North East development: ones to watch in 2023
Despite the headwinds buffeting the UK economy, long-term projects in property and regeneration continue to move forward across the region. Here is a selection of projects worth keeping an eye on in 2023 and beyond.
Stephenson Works, Newcastle
Developer: Igloo Regeneration and Newcastle City Council
An £8.7m office-led redevelopment of the historic Pattern Shop will be a major part of the drive to create a new destination in the area around Newcastle’s main station. Igloo, acquired in January 2023 by socially minded investor PfP Capital, is expected to announce major plans for the area in March. The headline numbers are impressive: gross development value of £450m, 120 apartments, 200,000 sq ft of offices, 10,000 sq ft of retail & leisure, 39,000 sq ft of heritage buildings revamped. AHMM leads the design team.
Centre Square, Middlesbrough
Developer: Ashall Projects
Fully pre-let to AXA, the 40,000 sq ft No.6 Centre Square is set to reach practical completion in February, meaning 450 staff will begin to move in. Centre Square as a whole, sitting next to the law courts, comprises public space and six buildings, stepped in height from three storeys up to five. GB Bank, XPS and Causeway Technologies are among the occupiers in the two completed buildings, where 5% remains unlet. New space is being snapped up by professional services, energy firms and a buoyant gaming sector.
Developer: Sunderland City Council
Plans were revealed in February 2022 for an £80m arena and leisure development at Riverside Sunderland, potentially bringing a 10,000-capacity arena to the city. Riverside as a whole is a £350m development masterplan area, backed by £100m from Legal & General Securities to develop a business district along St Mary’s Boulevard – the 60,000 sq ft Beam opened in 2019 as the area’s first new offices. In time, the Riverside area will provide 1,000 homes and 1m sq ft of workspace, with development split into six areas, including the former Vaux site, with four including residential.
Developer: South Tees Development Corporation
Billed as the largest industrial zone in the UK at 4,500 acres, Teesworks sits at the mouth of the River Tees, within the area’s designated freeport zone. The site is to house the Tees Valley’s push to be a dominant player in renewable energy, with major projects like the Net Zero Teesside carbon capture plant and biomass power plant MGT lined up along with a host of plots able to service offshore wind. Construction is now under way on the £107m South Bank Quay, while SeAH Wind is building a £450m offshore wind turbine production facility.
Developer: Legal & General Investment Management
The Helix site is a microcosm of Newcastle history and culture: once a coal mine, later occupied by Scottish & Newcastle Breweries until closure in 2005. The city council and Newcastle University then secured L&G in 2017 as development partner for a £350m, 24-acre city district. The Lumen, the first privately funded office building in the city for a decade, has attracted tenants including Savills and Clifford Chance, while at The Spark building, the National Audit Office took the 10,000 sq ft fourth floor in January 2023, joining law firm Womble Bond Dickinson which occupies 44,000 sq ft.
Pilgrim’s Quarter, Newcastle
Developer: Taras Properties
This is an area of huge change for Newcastle. Commercial Union House was demolished in Pilgrim Street in 2022, while Taras’ plans for a £200m leisure, shopping and living scheme were ripped up following the pandemic and replaced by plans driven by 678,000 sq ft of offices. The listed Carliol House will now become part of the office element rather than a hotel, while consents are already in place for Bank House, Pilgrim Place and the former fire station. Ryder Architecture and Avison Young are working with Taras. The Government Property Agency has signed for 462,000 sq ft to house the region’s HMRC centre, rationalising its estate from disparate out-of-town locations.
Aykley Heads, Durham
Developer: Durham City Council
An innovation district being advanced by Durham City Council and the university close to the railway station, Aykley Heads is described as the “final piece of the jigsaw” for Durham and a perfect fit for something that can provide high-value jobs in areas of need. Challenger bank Atom chose to headquarter itself in the area, while the university’s volume of data scientist graduates has doubled in recent years. The hunt for a development partner is officially on. Avison Young director Stuart Howie says: “It’s a tremendous piece of land, there’s a great university, it’s a compelling story.” There are six plots, able to house 19 buildings totalling 400,000 sq ft.
Merchant Park, Newton Aycliffe
Developer: Merchant Anglo and Rokeby Developments
A £90m development at Junction 59 of the A1(M), Merchant Park is a 66-acre development at the established Aycliffe Business Park. Since becoming home to a Hitachi train manufacturing plant – one of the region’s largest inward investment wins of recent years – Merchant Anglo has set about building out the remaining 36 acres. Part of that is Station Place, a 10-unit development of 50,000 sq ft completed in 2022. County Durham Council has taken a 35-year lease. Station Place is managed by support service Business Durham.
Integra 61, Durham
Developer: Citrus Durham
In 2022, Citrus Durham secured £75m funding to enable the speculative development of Connect, a phase of 650,000 sq ft of industrial space at the Integra 61 mixed-use project at Junction 61 of the A1(M). With the first buildings completing in summer 2023, Connect will comprise a 342,000 sq ft industrial/logistics development of four units ranging from 43,000 sq ft to 152,000 sq ft; and Connect 298, a standalone unit of close to 300,000 sq ft. GMI Construction is the contractor, CBRE and Avison Young the agents. As for the wider Integra, the roadside element is flying, with Greggs, Costa and KFC signed up, while Bellway and Persimmon are delivering 91 and 170 homes respectively.
Sunderland Civic Centre
Developer: Vistry Partnerships North East
The redevelopment of the civic centre site as a residential community was greenlit in April 2022, with 265 homes earmarked for the site. The plans had been in the works for some time as part of an overall scheme to move the council offices to the new £61m City Hall on the former Vaux brewery site, itself a long-standing regeneration priority for Sunderland. Vistry’s plans for the Burdon Road site include 145 houses and 120 apartments along with the recreation of St George’s Square around the eponymous listed building.
Gateshead Regeneration Partnership
Developer: Vistry Partnerships
This £350m venture is one of the UK’s largest housing-led regeneration programmes, being taken forward by Vistry, Home Group and Gateshead Council. More than 2,400 homes will be delivered over two decades across 19 sites, with a mix of private sale, affordable housing and shared ownership. To date, 319 homes have been delivered at Birtley, Deckham and Bensham. Other sites include Kelvin Grove, the former Rowlands Gill primary school site and Whitehills Drive, next to the Queen Elizabeth Hospital.
Wellington Square, Stockton-on-Tees
Developer: Stockton-on-Tees Council
What’s happened in Stockton-on-Tees is an exemplar of proactive town centre management at a time when councils are struggling to retain relevance and reduce retail space. The 340,000 sq ft Castlegate shopping centre, built in 1972, was just 60% occupied before the decision was taken to demolish it and relocate retailers to the 2001-built Wellington Square, reconfiguring stores including a 13,000 sq ft H&M into smaller units suited to independents. In all, 31 traders have moved, and footfall is up by 48% year-on-year. Demolition of Castlegate and its car park is now under way, enabling community-focused leisure development. Knight Frank advises the council.
Waterside House, Sunderland
Developer: Kingscrown Group
Home to HMRC for 25 years, the 36,000 sq ft Waterside House has been redeveloped for the hybrid working age after Kingscrown bought the asset, situated within Sunderland Enterprise Park, from Topland Group. Insurance firm iResolution Group has now signed for 12,000 sq ft on the ground floor. Knight Frank and Connect Property are agents on the building, which overlooks the River Wear.
Developer: Thirteen Group
Designed by ID Partnership, the plans for 145 homes on a brownfield site close to Middlesbrough town centre received a grant of £8m in January 2023. Plans for the mixed-tenure Union Village project include a mix of apartments and townhouses in the residential element, along with food & beverage units and a business incubator. There is also the possibility of a leisure development and investment by Teesside University. Tees Valley mayor Ben Houchen said: “This money will offer a big boost to our game-changing projects in Middlesbrough. Gresham has been in dire need of investment for a long time.”
Forest Park, Newton Aycliffe
Developer: Richardson Barberry
Planning permission was secured just before Christmas for development at this 116-acre site, close to Junction 59 of the A1(M) south of Aycliffe Business Park, between Darlington and Durham. The consent accounts for up to 1.75m sq ft of development, including a potential single building of 1m sq ft. Agents say the local market is “primed” for the scheme, where Durham Council is spending £13m on infrastructure.
Southside business park, Middlesbrough Airport
Developer: Tees Valley Combined Authority
Plans were unveiled in February 2022 for a £200m business park following the airport being saved from closure and taken into public ownership by Tees Valley mayor Ben Houchen. The original deal for the overall airport site and surrounds includes 810 acres, the Southside element of which amounts to around 270 acres. A 130,000 sq ft first phase of four divisible units is mooted as the first phase, once a 1.5km A67 link road is completed this spring. Also at the airport, a £7m grant was secured in January for a new hangar.
One Strawberry Lane, Newcastle
Developer: Ask Real Estate
Ask has officially handed over One Strawberry Lane in Newcastle city centre to social housing provider Home Group. The 70,000 sq ft six-storey building, designed by Ryder Architecture and built by BAM Construction, is Home Group’s new headquarters providing a sustainable workspace for 700 of its 3,500 strong workforce. It will be open, accessible to the local community and is billed as being designed for post-Covid hybrid working. Home has taken a 30-year lease on the building, which was acquired by Canada Life Asset Management in 2020 for £30m. Two of the five floors will be let to external organisations.