Some 79 SME property developers have received investments totalling £100m for 112 property development projects from Development Bank of Wales managed funds.
The initial property development fund. launched in 2013, had £10m. It was increased by Welsh Government in 2017 by £32m before the launch of the £40m Stalled Sites fund in 2018 followed by the £55m Commercial Property Fund in 2019.
Funding totalling £137m is now under management by the Development Bank of Wales; providing short-term loans of up to £5m for residential, commercial and mixed-use developers in Wales.
The £100m investment to date has helped fund the build of over 1,200 new homes, including 100 affordable homes. This includes a new residential scheme by Beech Developments in Caernarfon which will see 23 new affordable homes for housing association Adra as part of a 45 housing property development in the town.
Cenydd Rowlands, property director for the Development Bank of Wales. He said: “These numbers are very encouraging, particularly given the fact that we have only had a dedicated property team since 2017. Indeed, more than £65m of the total investment has been made in the last three years alone.
"However, the most rewarding measure is that in just six years we have funded over 100 small and medium-sized developments, all of which are providing much needed new homes, mixed-use and commercial space in communities across Wales.
“Small developers can have a significant lasting economic impact on local communities. The structure of our funds allows repayments to be quickly recycled, meaning the same money can be used several times to support a number of different projects; creating homes, jobs and supply chain opportunities where they are needed most, wherever they are in Wales.”
Over 100,000 square feet of new commercial space has been developed including the third phase of Glan yr Afon Industrial Estate in Aberystwyth. Developers Ellis Development Company (Wales) Ltd were the first to benefit from funding from the Wales Commercial Property Fund for the development which features 12 units totalling 16,910 sq ft of speculative light industrial and commercial space.
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Launched last year to encourage SME developers to invest in Wales’ commercial property market, the £55m Wales Commercial Property Fund is financed by the Welsh Government.
The aim of the fund is to support the development of over 400,000 sq ft of much needed industrial and office space across Wales as part of a wider property delivery plan over the next ten years to deliver against the ambitions set out in Welsh Government’s Economic Action Plan. Loans from £250,000 to £5m are available with a maximum five year term for mixed-use and commercial development projects in Wales.
Mr Rowlands said: “With a specialist team that understands the challenges of construction, we are able to work with developers to create a tailored approach to suit each individual scheme.
“The Welsh Government’s Economic Action Plan recognises that businesses of all sizes across Wales need modern sites and premises that will enable them to expand and grow. The £55m Wales Commercial Property Fund is key to delivering that and is already encouraging smaller developers to invest in communities; boosting the economic outlook and proving how the public and private sector can work in partnership for the benefit of local people and the economy.
“Unlocking stalled sites is also a key objective. Through the Stalled Sites Fund we can provide loans for residential developments in Wales that are unable to be progressed with traditional development funding. Loans from £150,000 to £4m are available up to 90% of Gross Development Value including up to 100% of build costs with terms of up to four years.”
The Development Bank of Wales is also responsible for managing the newly launched Self Build Wales scheme, which offers loans and support to individuals building their own homes on pre-agreed plots that have been provided by local authorities.