A £6 million loan from Bradford Council to developers McAleer & Rushe has enabled the flagship mixed-use Southgate development in Bradford city centre to be completed.
Construction has already started on the 1.2 acre Southgate site on the corner of Thornton Road and Godwin Street after Irish developers McAleer & Rushe secured two major pre-lets.
But there was a £6 million shortfall in funds needed for the construction finance and the development with an anticipated end value of £45 million, which should create 1,000 jobs, looked in jeopardy until the council stepped in.
FTSE 250 loans company Provident Financial, whose headquarters have been in Bradford for the past 130 years, have taken a pre-let on 130,000 sq ft office building, while Jury’s Inn have agreed to run a 200-bedroom hotel in Southgate.
Alex Munro, of property consultants Knight Frank in Leeds and advisers to McAleer and Rushe, said: “This is tremendous news, and a great example of the private and public sectors working together. This is a crucial development for Bradford, which will create hundreds of jobs for the city, and comes at a time when good news in the property market is pretty scarce. Everyone concerned has worked very hard to achieve this result.”
Stephen Surphlis Development Director for McAleer and Rushe commented: “This is a flagship development for the city and we are pleased that the City Council has been able to assist in the financing of the construction.
“This facility will enable us to complete the development and with pre-lets and pre-sales secured on several other sites within our portfolio we now have a very positive outlook for the Group in what is still a very tough trading environment,” he added.
Peter Crook, chief executive of Provident Financial, commented: “I am delighted that the developer, McAleer and Rushe, now has the final part of its funding in place. McAleer and Rushe can now get on and build us a great new head office in a top city centre location to our detailed specification”
Provident Financial hopes to move into its brand-new offices before the end of next year and the skeleton of the building should be complete by the end of this year.
Mr Crook added: “Despite problems in the world economy and particular difficulties for banks and financial companies, we are continuing to thrive. Moving to our new, purpose-built, 21st century head office will allow us to continue to grow and give us a fantastic environment in which to work”
The 230,000 sq ft brownfield site was formerly occupied by a Co-op supermarket and a car park. Provident Financial, which mostly provides small home loans of between £50 and £500, is moving from its current headquarters at Sunbridge Road.
Bradford Council’s Assistant Director for Asset Management, Mike Bell, said: “Bradford Council and Yorkshire Forward have agreed a commercial loan of just over £6 million with McAleer and Rushe.
“We made this decision because of the advanced stage of construction and the agreed pre-lets to major companies. The secured loan will be repaid with interest over the next 11 months.
“The loan will allow them to continue the good progress they have made on site and complete a scheme that will provide a major boost to the city and district with offices that will become the new home of Provident Financial and a 200-bed Jurys Inn hotel.”
For further information, please contact Robert Beaumont of Robert Beaumont Associates on 01423 323139