GMPVF to target resi schemes
GREATER Manchester’s Pension Fund (GMPF) is to begin investing in residential schemes through its £200m property ventures arm and is increasing its spend on infrastructure projects.
Notes accompanying the fund’s latest accounts state that the £200m Greater Manchester’s Property Ventures Fund has recently begun discussions with one local authority – Manchester City Council – about funding the development of residential units.
“These discussions are at an early stage and if a suitable financial model can be established that would deliver an acceptable return to GMPF on monies invested, then residential development could provide GMPF with a new area of investment activity,” it said.
The company has also upped its exposure to infrastructure assets, setting a target of spending £60m per year on such schemes. It has already committed £102m of funds in infrastructure, £60m of which has been invested while £15m has already been received back. A £35m Special Opportunities Fund remains unspent.
The net asset value of the pension fund grew by 6.4% last year to £11bn – a result which pension fund chairman (and Tameside County Council Leader) Cllr Kieran Quinn described as “a satisfactory return but disappointing when compared with other LGPS funds where the average return was 1.8% higher”.
“There were two main reasons for this relative performance: GMPF is holding a lot of cash because of economic concerns and secondly, one of GMPF’s managers underperformed”.
Cllr Quinn said that the fund is looking to increase the scale of its local investment, as a general lack of available capital is creating opportunities. He said the panel had increased the limit on the amount of money that can be invested locally from 3% to 5%. It has also established “a rigorous evaluation process to assess the commerciality of the investments”.
The Greater Manchester Property Ventures Fund, which is managed by GVA, has an allocation of 2% of the main fund’s value to spend on acquiring sites and developing property.
Its focus is the North West generally and more specifically Greater Manchester. It is currently progressing a number of commercial schemes, including the 12.5 acre Calver Park site in Warrington where an outline planning application is being prepared to transform the site. It is also preparing to develop an office building on a site at Old Haymarket in Liverpool close to Lime St Station, and is marketing the former Royal Mail Sorting Office site in Stockport where it is looking to build a new hotel and offices.
GMPVF is also a joint venture partner with Argent on the 270,000 sq ft One St Peter’s Square scheme in Manchester city centre which is due to start on site soon after recently securing a 65,000 sq ft pre-let from accountancy firm KPMG.
