The North East
Development Sector Very Active Despite Covid19 in Newcastle City Centre
Tony Wordsworth, Director, Avison
Young, the Newcastle onset
centre and inner urban core. Despite
the
reviews development activity within
Covid19 restrictions, commercial
Newcastle city
of development Tony Wordsworth, Director - Avison Young
activity within the Newcastle city centre has been on- going alongside detailed preparatory planning and pre-development work on major projects within the development pipeline.
Legal and General’s, 106,000sq. ft, The Lumen at Newcastle Helix was completed in spring 2020 and, whilst built speculatively, circa 50% of the office space has already been taken up, with a strong level of interest in the remaining floors. The adjoining 107,000sq. ft Spark building is also progressing on site with completion due in early 2022. Womble
Bond Dickinson has given a forward commitment to occupy 47,500sq.ft. Planning consultations are also ongoing for the construction of a £18m Vastint developed Moxy hotel within the scheme.
The Gallowgate/St James Boulevard area is busy, where the High Street Group has completed the impressive 161 apartment, Hadrian Tower. HSG are also progressing a scheme at One St James, a £120m office, leisure and housing scheme, adjacent to the football ground. Ask Real Estate and BAM Construction are building a six storey,70,000sq.ft. headquarters building for Home Housing at Strawberry Lane.
Taras Properties are both developing and funding the East Pilgrim Regeneration Scheme where Bowmer and Kirkland are building, the Ryder Architecture designed, 120,000sq.ft. Bank House office building, due for completion in early 2023. In parallel, development proposals and a planning application for the conversion of the Grade 2 listed former fire station into a boutique hotel has recently been submitted.
On Gateshead waterfront, Ask Patrizia has secured planning permission for the development of a £260m arena led conference centre and hotel scheme. Gateshead Council has also granted planning permission for the construction of a £18m multi-storey car park at Hawks Road.
Avison Young’s £77million Business Park Spending Spree
Despite the Covid19 pandemic, Avison Young’s investment team in Newcastle, acting on behalf of LCN Euro Property Holdings (an overseas investment company) secured a third major office park investment purchase, namely Cobalt 22 at Cobalt Park, North Tyneside.
The team completed a total of £77m of acquisitions in 3 separate North East transactions over an 8-month period in late 2019/ early 2020, for two separate clients.
Back in March 2020, the team acting for LCN Euro Property Holdings secured the acquisition of Cobalt 23 at Cobalt Business Park. Cobalt 23 was a freehold office investment comprising 126,000sq.ft.of high quality Grade A offices over 5 stories and a separate 171 space ground level car park, all let to Sage PLC on a 15 year lease with a break at year 10, expiring in December 2034.
The property purchased for £26.2m comprises the main building in Sage’s new headquarters campus, being adjacent to Cobalt 22 (76,000sq.ft.) which they also occupy on like terms, having relocated from Great North Park, Newcastle.
Simon Beanland, Principal at Avison Young, comments.”We were pleased to buy these two contiguous investment properties, which met the requirements of our client, being well let to a secure undoubted covenant, Sage Group PLC “.
The first of “the £77m hat-trick” of investment deals, completed in October 2019, was the £32m purchase of 8 office buildings at Quorum Business Park for Shelborn Quorum Limited. The predominantly freehold interest (part long Leasehold) comprised 8 Grade A buildings extending to 458,837sq.ft. along with extensive parking provision, amenity offer and further development opportunities. The asset provided a diverse income stream let to 20 tenants including major occupiers such as Balfour Beatty, DVSA, Capita and Greggs PLC.
Simon adds:”Despite the uncertainties arising from Brexit and the Covid19 pandemic, these three investment deals demonstrate the appetite of UK and overseas property investment companies, to buy well let offices on North East business parks.”
The team rounded off the year with the sale of Spectrum 4 at Spectrum Business Park, Seaham to a London based private investor, comprising 35,000sq. ft let to Believe Housing on a secure 15year lease.
Quorum Aerial Single 76 COMMERCIAL PROPERTY MONTHLY 2021
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