of Evergreen and Growing
Places finance has enabled us to bring
forward our vision for the Cotton Building in
a market where development funding for
speculative schemes is still challenging to
secure.” ”
Freddie Graham-Watson, Group FD, Allied London.

14. 14
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
CASE STUDY
The Hub
The Hub
 Joint Evergreen and Growing Places loan
 Manchester Science Park speculative development
 Strong occupier interest not yet formalised
 Evergreen required to kick start development
 Evergreen £4.5m matched by Growing Places £2.5m loan in
club deal
 Total development cost £9m
 Preparing to start on site
Borrower Manchester Science
Parks
Nature of
loan
Senior Debt
Size of
Loan
£4,500,000 Evergreen
plus £2,500,000
Growing Places
Location Manchester
“
“The role that Evergreen can play to
support schemes that will enhance the
local economy is incredibly important and .
will bring a number of long-term benefits to
Manchester". ”
Eric Day, Relationship Manager, Lloyds Bank.

15. 15
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
CASE STUDY
City Place, Chester
City Place
 Originally a stalled scheme
 Developer not able to commit 100% funds
 Bank would not lend, due to no proven market
 Cheshire West and Chester Council provided Put Option
 £4.8m match provided by developer, some ERDF grant
 On site now
Borrower Muse Developments
Nature of
loan
Senior debt
Size of
Loan
£4,800,000
Location Chester
“
“Muse has worked closely with Evergreen
since its inception, and we are delighted to
be able to start construction works on City
Place, Chester. The collaboration of
Evergreen and Cheshire West and Chester
Council has enabled Muse to progress this
catalytic scheme in a challenging market.” ”
Phil Mayall, Muse Developments Limited.

16. 16
CBRE | EVERGREEN | FUND BACKGROUND & UPDATE
CASE STUDY
Cutacre (Logistics North)
Logistics North
 Joint Evergreen and Growing Places loan
 Funding infrastructure to release up to 87 Ha distribution hub
 Aldi is building a 500,000 sq ft distribution centre
 Evergreen £7m matched by Growing Places £3m loan in
club deal
 On site now
Borrower Harworth Estates
Nature of
loan
Infrastructure, senior
debt
Size of
Loan
£7,000,000 Evergreen
plus £3,000,000
Growing Places
Location Bolton
“
“Evergreen funding will be instrumental in
enabling us to deliver what will be the
premier logistics location servicing the
North West. The loan we have received
will fund the construction of roads, ground
works, power, drainage and utilities and
we will begin works in the summer.
Having local authorities and funds such as
the North West Evergreen Fund
championing key regeneration projects in
the North West of England is crucial to the
continuing growth of the region.” ”

17. The Future

18. Funding
 Given the level of transactions completed to date, and the pipeline of future projects, the Growing
Places fund size has been increased by a further £20m to £55m overall.
 Similarly, Evergreen’s success has also led to the fund size increasing to £49m.
 In the medium term, the capital received from existing loans will be made available for reinvestment.
 This funding will be enhanced by the proposed Evergreen II (£60m) and Low Carbon (£15m) funding
streams for GM investment that will be targeted along similar lines to the successful Evergreen I fund.
 It is intended the new funds will be operational from early 2015, although there is still some remaining
capacity currently for any suitable schemes.
 Should the funding market move and there is increased appetite from banks to fund developments
then GM funds will also move accordingly; GM funds are able to operate at difference points in the
capital stack.
 Strong pipeline of schemes.

19. Contacts
Andrew Antoniades, ACA
Director, CBRE Capital Advisors
T +44 207 182 2587
Email: andrew.antoniades@cbre.com
For more information regarding this presentation please contact:
Evergreen enquiries
Sean Davies
Head of Finance, Manchester
T: 0161 234 1647
Email: s.davies3@manchester.gov.uk
Manchester