Major data store centre likely to lure big names

Apr 30 2009 by Peter McCusker, The Journal

ONE of the country's biggest data storage centres is to be built on North Tyneside in a £175m development which could attract more blue-chip companies to the region.

Developer Highbridge Business Park has secured backing for the construction of a technologically advanced centre at its Cobalt Park from a group of wealthy investors.

Work will begin within weeks on the 46,000sq ft centre, next to the former Atmel factory. It is expected to create 60 high quality jobs for engineers and IT specialists.

Microchip maker Atmel closed there at the end of 2007 with the loss of more than 600 jobs after taking over the former Siemens plant in 2000. It had moved there after getting £27.8m of public money to attract it to the area.

Highbridge director Guy Marsden said there had already been substantial interest in leasing the property, which is being marketed to companies which need to store large quantities of personal data, such as banks and utilities.

“This is a major, flagship development for the region and the only commercially available data centre of its scale in the North. The commercial strength of the project is witnessed by our ability to raise the finance in such difficult economic times.”

One North East director of business Ian Williams said: “It is great news that Highbridge has been able to secure funding for such an important resource as this for Cobalt Business Park.” Highbridge is already planning to create a second centre of 39,000sq ft in the Atmel building. A key reason for the choice of Cobalt was its ample supply of power from the nearby National Grid Tynemouth station.

Andrew Jay, of specialist data centre advisers CB Richard Ellis, said: “Cobalt has everything required by a data centre end user – a robust power supply, fibre and a very substantial saving on occupancy costs by reference to any competing scheme.

“We expect end users to include large financial services companies, corporates, government bodies, technology companies, local authorities and wholesale companies that re-sell space.

“Given that the new building is funded and construction is starting on site in the summer, it will also have a substantial advantage in ‘time to market’ for the operators.” Cobalt is still benefiting from the tax breaks for investors associated with the former enterprise zones.

Mr Marsden said: “Syndicated financing for the project has been arranged through the Cobalt Data Centre Development Syndicate, a group of investors organised and managed by the tax specialist adviser Chancery Tax, which is secured and fully subscribed.

“Having secured a funding package for such a development project in the recent difficult financial climate will enable capital-intensive data centre projects to proceed at Cobalt.”

Cobalt has 1.2 million sq ft of offices, employing more than 8,500 people in organisations that include Procter & Gamble, Santander, the Department for Work and Pensions, North Tyneside Council, Orange and EDS.