Forward Funding Secured for Data Centre Development
07 May 2009
Acting on behalf of the Cobalt Data Centre Development Syndicate, made up of private investors brought together by Chancery LLP, Ryden has advised on the forward funding of a new data centre at Cobalt Business Park, North Tyneside.
Cobalt Business Park is one of the largest business parks in the UK and the new £183 million facility will comprise of c. 46,000 sq ft of Tier 3 accommodation spread across eight separate data halls.
The Park sits within an Enterprise Zone and the development makes use of golden contracts allowing investors to secure a tax rebate. There are few Enterprise Zones left in the UK and this is likely to be one of the last deals to take advantage of the investment opportunity they offer. HM Revenue & Customs has brought new legislation in to place to prevent further tax relief being granted through the use of golden contracts from 2012.
The developers, Highbridge Business Park Ltd, are creating the specialist centre for the storage of data and have had early interest from potential tenants. Cobalt Business Park is one of the few viable sites in the UK which can house a new data centre as the centres have high power requirements and planning permission can be difficult to secure.
Steven Gay, Ryden Investment & Finance Partner, comments “This is a tax driven deal which attracted interest from private investors when several elements came together successfully; the Enterprise Zone status, the suitability of the site for this type of development, a high qualifying rate due to the cost of the building and the strength of demand from occupiers for this facility. In addition the finance model put in place by Chancery LLP and Schroders ensured the transaction was particularly attractive for the investors.”
