Developers behind grand plans to create new offices, leisure and housing in the heart of Durham have secured a £120m package from investors.
The team behind the Milburngate scheme has received the forward-funding commitment from LaSalle Investment Management, which will drive forward the delivery of the first phase of the Durham City Centre project.
The project is being delivered in a joint venture by Durham-based property business Arlington Real Estate and the Richardson family, who have also worked together on several other regeneration projects across the North East, including Freemans Reach in Durham City centre.
Planning permission was granted for Phase One last December, covering 70% of the six-acre mixed-use development, and will serve up around 54,000sqft of office space – creating the potential for 400 new jobs – and 153 build-to-rent apartments, supporting Durham’s need to provide high-quality city centre work and living space.
Several leisure tenants have aready booked in for the first phase, including boutique cinema company Everyman, restaurant brands Marston’s Pitcher & Piano, Bar + Block, Miller and Carter and a 92-bed flagship Premier Inn hotel.
The developers are in the final stages of reviewing shortlisted construction tenders and will select their construction partner in the coming weeks, with the first phase set to be completed in early 2021.
Ben Holmes, on behalf of the Richardson family, said: “This is one of the biggest investment deals in the North East of England in the last 10 years. It will have a significant positive impact on Durham City and the wider region and demonstrates investor appetite for this type of project.
“Securing this funding from LaSalle, which will ensure the delivery of the first phase of this ambitious project, also demonstrates the confidence this respected financial institution has in the North East and the benefits of regenerating this unique part of this historic city.”
Allan Cook, managing director of Arlington Real Estate, said: “We are really pleased to have secured the funding for Phase One with LaSalle, which enables us to now move forward with the first construction phase.
“It is a testament to both the vision of the team and quality of the scheme that we have secured LaSalle as our funding partner and I’m sure delivery of Phase One will set a new benchmark not only for Durham City, but also the region.”
The Milburngate development initially saw Arlington and Richardson Capital working with Carillion, but the two remaining partners bought out the outsourcing giant weeks before its collapse.
Robin James, head of long income transactions at LaSalle Investment Management, said: “We are delighted to have entered into this long-term partnership with Arlington Real Estate and the Richardson family.
“This mixed-use commercial and residential development will create job opportunities in Durham and is an excellent example of where our client’s capital can be used to deliver major city centre regeneration schemes. We will continue to invest in such projects and have significant funds to deploy in other assets offering long-term, inflation-linked income streams.”
Image: CGIs of the updated design of the hotel development at Milburngate (Newcastle Journal)
Source: Chronicle Live