Developer to convert prominent office block into apartments after £20m funding deal
Manchester property developer, Beech Holdings, has secured a £20m development facility from Bank of London and The Middle East (BLME) to convert a Newcastle office block into a residential scheme.
The development will include 241 residential apartments under its co-living brand, ‘City Co-Living’.
It will comprise a mix of studio and one-bed apartments being created with co-living communal spaces on the lower-ground floors. These amenities will include a commercial-sized gym, private residents’ coffee lounge, yoga and spin studios, a Newcastle community accessible event space, co-working area, bookable private dining rooms and kitchen for holding dinner parties, and an AV/cinema lounge.
Office to residential conversion has become increasingly popular in recent years, with changes to permitted development rights (PDR) regulation in 2020 making it a much more viable option.
The deal marks BLME’s fourth transaction with Beech, following the successful completion of three projects in Manchester.
Stephen Beech, CEO at Beech Holdings, said: “As a developer committed to ‘levelling up’ the regions, especially those across the North, we are incredibly excited to be realising the potential of the former Cale Cross House building, and injecting some much needed, high quality properties into Newcastle’s property market under our exclusive co-living brand ‘City Co-Living’.
“Already a landmark in the vibrant Quayside neighbourhood, our aim is to transform it into a modern icon at the heart of a city benefiting from significant investment – and we welcome the opportunity to work with BLME, a bank which clearly recognises the huge potential in the UK’s regional property market.”
Anna Barratt, director, real estate finance at BLME, said: “The conversion of office blocks into residential accommodation is something we expect to see more of, as changes to working habits prompt organisations to re-evaluate their office requirement. It’s great to see so many of these previously redundant buildings being repurposed.
“We also anticipate growing interest in regional assets in 2023, and this development is a perfect example of the types of opportunities available to investors willing to look beyond London.”
She added: “Cale Cross House is in a prime location, just next to the iconic Tyne Bridge and within walking distance of Newcastle’s vibrant Quayside area. It will provide residents with exceptional views across the city.”
Ashraf Al Sawafiry, head of wealth management GCC at BLME, said: “We have noticed that Gulf-based high-net-worth families have been increasingly looking for opportunities in the UK property market in recent months. It remains a key aspect of their investment portfolios.
“Cale Cross is a unique residential property in Newcastle, with great amenities, and will be very attractive for graduates and young professionals.”
Cale Cross House is one of the tallest buildings in Newcastle and Beech Holdings said that brings responsibility to adhering to the highest levels of health and safety for residents’ peace of mind and their overall safety.
The company said it is already complying with the yet unpassed Draft Building Safety Bill and will be putting every possible safety measure into the building with the guidance of its building safety manager.
City-Co Living Newcastle will be welcoming residents from September 2023.