Slice of future up for sale at £6.25m

Apr 23 2008 by Graeme King, The Journal

A MAJOR industrial site on the edge of Chester-le-Street has been put on the market with a price tag of £6.25m.

The 25-acre home of AEI Cables in Durham Road, Birtley, is available to buy through agent King Sturge. The AEI business was acquired for £13m by Indian investors Paramount Communications, but the property the company occupies was retained by previous owner TT Electronics.

With the AEI business set to continue unaffected on a 10-year lease, the land and buildings are being made available to investors with an eye on the long-term potential of the site.

Offers over £6.25m are being sought, with rental income of £550,000 a year from the lease with AEI.

The site’s attraction as a piece of land is its proximity to the A1(M), with junctions 63, 64 and 65 within reach.

A deal for the land and its giant 550,000sqft shed at the asking price will deliver an initial yield of 8.32%

James Thompson, of King Sturge, said: “It’s still pretty early days, but it’s a good spot and people will be looking at the long term potential.”

When Paramount took control of AEI Cables, the company’s owners Sanjay and Sandeep Aggrawal said they were committed to a long-term future for the business and wanted to build on its history, which dates from 1837.

AEI is a world leader in a number of cable markets, including defence construction, railway and power, but TT sold when it was loss-making.

The AEI site is in part of the region undergoing substantial development as industrial and distribution occupiers seek bases close to key roads.

Close by is Drum Industrial Estate, where the Co-op is to expand its presence. And farther away on the A194(M) is Follingsby Park, which has attracted big names such as Royal Mail, J Barbour and Sons, Hotpoint and Citilink.