North East LEP’s investment fund kick starts work on £2.6m North Tyneside business park /
Work starts this week on the first speculative business park scheme north of the Tyne since the credit crunch, after developer the Hellens Group secured a £460,000 loan from the North East Local Enterprise Partnership’s (LEP) North East Investment Fund.
The £2.6m West Chirton project will provide a 34,000 sq ft, 17-unit space for businesses close to the A19. The project will employ over 150 during the building phase, which is expected to be completed by June next year.
Washington-based Hellens Group turned to the North East LEP, which manages the multi-million pound Growing Places Fund as part of its North East Investment Fund, to raise the loan to begin work on the business park. It also received a £1.1m from the European Regional Development Fund (ERDF) and invested its own money into the project.
Hellens chief executive, Gavin Cordwell-Smith said: “The banks aren’t lending for speculative property building even where there is a proven case and proven demand.
“The site is land we already owned and had bought pre-credit crunch to develop. The project was stalled for five years because we couldn’t get funding. It’s a very good location close to the A19 and just north of the Tyne Tunnel, just off the Silverlink roundabout.
“The offshore and manufacturing sectors are active on the north side of the Tyne at the moment and we hope to pick up demand from businesses for accommodation.”
Work is about to start at West Chirton as Hellens, which specialises in land and property regeneration, nears completion of the Teal Farm development that was also revived via a £200,000 Growing Places Fund loan and a £680,000 ERDF grant. The £1.2m project at Washington has four units and 19,000sq ft of space, and is due to be finished at the end of January. The scheme supported more than 100 construction jobs and is expected to lead to 124 more when the units are occupied.
Mr Cordwell-Smith said: “At Teal Farm, we had built a previous terrace in 2008 and let it at the height of the recession. But you still can’t get bank finance even though the demand is there. The LEP’s help has been vital. Without it we wouldn’t be building the business parks.
“We are very grateful to the North East LEP for supporting us. These are the first two speculative developments in the North East since the credit crunch.”
The North East Investment Fund includes the Growing Places Fund which is designed to provide loans for infrastructure, housing and economic development projects that stalled during the recession and have been unable to access finance from the banks. It reinvests loans to support future schemes.
Jeremy Middleton, chair of the North East LEP’s investment panel, said: “Hellens Group’s two business park projects are precisely the kind of developments that the LEP’s North East Investment Fund was set up to support.
“Both Teal Farm and West Chirton are well-located and well-thought out developments, which will provide quality workspace for new and growing businesses in North Tyneside and in Washington. They have created jobs during the construction phases and will provide accommodation for further job creation once they are occupied.”
Further information from Christine Holland, Holland PR & Marketing Ltd. Tel 01670 790246 or 07711 698246.