Work starts soon on £175m office blocks

Mar 31 2008 by Graeme King, The Journal

WORK on a £175m project to build eight giant new office blocks on the edge of Newcastle will start soon providing space for around 5,000 jobs.

The extension to the Quorum Business Park in Longbenton will cover an 18-acre site, housing eight individual buildings adding up to a total of 500,000sq ft.

The partners behind the scheme expect each building to take between nine and 12 months to build, with full completion by February 2012.

The blocks – from 30,000sq ft to 100,00sq ft – are to be built by developer Grantside, with backing from London-based financiers Tritax Securities, and Bank of Scotland Corporate.

Quorum has Enterprise Zone status, offering exemption from business rates, which helps the developers to offer some very competitive rents to occupiers, often supported by generous incentives to sign up.

The extension to the site will be built on land previously occupied by the Viasystems semiconductor factory.

Quorum has already proved popular with occupiers, including IBM, National Grid, the Inland Revenue and MWB Business Exchange, who like its proximity to the A19 and A1, and to a large centre of population, with Four Land Ends Metro Station within walking distance.

The first new building is expected to be complete by March next year.

Quorum currently comprises around 450,000sq ft of space, with around half of that let out, and other occupiers – including a pharmaceutical company – said to be close to signing up.

The joint agents for Quorum are Knight Frank and DTZ. Colin Davidson of DTZ, said: “This is a good, positive story for the North East. For the developers and banks to have confidence to look into the future, and see there should be demand for new offices here.”

“This is speculative space, as what we tend to find with property requirements is that when an organisation wins a contract, they can’t generally wait for a building to come out of the ground.”

Iain Ross of Tritax said: “This is a very important development for Newcastle and for the whole of the North East, providing a significant amount of prime quality office space. We organise syndicates of investors to invest in Enterprise Zone areas. We already have investments in the North East, at Bracken Hill in Peterlee, Doxford in Sunderland, Dawdon near Seaham, and at Jarrow.

“At Quorum, we bought expansion land that Viasystems did not want, then they left and we bought the main factory site too. The idea is to make a first class business location. We will build 500,000 sq ft of office space, and then a hotel and the kind of retail you associate with a business park of this size – a minimarket, dry cleaners, sandwich shop.

Bill Smillie, area director of real estate for Bank of Scotland Corporate, said: “Tritax has an outstanding reputation in the development of EZ sites and we look forward to this being a stimulus for growth in the North East.”