Project on chic riverside put on ice until upturn

Mar 24 2009 by Peter McCusker, The Journal

THE next stage of a £300m project at Gateshead Quayside has been shelved with developers saying it would have lost them money.

Last summer npower announced it had signed a deal to move its Newcastle-based staff to new offices on the Baltic Business Quarter development near the Sage.

But developer Terrace Hill says this will not now proceed because of the difficulties in the commercial property market, which has seen values plummet and almost all speculative developments put on hold. However, Terrace Hill is confident of the long-term success of the 10-year project – which is already home to Gateshead College and the Open University – and recently secured planning permission for the £13m Design Centre North.

A statement from publicly-listed Terrace Hill to the stock market outlines its difficulties in the current market place.

It said: “At its Baltic Business Quarter scheme in Gateshead, Terrace Hill announces that the pre-let to npower will not proceed.

“The adverse movement of investment yields since the pre-letting was agreed has meant the project would not be profitable and, as a result, Terrace Hill has decided to postpone this phase of the development until an alternative profitable pre-let has been secured.

Terrace Hill is in partnership with Gateshead Council on the 50-acre development.