| the north east RISE OF THE HELIX A
new round of construction and investment is underway for Science Central, the UK’s biggest urban development site outside London and an internationally-renowned innovation centre for sustainable engineering, ageing and data sciences
The site is a partnership between Newcastle University, Newcastle City Council, and Legal & General, and is already home to Newcastle University’s award- winning Urban Sciences Building and The Core, a seven-storey home for knowledge based science and technology SMEs. The third building on the site – the ‘Newcastle Laboratory’ – will open later this year, providing laboratories and offices for a wide range of scientific based companies, primarily life science and healthcare. Both The Core and Newcastle
Laboratory have secured significant funding through the previous and current European Regional Development Fund (ERDF) programmes, which help local areas stimulate their economic development by investing in projects which will support innovation, businesses, create jobs and local community regenerations.
The next two years will see the opening of the National Innovation Centres for Data and Ageing and Newcastle University’s £29m Learning and Teaching Centre. And Legal & General are poised to announce their plans for the site’s first private sector building, The Lumen, a 100,000 sq ft Grade A office development. The development is bringing high quality jobs to Newcastle and the North East: around 4,000 people will work on site when it is complete, from academics to entrepreneurs.
In recognition of the move to a new phase of development, research, and collaboration which will firmly launch it as a leading international innovation quarter, the site is being re-named Newcastle Helix. Newcastle Helix is a £350 million flagship project bringing together academia, communities, business, industry and the public sector.
Being transformed into an exemplar of urban sustainability, this unique site is a testbed for innovative technologies and solutions that will tackle some of the most pressing challenges facing cities around the world, such as flooding, resilient
IN MY VIEW T
he commercial property investment market continues to be strong across the North-East and Yorkshire regions. There is however, still a distinct lack of good quality stock coming to the market. Covenant led investments, particularly those with long leases and index linked rent reviews are producing the lowest yields, but prices being paid are reflecting the current
disequilibrium of supply and
Michael A Blake
demand with too many investors chasing too little stock. At YoungsRPS, we have found this to be the case whether it be a small private
investor/family trust or a larger property investment company/pension fund - there just isn’t enough good quality commercial property stock to satisfy demand. We have noticed that the falling occupier demand for shop space and the spate of retailer administrations has led
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infrastructure and energy. Drawing on the expertise of key
industry partners such as Siemens, Microsoft and Northumbrian Water, the aim is for Newcastle Helix to improve the lives of people not just in Newcastle, but all over the world.
The development plans for Newcastle Helix will feature as part of the Great Exhibition of the North. The country’s biggest event in 2018, the exhibition has a packed programme of exhibits, live performances and new artworks. The exhibition’s Get North Innovation Trail includes the Helix site and visitors will be able to learn more about the future of Newcastle Helix as they walk along the trail.
by Michael A Blake, Director, YoungsRPS Limited
many commercial property investors away from the retail sector. In part, this has resulted in an increased demand for alternative investments such as hotels, student accommodation, build to rent residential space, and healthcare.
We have seen a high level
of demand for good quality industrial investments...
Prime, or near prime industrial stock has also held up well in the last year or so, due to the general strong occupier demand in this sector, perceived relatively modest levels of rent with real prospects for rental growth, and lack of quality stock. A low level of new stock under construction will continue this trend. There is also a belief that, whilst retailers no longer crave a presence on the High Street, there is still considered to be long-term demand for manufacturing and distribution space to support them. We have seen a high level of demand for good quality industrial investments and
a compression in yields achieved across both the prime and secondary industrial investment markets. With prime yields for industrial investments as low as 4% in the South-East and Midlands, there has been a ripple effect on yields in the North-East and Yorkshire. An example of this is our recent experience with the sale on behalf of a faith based investment trust of a 20,000 sq.ft high quality stand-alone industrial unit at Wakefield 41 Business Park, a well-located estate, close to Junction 41 of the M1. This property was let to Xerox with just under six years to run on the lease but with a tenants’ break at three. We saw a very high level of interest from investors throughout the UK, and a sale concluded April this year at a figure above £1.8 million, reflecting a net yield of 5.8%. This demonstrates the strength of the industrial property investment market currently. Michael Blake has more than 35 years’ experience of working in the North-East and Yorkshire commercial property markets and now specialises in asset management, working with a range of investors, from private high net-worth individuals, through regionally based investment trusts and companies, to national funds.
COMMERCIAL PROPERTY MONTHLY 2018
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