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Funding boost for Aston science park

Up to 10 developers are in talks over the funding of a £35 million digital plaza in Birmingham, Construction News has learnt.

The project to extend Birmingham Science Park Aston was launched by site owners Birmingham City Council at the Mipim property conference in Cannes earlier this month.

After initial talks with numerous developers, BSPA says it is confident of securing a deal based on speculative funding, a sign of confidence returning to the commercial sector.

The park’s chief executive David Hardman said the early interest from Mipim proved there were both the funds and the appetite to invest in property.

“Having initiated discussions at Mipim we are now in talks with between five and 10 firms to form a joint venture partnership for the digital plaza.

“The impression I am getting is that the money is there and science parks are looked on favourably by investors.

“All the other buildings on the site were completed with loan finance but that is no longer possible so we want a JV that brings cash to the table.”

Dr Hardman said developers were confident the scheme could be financed without pre-lets because it adjoined the existing Faraday Wharf site, which is now more than 95 per cent let, and because more than 3,400 sq m of business space had been let across the science park in the past 12 months.

At least two of the interested developers are understood to be overseas firms with UK arms.

The digital plaza will be subject to planning and comprises four high-tech buildings with a gross area of 10,895 sq m.
The first of the buildings - iCentrum - is the largest, at 4,280 sq m and incorporates an incubator facility.

Dr Hardman estimated the construction cost would be approximately £12m. The deal is likely to be subjected to a formal OJEU process as it is owned by the city council.

A joint venture partner is expected to be signed up by the end of the year with construction starting on site in 2012.

The winning bidder is expected to sign a long-term partnership that will see them deliver all four of the planned new buildings.

Savills director for commercial research Matt Oakley said the early talks were very encouraging.

“It is without doubt a positive sign and probably an indication of the general enthusiasm for tech-related projects.

“Tech and media were very active in London last year, and with government desire to back growth industries, this is becoming quite an attractive package for funders and developers.”

Last week CN revealed full funding was in place for the £1bn Pinnacle Tower in the City of London, one of the first major schemes in the capital to go ahead speculatively since the downturn.

 

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