£80m pension cash for South Yorkshire property projects

A pension fund is ploughing £80m into development projects in South Yorkshire for the first time due to the health of the economy.

By David Walsh
Thursday, 14 March, 2019, 15:48
The McLaren factory was built by Harworth after it received a 4m JESSICA loan

South Yorkshire Pensions Fund will loan cash to schemes that will ‘benefit communities’ - and make money for members.

CBRE Investment Advisory, which won the contract to advise on investments, says they could include office blocks, industrial units, cinemas, stadiums, sports centres  and flats. 

It is understood the decision to invest in local real estate for the first time is due to an ethical drive to benefit the area where members live, the health of the economy - which promises financial returns - and the track record of a similar fund called JESSICA.

The Local Government Pension Scheme in South Yorkshire is worth £8.2bn and has 160,000 members working for councils, police and fire authorities and academy schools.

Coun Sue Ellis, chair of the South Yorkshire Pensions Authority, said: “This is an example of an area where we can achieve the commercial return we need to pay pensions at the same time as ensuring the delivery of schemes which will improve the long term prospects of the local economy.”

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The JESSICA fund was created by the Sheffield City Region organisation in 2013 with £22m of European money. Since then it has loaned £40m to projects including £4m to  Harworth to build McLaren's new factory in Rotherham, the redevelopment of Steel City House and the former NUM offices in Sheffield, building 3 St Paul's Place in Sheffield and industrial developments at Doncaster Sheffield Airport and at Gateway 36 in Barnsley.

Cash from both funds could also be combined to lend up to £30m to help developers fund big schemes.  

John Mothersole, chair of the JESSICA Investment Board, said the decision by the pensions authority was a “ringing endorsement” of their work.

He added: “It also creates more opportunity for investment in the wider South Yorkshire property market.”  

Will Church, senior director, CBRE Capital Advisors, said: “We are delighted to have been appointed to manage The South Yorkshire Pension Fund’s regional investment allocation. This will complement our ongoing work with the SCR Jessica Fund and enable us to develop a strategic investment plan that will maximise socio-economic growth in the wider region.”