West Midland developers frustrated by the reluctance of the banking community to increase its exposure to the sector could benefit from a new multimillion pound fund.

The Palmer Vinci Fund is the brainchild of Gareth Williams of Opus Land and Chris Pape of Vinci Construction and was inspired by the funding prototype applied to create Veolia Environmental Services’ new headquarters at Kingswood Lakeside in Cannock.

It is designed to provide 100 per cent development finance for pre-let, new commercial projects, and its creators believe it will facilitate the development of many more schemes across the region.

The fund will lend to pre-let commercial development in the £3 million to £15 million size range and its first deal is already underway.

With developers hindered by the risk-aversity of the bankers, it is hoped that the Palmer Vinci Fund offers a real opportunity to break the development deadlock.

Opus development director Gareth Williams said: “At Cannock we financed the site assembly as well as the ‘soft costs’ including planning, design, legal and agents’ fees, while Vinci took responsibility for all construction related expense and the scheme’s forward sale was already concluded with an in-house Palmer Capital fund.

“We quickly realised that by refining this template, it could be replicated effectively as a paradigm elsewhere for developers seeking debt finance, provided a pre-let and a viable exit strategy are already in place.

“As one of the UK’s leading building contractors, Vinci is an ideal partner in the provision of this type of finance package, not only have we a track record of working successfully together, we also share similar views on risk management and management style. The intention is to promote this new fund to the developer and occupier markets.

“Developers without access to finance can use this new fund by offering to share the developer’s profit in return for 100 per cent development finance.

“Occupiers can look to Opus Land to utilise this fund to offer them certainty on any new build project.”

Chris Pape, managing director of Vinci Constructions Building Division in the Midlands, South West & Wales added: “The Palmer Capital business model offers Vinci Construction access to new build opportunities across the UK.

“By offering 100 per cent development finance alongside any one of the Palmer-backed development companies, we offer a unique finance package.

“It made sense to create a fund to offer the product to the wider market.”