North East around the market

Agents pick the most significant Deals (for the six months to end of September) Cobalt 15, Cobalt Business Park, North Tyneside Type of deal Investment Vendor Indigo Real Estate Purchaser Maya Capital Size 93,571 sq ft Price £13.08m Chosen by Dickon Wood, head of capital markets, Knight Frank This summer Indigo Real Estate sold Cobalt 15 to Maya Capital for around £13m, giving it a return of approaching 100% on an investment made just two years ago – a key reason for making it my choice of top deal. Indigo acquired Cobalt 15 for £7.9m in July 2013. It is occupied by the Department for Work and Pensions until 2018 on a rental of £1,384,851 pa – equating to £14.76 per sq ft. The property was bought from a distressed seller in difficult market conditions. Indigo, however, had the foresight to see an improvement in the occupational market and bought quality space let to a AAA covenant, giving it a 16% running yield. Maya’s European backing demonstrates a further trend in the market. Out of town has seen historically high vacancy levels but is now appealing to foreign investors who are happy to take on that risk because the yields are a bit higher. Darlington North Retail Park, Albert Road, Darlington Type of deal Investment Vendor Opus North Purchaser British Steel Pension Fund Tenants Aldi, Poundland and Iceland, among others Size 42,000 sq ft on four acres Price Undisclosed Chosen by Adam Procter, director, Griffiths Procter I have chosen this significant deal because I believe it underlines both the attraction of a multilet retail park with national names and the renaissance of interest in the North East as an investment hotspot. Developer Opus North worked hard – from assembling the land, which was under several different ownerships, to securing a raft of popular and successful retail occupiers. The fact that high-profile names such as Aldi, Poundland and Iceland have chosen to open at Darlington North is a massive endorsement of the town as a retail location. The subsequent multi-million-pound sale to the British Steel Pension Fund was a tribute to Opus North’s work. This scheme, which will create more than 150 jobs, is also a good example of co-operation between the public and private sectors – Opus worked closely with planners at Darlington borough council to boost the economy of the town. 1 Central Parkway, Newcastle Type of deal Leasing Landlord Network Rail Tenant Durham Care Line Size 10,000 sq ft Terms Around £11 per sq ft Chosen by Neil Osborne, director of agency and investment, Lambert Smith Hampton As well as being one of the biggest recent office transactions in Newcastle, this was an unusual deal as floorplates of this size are fairly hard to come by in the city centre, especially in listed properties and without paying premium rents. Longstanding North East occupier Durham Care Line was looking to move and seeking around 10,000 sq ft, crucially all on one floor. Location was key for the tenant, which wanted to remain in the Newcastle area and provide easy access for those using public transport. Landlord Network Rail was proactive in creating a new entrance at 1 Central Parkway and installing a lift. While rents are beginning to increase in Newcastle for grade-A space, Durham Care Line was also able to secure a 10-year lease at a starting rent of around £11 per sq ft, so this deal represented significant value for a building of this size and quality in Newcastle city centre. People, politics and peculiarities  Steadman joins Naylors Newcastle-based consultancy Naylors has hired Phil Steadman from DTZ as director to expand its valuation and lease advisory department. Naylors intends to increase its turnover by 50% over the next five years, having disposed of 1.3m sq ft of commercial space in 2014. LSH relocates after 50 years Lambert Smith Hampton is to move from its home of 50 years – Higham House in Newcastle – to Northam House Estates’ Grey Street offices, exchanging nostalgia for what it calls a “splendid location”. Newcastle gets second cat café Those in Newcastle looking for the purr-fect refreshment and some relaxing “me-ow” time now have not one but two cat cafés in which to meet feline friends. Catpawcino’s opening at Newcastle Quayside follows hot on the paws of Mog on the Tyne in Pudding Chare. NECA sees signs of devolution Devolution is gathering speed in the North East. At the North East Combined Authority (NECA) there was initial disappointment at the lack of a mention for devolved powers for the region in George Osborne’s July Budget – its reluctance over an elected mayor thought to be a sticking point. But hopes are high for imminent approval of a “once in a lifetime” devolution deal for the NECA, which will include a mayor. In the Tees Valley, a separate bid for a devolution deal has been re-worded to seek a plan that will help with the loss of the Redcar steelworks. Council adopts Allendale plan The small village of Allendale, near Hexham, has taken control of its own planning destiny. It was chosen by the government to become one of 17 communities to draw up a local plan – guiding everything from housing development to business accommodation. Its plan has navigated all the hoops of an independent appraisal and a local referendum to become part of Northumberland county council’s planning process. Office comforts from Visualsoft Silicon Valley-style working comes to Stockton this month, with eCommerce agency Visualsoft opening new offices that include a breakfast station, ping pong tables and living wall. There are also plans for a slide and a chef’s kitchen. Durham mall to get makeover The Gates, a Durham shopping centre owned by a Clearbell Capital-managed fund, was given the go-ahead for a £30m redevelopment to include a new cinema, riverside restaurants, student accommodation and refurbished retail units. Panacea gets PRS go-ahead Panacea Property Development was awarded planning consent for its 280-home PRS scheme called Forth Banks in Newcastle city centre, with construction due to begin early in 2016. Council picks PATRIZIA and Ask A consortium of Patrizia UK and Ask Real Estate was selected by Gateshead council to undertake a mixed-use scheme on a 10-acre site at Gateshead Quays. £125m Metrocentre for sale The Church Commissioners of England appointed JLL to start marketing the freehold of the 2m sq ft Intu Metrocentre in Gateshead. Intu has owned the leasehold since 1995 and pays 10% of income to the freeholder. PFI profit on Hexham Hospital Lend Lease and Aberdeen Asset Management made £13.6m following the termination of a private finance initiative linked to Northumberland’s Hexham General Hospital. North-south gap to grow The Centre for Economics and Business Research published growth figures that suggested the economic gap between the North and South of England was set to increase in the next 10 years – London growing by 27% compared with 14% in the north. EG gauges the trials and tribulations of the North East property market