Chrysalis Fund backs Watson building deal
THE Watson building, which was a key part of Merepark’s Central Village scheme in Liverpool, is to be converted into 80,000 sq ft of grade A office space by a syndicate of investors.
They have secured £4.8m from the European Union-backed Chrysalis Fund, which is designed to kickstart Merseyside property developments with loan finance. It is the fund’s second deal and the first that has been publicised.
The syndicate is also using the business premises renovation allowance (BPRA) – a tax break for investors in derelict buildings which is available in Liverpool and other “assisted” areas.
TheBusinessDesk.com reported last month that contracts had been exchanged on the grade II-listed building which was originally to be the site of a 200-bed Millennium Hotel.
Earlier this month Millennium & Copthorne said its involvement with Central Village, which also included a 200-bed Copthorne Hotel, had “unravelled”, but Altrincham-based Merepark insisted it had alternative tenants. It is not yet known if the new plans for the building will still form part of the Central Village scheme. No one at Merepark was willing to comment.
Merepark bought the Watson building on Renshaw Street and the neighbouring Rapid site in 2008 in a joint venture with the Irish developer Ballymore called Capital Regeneration Limited. In the same year it bought the neighbouring Lewis’s building in a joint venture with previous owners Capital & Counties, a subsidiary of Liberty International. The Watson building bid has been handled by London-based Regent Capital which also raised funds for the Lewis’s conversion through a syndicate.
Managed by Igloo Regeneration, GVA and RBC Capital Markets, Chrysalis provides senior and mezzanine loans to various commercial property and regeneration projects. The money must be spent by the end of 2015, although no more than £8m can be invested in any single project.
Chrysalis chair Jim Gill said: “The building will provide high quality office accommodation in the heart of the city centre. The redevelopment will also provide much needed regeneration for the Lime Street area which acts as a gateway to the city and is often the first impression of Liverpool for visitors when they arrive by train, so the improvement of this particular area is a significant step forward in the regeneration of the city centre.”
The cash for the fund comes from the North West’s share of JESSICA – the Joint European Support for Sustainable Investment in City Areas. Support has also been provided by the European Investment Bank and the Homes & Communities Agency.
The idea behind Chrysalis is for it to become a revolving fund, with profits being reinvested back in to help grow the pot available for regeneration projects. Money invested will sit alongside existing debt provided by mainstream banks and equity put in by project developers.
A £36m Evergreen Fund is doing the same job for the rest of the North West. So far it has backed two projects – £6m for Nikal’s Soapworks office scheme in Salford and £9.5m for Bruntwood’s Citylab’s at the former Royal Eye Hospital in Manchester.
