NEWCASTLE - London’s property growth has been extensively reported but other regions of Britain are showing promising signs of life with their local property markets. Current reports show that while home prices have slowed in various parts of London investors seem to be looking at other areas for potential growth mainly in the northwest of England in Newcastle Upon Tyne. Originally, the city was known for its coal mining and related industries but has since become more diverse with commercial ventures, corporate entities, education, retail and tourism all of which add billions of pounds to Britains Gross Value Added. The population of Newcastle rose 5.3% from 266,200 in 2001 to 280,200 in 2011 according to the Office of National Statistics.
A 2015 report by home.co.uk showed that of the 5,077 homes available for purchase the average price was at £161,258 with a median price of £129,000. The average time on market (ToM) of unsold property in Newcastle upon Tyne was 279 days while the median time on market (ToM) of unsold property was149 days. Houses with prices £400,000 to £500,000 were on the market the fewest at 245 days and those asking £500,000 to £1,000,000 had the most days on the market at 91. The most number of homes for sale were in the price range of £100,000 to £200,000.
By 2017 Zoopla reported: ‘The current average value in Newcastle upon Tyne in March 2017 is £202,291. This has decreased 0.10% from December 2016. Terraced properties sold for a current average value of £173,360 and semi-detached properties valued £194,656. In the past year property prices in Newcastle upon Tyne have increased 1.92%.’
One particular area of real estate that has seen its share of property growth is in student housing for Northumbria University. In the 2014-2015 period with the most notable development being a five-storey 206-bed building, on Clarence Street in Shieldfield, Newcastle. This plan will featured a modular designed property built by Sir Robert McAlpine and Premier Interlink. The plans were approved September 2013 with accomadations beginning the first semester of 2015. BAM Construction and Connislow also won approval to build a 410-bedroom student housing facility spread over three buildings at a site on Stoddart Street for £16m. On BAMs website David Cotton, BAM’s Business Development Director stated:
“BAM has a thorough understanding of the University sector. We have built more than 100 university faculty and accommodation buildings in the past ten years and we understand that competition to attract the most talented students is global. “The availability of quality student accommodation, especially for post-graduate and international students, is an important factor for universities…’
But while the new student housing projects are needed due to increased enrollment they are also being met by local residents who are concerned because of increased fears of traffic chaos, noise and anti-social behaviour. Popularity of British universities by citizens from other countries, mainly from Asia, has helped to not only increase student enrollment but also property investment by parents wanting good accomadations for their kids and as an investment at the same time.
In January 2017 The Chronicle & Journal reported that ‘Three Newcastle student accommodation schemes have been bought by US investors as part of a £120m deal – including one that hasn’t even been completed. Union Square and Stepney Yard, both developed by Adderstone Group in the Ouseburn area of the city, will soon be managed by new owners following the huge deal completed by Starwood Capital Group and Round Hill Capital.’
The two companies, in a joint venture, and four others around the UK, will be funding a development scheme in Newcastle to be finished by 2018. ‘The full portfolio includes 1,595 beds in Newcastle, Edinburgh, Cambridge, Southampton and Glasgow.’
In its H1 2014 property review Knight Frank stated that, ‘Evidence suggests that prime headline office rents in the city centre have remained static, at £21.50 per sq ft. The net effective rent equates to c. £17.50 per sq ft when rent free incentives are taken into account. As at end Q2, Grade A supply in the city centre – including Gateshead Quays - stood at 217,000 sq ft, down 11% year on year.’ The report also mentioned the mixed use development of Stephenson Quarter in Newcastle’s city centre. Once completed the property will include 35000 square feet of office space. ‘As at end Q2, Grade A supply in the city centre – including Gateshead Quays - stood at 217,000 sq ft, down 11% year on year. Choice is now relatively restricted, and it could be argued that this may stymy levels of Grade A take-up moving forward.’
One of the most anticipated in commercial development in 2014 was the refurbishment of 10,000 square feet of office space by BNP Paribas Real Estate in the historic Grainger Town. BNP was hired by Norham House Estates to redevelop the property at 41-51 Grey Street for the much needed space. In a statement Aidan Baker, director of BNP Paribas Real Estate's Newcastle office, has said: "The available office suites, situated on the first and second floors, coupled with the imminent refurbishment offers rarely available top quality office accommodation in the heart of the city.’ Leases may be secured for individual or all space with a new lease or leases for a five year minimum term. He also added, "The building itself benefits from an unrivalled location on Grey Street, which is widely regarded as one of the finest streets in England and is in close proximity to the city's main commercial and café areas.”
For 2017 one of the latest property sales was the recent purchase of the 21 Cobalt Park by Newcastle Building Society (NBS).
The Chronicle & Journal reported: ‘The purchase of the 99,294 sq ft of grade-A office accommodation comes a week after Newcastle Building Society announced significant growth and solid financial results, when the society said it has seen continued success on the back of an investment programme to boost customer services, within its branch network, online and over the telephone.’ Financial terms were not disclosed but a similar property is reported to have been purchased for £13million.
The purchase will also make Newcastle Building Society the landlord for comapanies such as Hewlett Packard, Proctor and Gamble and Accenture as The Cobalt Park is the UK’s largest business property with two million sq ft of
commercial space and 14,000 staff.
NBS also has purchased ‘Cobalt 9b, a 52,000sqft office building let to Siemens Energy Service for £8m and Cobalt 15, a 93,500 sq ft office building let to the Department of Work and Pensions for £13m.’
Also for 2017 are the proposed plans by Stonegate Developments for a 25-storey 82 meter high tower which if approved would provide 162 private rental apartments. The building to be located at St James’s Boulevard has met some resistance from local residents saying it take away from the historic architecture that exists now at the developments location. Supporters however see the development as necessary to continue the economic regeneration of derelict building and surrounding infrastructure.