Beech Holding has secured £20m financing from Bank of London and the Middle East for a 241-apartment office-to-resi conversion in central Newcastle.
Former office block Cale Cross House will be redeveloped and rebranded under the developer’s City Co-Living brand.
The scheme will comprise studios and one-bedroom flats, along with a gym, private dining rooms, co-working space, cinema rooms and gaming rooms.
Stephen Beech, chief executive Beech Holding, said: “As a developer committed to levelling up the regions, especially those across the North, we are incredibly excited to be realising the potential of the former Cale Cross House building, and injecting some much needed, high-quality properties into Newcastle’s property market”
He added that the building was “already a landmark in the vibrant Quayside neighbourhood”, but said he wanted to transform it into “a modern icon”.
The deal is BLME’s fourth transaction with Beech, following the completion of three projects in Manchester.
Office-to-residential conversion has become increasingly popular in recent years, with changes to permitted development rights in 2020 making it a more viable option.
Anna Barratt, real estate finance director at BLME, said: “The conversion of office blocks into residential accommodation is something we expect to see more of, as changes to working habits prompt organisations to re-evaluate their office requirement. It’s great to see so many of these previously redundant buildings being repurposed.”
She added: “We also anticipate growing interest in regional assets in 2023, and this development is a perfect example of the types of opportunities available to investors willing to look beyond London.”
The funding also marks a growing willingness among high-net-worth families in the Gulf to invest in the UK regions.
Ashraf Al Sawafiry, head of wealth management GCC at BLME, said: “We have noticed that Gulf-based high-net-worth families have been increasingly looking for opportunities in the UK property market in recent months. It remains a key aspect of their investment portfolios.”
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