Newcastle-based Merchant Place Developments has been granted planning permission to redevelop the art deco, Grade II listed Co-operative building.
The Newgate Street property will be transformed into a 150,000 sq ft leisure scheme, comprising a 231-bedroom Travelodge hotel and a Co-op supermarket.
The scheme, designed by Red Box, is being funded through a Business Premises Renovation Allowance syndicate, which gives investors 50% tax relief.
Work on the project will start in early 2012 and the hotel will be fully operational by summer 2013.
Cushman & Wakefield has been appointed letting agent; Smith Cole Wright advised Travelodge.
daniel.cunningham@estatesgazette.com
