Buyer on horizon for Quayside West site

Administrator FRP Advisory said that a £7m deal is close for an 18-acre plot at the former Calder leadworks site in Newcastle, where 1,100 apartments were approved early in 2022.

Along with the apartments, the intended project included a hotel, commercial floorspace including retail, leisure and restaurants, with landscaping and walking and cycling routes, before the project foundered.

FaulknerBrowns designed the scheme, with DPP advising on planning.

Nedim Ailyan and Ben Stanyon of FRP are joint administrators of Quayside West, a development vehicle set up for this specific project.

Although other directors, linked to a range of property businesses, had previously been listed at the company, Mark Stephen is the sole remaining director listed with Companies House.

Having first come forward in 2018, plans for Quayside West were finally approved by Newcastle City Council in January 2022.

According to FRP’s report, once consent was secured, the developer sought to secure grant funding for remediation and infrastructure costs – the development, off Redheugh Bridge Roasd, required some remediation, re-contouring and a spine road as part of preparatory works.

A bid for brownfield development grant support was unsuccessful, at which point, said FRP, the secured creditors told the developer they would not provide additional funding until a new strategy had been found.

While alternative funding was still being sought, the developer received a winding-up order, instigated by its former development manager and backed by other two unpaid professional parties.

FRP was approached in May and appointed in July, swiftly engaging Irwin Mitchell to advise on legal matters, and LSH to undertake a valuation of the site.

Given the high level of default interest accruing to the secured creditors, it was agreed that the site be marketed for sale as quickly as possible, with LSH being retained to run this process.

A number of indicative offers were received before a deadline of 18 August. Following that process, an offer of £7m has been accepted by FRP, subject to contracts being agreed.

The senior secured lender for Quayside West is Dragonfly/Octopus. Along with these two, there are two other secured creditors, Hygo and Reditum. The four secured creditors are owed a combined £10m-plus, FRP said. Unsecured creditors are unlikely to receive anything from a sale.