Palace bought the building in 2017. Credit: Place North

Orega signs at 2 St James Gate

In a significant deal for Newcastle’s central office market, the flexible workspace provider has entered into a 15-year management agreement for 22,500 sq ft across two floors.

In a trading update on activity since 1 April this year, released ahead of its annual general meeting, landlord Palace Capital revealed that Orega has taken the second and third floors of 2 St James Gate, a seven-storey, 82,500 sq ft building.

Following a comprehensive refurbishment and fit-out over the summer, the operation will open this autumn, bringing around 400 workstations to the site.

Orega is a well-established operator in the serviced and flexible workspace field, and securing the firm is a major plus for the central Newcastle market. As well as several operations in Manchester, Orega also has centres in Liverpool and Leeds within the North of England.

In what it described as the firm’s key letting for the period, Palace said that the transaction significantly increases the occupancy at the property from 64.8% as at 31 March 2023 to 87.5%.

Palace said that the Orega deal, together with the letting to Softcat in December 2022, are the first two major deals at St James’ Gate since the property was acquired in 2017, when the firm paid £20m for numbers 2 and 3 St James Gate.

Close to Newcastle Central station, the building is described as one of the few column-free large floorplate office buildings in the city.

The firm’s year so far has been characterised by debt reduction; it has offloaded most of its industrial portfolio, along with an office and retail holding in Liverpool.

Steven Owen, interim executive chairman, said: “At an operational level, the company continues to make good progress with its asset management activities notwithstanding the difficult and uncertain conditions in financial and property markets.

“We remain focused on maximising returns to shareholders through active asset management and the orderly, selective, and timely disposal of properties.”

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