Merchant Park Developments have announced plans to invest up to £ 9million in the first phase of a new commercial development located at Merchant Park, Newton Aycliffe. Phase One will bring 198 jobs to the area, with plans to create a total of 1014 jobs when all three phases of the site are completed.
Merchant Park is a 65-acre development at Aycliffe Business Park on J59 of the A1(M) and home to the 30-acre Hitachi Rail Europe train manufacturing facility, one of the largest inward investment manufacturing developments in recent years. This latest addition to the site on Millennium Way is a 17-acre (6.88ha) development adjacent to the Hitachi train facility. It will comprise of three warehouse units with construction now commenced on Phase One of the development. Phase One will occupy 52,500 sq ft, with planning consent for the remainder of the scheme for 89,000 sq ft and 126,000 sq ft premises.
Funding to support the development has been provided using a seven-figure senior debt package provided by FW Capital under the North East Commercial Property Investment Fund which is managed by FW Capital and backed by the North East Combined Authority (NECA). An incentive has also been provided by NECA to support the immediate financial viability gap for the first phase which includes infrastructure costs for the following two phases.
Construction has started with local firm Hall Construction Services and the development is being marketed by letting agents Jonathan Simpson at Connect Property and Dave Cato at CBRE. Chris Dixon and Lesley Telford represented FW Capital.
North East Mayor, Kim McGuinness, said: “I’m delighted to see Merchant Park Developments’ ambitious £9million investment come to life. This project, which will create over 1,000 jobs across its three phases, is a clear demonstration of how targeted financial support can unlock opportunity and drive economic growth. We have used our Commercial Property Investment Fund to make a difference and make sure game-changing projects like this get off the ground. This partnership between the public and private sectors creates jobs and makes communities stronger.”
Geoff Hunton, Director Merchant Park Developments said: “We are delighted with the support we have received from all parties in moving this phase of our development of Merchant Park forward. As well as driving growth in the local economy through the creation of new jobs, we are meeting our aspirations for the Park following the completion of the Hitachi Project in 2015.”
Adrian Goodall, Merchant Park Developments said: “Following the successful completion of the starter unit scheme Station Place, we’re pleased to now launch the first phase at Millennium Way. The initial funding from FW Capital and the North East Combined Authority is supporting the building and infrastructure requirements. It’s given us the confidence to kick start the development and regenerate a previously barren site. We’re also meeting the demands for quality commercial warehouse and office space, something that is in short supply in the area. Reaching the BREEM Very Good* standard is also important to us as we take our ESG and net zero commitments very seriously.”
Chris Dixon, Senior Investment Executive at FW Capital added: “Merchant Park Developments have a fantastic track record led by a highly experienced team of directors. This latest development is championing the potential of the local area, giving businesses access to quality premises and encouraging growth. It’s also the first time we’ve been able to combine funds from the North East Commercial Property Investment Fund with the benefits of the incentive provided by the North East Combined Authority. Being a speculative development, we’re also showcasing how the North East Commercial Property Investment Fund can help these types of schemes get started and come to fruition. It’s a great project to be a part of and we’re pleased to help them.”
The North East Commercial Property Investment Fund is a £35million fund which provides loans of up to £7 million to support both non speculative and speculative developments for new build or refurbished commercial projects. This includes industrial units, distribution facilities or office schemes located in the seven authority areas: Northumberland, County Durham, Gateshead, Newcastle upon Tyne, North Tyneside, South Tyneside and Sunderland. Repayments will be reinvested in new schemes, creating a total investment of £119 million into commercial property in 15 years. It aims to create 5,600 jobs and develop 140,000 sq m of commercial space.
*BREEAM supports solutions to reduce carbon emissions to net zero, improve whole life performance, manage health and social impacts, boost circularity, resilience and biodiversity, and support disclosures and reporting.
