£25.4m funding deal for latest Thorpe Park development
The next phase of Thorpe Park Leeds is moving forward following a deal between developer Scarborough Group International and OakNorth Bank – the UK bank powered by OakNorth.
The bank has been provided a £25.4m loan to a subsidiary of the developer which was founded by Kevin McCabe in 1980 to support the delivery of a new nine floor, 133,118 sq ft office building at the office park on the outskirts of Leeds.
The deal follows the announcement by Scarborough Group that Lowell, one of the biggest credit management companies in Europe, has agreed a 15-year lease to occupy the new building. The letting marks the largest single out of town office deal ever recorded in West Yorkshire and the biggest property transaction in the Northern Powerhouse region over the last 12 months.
Kevin McCabe
Kevin McCabe, founder and chairman of Scarborough Group International explained how the deal came about.
“We’d been working on structuring the Lowell deal for 18 months, because it’s obviously such a large project and when we were close to concluding the formal agreement for lease with Lowell, that’s when we started to look for project finance and work with OakNorth Bank.”
The property professional added that the fact OakNorth Bank had operations in Yorkshire already headed up by James Espley director of debt finance at the bank made them an attractive partner.
“The fact that OakNorth Bank’s got someone on the ground who understands Thorpe Park was a big bonus. It means rather than dealing with lads and lasses in London which is where most of the finance comes from, they’ve actually got someone on the ground, who can tell colleagues in London what they need to know and give a proper overview of the development, market etc.”
James Espley
Espley added that having watched as Thorpe Park has taken shape over the years he’s pleased that OakNorth Bank is able to support Scarborough and the wider region with this investment.
He said: “There’s not many banks around at the moment who are funding development full stop, and certainly not commercial development and that’s one of the things that attracted me to OakNorth Bank is that they are. Funding commercial development is one of the rewarding parts of the job , when you see something like this new unit for Lowell, coming out of he ground and how happy everyone is with their new premises and the 2000 staff who will be employed there – it feels like you’re making a difference to the region and the economy.”
Longer term both parties hope that this finance deal will be the first of many.
McCabe said: “I expect and hope this to be the first project we do in what will be a growing partnership and that OakNorth Bank will work with us on perhaps a dozen projects overtime at Thorpe Park. The bank’s relationship with Scarborough and some of our partners including Legal and General I expect to be top class and I’d say that it’s a relationship that will probably last 20 years.”
Espley echoed the sentiment adding “That’s exactly what we’re about, it’s relationship banking back to its roots and that’s exactly what we want and the type of clients we want – people we can grow with and build with and see the type of thing I’ve got going on at Thorpe Park come to fruition.”
The future opportunities for the partnership certainly are exciting with Scarborough also working on the Olympic Legacy Park in Sheffield and recently announcing its masterplan for the site as well as developments on the other side of the Pennines in Manchester.
So both developer and funder are optimistic about the future partnership, but also the opportunities coming to the North.
Espley adds: “With all the talk of stuff coming out of London and into the region – from the Infrastructure Bank to Leeds to the announcement about the Department for Transport. the regions are growing in popularity. As a result so is the commercial market and I see there’s a lot of growth potential in Yorkshire.”
McCabe concluded: “The Northern Powerhouse initiative instigated by the government five or six years ago is really working, there’s no question! We’re seeing a trend in civil servant job moves coming to the north and that ain’t going to stop.
“I think ourselves and organisations involved in the north of England including OakNorth bank are on the bandwagon to ensure that the UK economy is actually, a big chunk of it, is regenerated in the north of England, in our fine cities.”
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OakNorth Bank and Scarborough Group International are both speaking at next week’s landmark virtual conference, Invest North, which is bringing together policy makers and business leaders to set the agenda for what comes next for the North. You can find out more information and book your ticket here.
