Manufacturing Property Challenge Programme – Call 1 now closed
This programme supports companies that develop property for manufacturing purposes. Typical grant support is likely to cover up to 20% of eligible costs for your project, up to a maximum of £2 million. The programme is currently closed to Stage 1 applications.
Contents
What is the Manufacturing Property Challenge Programme?
The Manufacturing Property Challenge Programme provides support for the development of industrial accommodation for manufacturers in Scotland.
The programme is designed to address the shortage of modern, good quality, speculative, mid-size industrial buildings that are suitable for manufacturing occupiers.
Applications can involve one single building or multiple buildings on one defined site.
As part of the first competitive call, we're investing £15 million and targeting mid-size industrial buildings (around 15,000 square feet) that are suitable for a variety of manufacturing occupiers.
The call opens on 15 July and closes on 18 September 2024.
How much support is available?
Typical grant rates for projects are expected to be up to 20% of grant-eligible costs.
The maximum grant under the programme is expected to be £2 million.
The level of grant we can award will be determined by a number of factors, including:
- Project type
- Facility size
- Eligible costs
- Capital investment
- Demonstration of a need for the grant
- Value for money
Each application will be assessed on a case-by-case basis.
Am I eligible?
We're looking for private companies with experience of developing property for the purpose of manufacturing. However, there are two separate sets of criteria that must be met – one for the applicant and one for their project.
Applicant eligibility
As an applicant, you must:
- Be a private business registered in the UK
- Demonstrate experience of developing industrial property for manufacturing purposes
- Be able to demonstrate a financial need for our grant
- Be able to provide details of the projected operating profit
- Comply with our subsidy scheme rules (PDF, 312 KB)opens in a new window, whereby the subsidy amount must not exceed the difference between the eligible costs and operating profit of the investment
- Be the owner of any property or site that is being worked on. This can either be a heritable title or a ground lease exceeding 50 years.
Your organisation can only make one application in any single round of Manufacturing Property Challenge Programme calls.
Project eligibility
Your project must:
- Create speculative new or refurbished mid-sized manufacturing accommodation (around 15,000 square feet)
- Be able to demonstrate which manufacturing industries your project will target
- Offer good value for money
- Be able to demonstrate that the project is deliverable within two years after receipt of a grant offer
- Be completed to high sustainability standards (either an ‘excellent’ BREEAM rating, EPC ‘A’ for new builds or EPC ‘B’ rating for refurbished properties)
- Have not already begun or been legally committed to prior to application
- Not have any pre-let agreements in place
- Be located within the area served by Scottish Enterprise (Aberdeen City and Shire, the east of Scotland, Tayside and the west of Scotland)
- Be located on a site designated for industrial use in the relevant local development plan
We're not looking for
There are areas that the programme is not applicable to. We're not funding projects in the following areas:
- Residential
- Office
- Retail
- Tourism and leisure
- Distribution
- Trade counter
- Energy generation and storage
- Airport and port infrastructure
- Agriculture and fisheries
- Bespoke purpose-built accommodation (where the end user is committed to occupation)
The programme is a support to close the viability gap for the creation of speculative new and refurbished manufacturing facilities by property developers and cannot fund owner occupiers wishing to expand their own premises. If you are looking for this type of support, we offer business grants that could help.
Find out more about our business grants
Two-year manufacturing restriction
As a condition of the programme, you must agree that your property is to be used solely by manufacturing occupiers over a two-year period once the property has been developed.
Manufacturing is the production process in which raw materials are transformed into physical products through processes involving people and other resources.
We'll help you find manufacturing occupiers throughout the building process and while the two-year restriction is in place.
Fair Work and net zero
All companies that receive funding need to meet the Scottish Government’s criteria for Fair Work and net zero.
This must include:
- Appropriate channels for effective voice, such as trade union recognition
- Payment of the real living wage to all employees over the age of 16, including apprentices
- Investment in workforce development
- No inappropriate use of zero hours contracts
- Taking action to tackle the gender pay gap and create a more diverse and inclusive workplace
- Offering flexible and family-friendly working practices for all workers from day one of employment
- Opposing the use of fire and rehire practices
- Having a credible plan in place to reduce operational greenhouse gas emissions to net zero by 2045 at the latest
Find out more about Real Living Wage guidance from the Living Wage Foundationopens in a new window
Learn more about our net zero ambitions
The application process
This programme has a two-stage application process. First, you’ll need to submit a Stage 1 application. Once that is approved, you may submit a Stage 2 application.
Step 1
Submit your Stage 1 application form by 18 September 2024.
Step 2
Your application will be reviewed by an assessment panel. If your project is shortlisted, you will be invited to submit a Stage 2 application, where you will be asked to provide further information and supporting evidence.
Step 3
Submit your Stage 2 application by 28 November 2024 with any additional information, such as development appraisals.
Step 4
Your Stage 2 application will be reviewed by a panel of assessors from across Scottish Enterprise. Your proposal, including the development appraisal and discounted cash flow, will be reviewed by an independent property consultant.
Step 5
If your project is recommended for approval, you will be allocated a project manager. They will help you work through the due diligence required for project approval. If your project is unsuccessful, you will receive feedback.
Key dates
18 September 2024 – Deadline for Stage 1 applications. Competition closes at noon.
11 October 2024 – Stage 1 applicants notified.
28 November 2024 – Deadline for Stage 2 applications.
February 2025 – Stage 2 applicants notified of recommendation.
2025 to 2026 – Project delivery.
How we'll assess your application
Your application will be assessed by the Manufacturing Property Challenge Programme Assessment Panel based on seven sets of criteria.
|
Criteria |
Weighting |
Assessment |
|
Value for money |
25 |
The value for money your project provides will be assessed by evaluating the grant or loan requested against a number of project outputs such as:
|
|
Creation of high quality, flexible space suitable for a variety of manufacturers |
20 |
Your project will be assessed by evaluating the technical specifications of the proposed manufacturing unit(s) and its suitability for manufacturing occupiers, including eaves height, floor loading and sustainability. |
|
Deliverability |
20 |
The deliverability of your project within the two-year time frame from grant offer date will be assessed by evaluating the following points:
|
|
Demonstrable demand for manufacturing space in the area where the project is located |
15 |
The demand for manufacturing space in the geographical area will be assessed by evaluating the availability of industrial space suitable for manufacturing compared with the demand in that area, as detailed in the HVM Property Needs in Scotland report. |
|
Alignment with Scottish Enterprise mission priorities |
10 |
This will be assessed by evaluating the industries you intend to target as occupiers. |
|
Place Principle |
5 |
The project will be assessed by how it supports the Place Principle and the opportunity for community benefits during the build. |
|
Net zero |
5 |
You should include net zero ambitions that exceed the current legislation and minimum sustainability criteria set out in the eligibility guidelines as part of your project |
Eligible costs
The programme will contribute a grant towards eligible costs.
Eligible costs are the capital build costs of a project including professional fees incurred after the project approval date. You must only include anticipated eligible project costs in your application.
The conditions of your grant require claims to include a project monitoring report from an external quantity surveyor certifying progress on the project and costs incurred. The report should also confirm that the quantity surveyor has a duty of care to Scottish Enterprise and any other funder. This is an eligible cost for the project.
Ineligible costs may include expenses related to:
- Legal costs
- Insurance
- Letting fees
- Void costs
- Maintenance
- Security
- Finance (such as interest or arrangement fees)
- Post-construction hold costs (such as marketing and IT)
The programme supports mid-sized manufacturing accommodation. The costs of any subdivision of units to make smaller units is not an eligible cost.
Got a question?
If you have any questions about the programme, get in touch with our team.
After you've applied
Once you've submitted your application, there are a few things that you should be aware of.
Once your project has been approved, you will receive a grant offer letter complete with our standard grant terms and conditions. You will have two weeks to accept the grant offer.
A director of your company or the company secretary must sign and date the offer acceptance and return the whole document to Scottish Enterprise. The company should retain a copy of the signed offer.
As part of your support from the programme, you must comply with our project monitoring conditions. These include monthly calls with a Scottish Enterprise project manager and sharing information on the progress of the project and management of the contract. We must also be alerted to any relevant slippage, risk or issues associated with the progress of the project.
All grants are subject to our standard terms and conditions.
Claims for expenditure consist of a four-step process.
Step 1
Your project will be allocated a dedicated project manager who will be responsible for monitoring the progress of your project and managing your claims.
Step 2
On your agreed claim date, complete the claims form with the relevant evidence of spend and submit to your project manager. Your grant claims will be paid after you show evidence that you have:
- Met the relevant criteria and conditions set out in the offer
- Incurred eligible costs after the project approval date, backed up by payment certification and a quantity surveyor monitoring report supporting each claim
Step 3
An independent assessor will verify the claims and recommend approval.
Step 4
Funding will be released within 30 days of claim approval.
We may require repayment of part or all of the grant paid in the case of sale or lease of the building in certain scenarios. These include scenarios where the building is let or sold to a non-manufacturer within two years post-completion or if excessive profits are made on a future sale or lease.
Successful applicants should be aware that there are conditions related to confidentiality, data sharing and publicity.
Confidentiality and data sharing
Your application for Manufacturing Property Challenge programme funding may be referred to other Scottish Enterprise departments, government agencies and non-government bodies with sources of technical expertise for help in appraisal.
External technical and financial advisers will undertake due diligence checks of applications. We have confidentiality agreements with the relevant organisations to ensure that all material sent to them relating to grant applications is handled in the strictest confidence.
By completing and submitting an application, you acknowledge that the information you provide may comprise of company information and personal data (as defined in the UK GDPR and the Data Protection Act 2018 (“the Data Protection Laws”)).
Any personal data provided in the application will be processed by Scottish Enterprise in accordance with Data Protection Laws and held in accordance with our privacy notice.
Read our privacy notice to find out more about your rights in respect of the personal data we hold
Publicity
You must not issue any press release or make any announcement or statement regarding the grant and/or the project without our prior written consent.
We may publish details of the grant, including information set out in the offer, on our website and in public records and other documents.
To comply with UK government sanctions legislationopens in a new window and Scottish Government guidance on trading with Russia and Belarusopens in a new window, we will carry out sanctions checks on your company, shareholders and, in some cases, directors. This will form part of our appraisal for your application.
We may ask you about the nature of your trading and/or investment links with Russia and Belarus. Depending on the outcome of these checks, we may decide not to support you or your company.
Scottish Enterprise Regional and SME Investment Subsidy Scheme
This programme is being delivered under the Scottish Enterprise Regional and SME Investment Subsidy Scheme 2022 to 2025 – SC10674. As per Section C: Investment subsidy for local infrastructures, your project must be compliant with the scheme conditions.
High Value Manufacturing Property Needs in Scotland report
Alongside partner agencies Highlands and Islands Enterprise (HIE) and South of Scotland Enterprise (SOSE), we appointed Ryden to undertake analysis into market failure associated with the provision of industrial land and property to support the growth of High Value Manufacturing (HVM) in Scotland.
Read the High Value Manufacturing Property Needs in Scotland reportopens in a new window
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