Newcastle upon Tyne forms the heart of the Tyne
and Wear district and is the regional, commercial
and administrative capital of the North East.
Newcastle has a resident population of 292,900
people, 11% of the north east population. (Source:
ONS 2015). The city forms part of the wider Tyneside
conurbation with a total population in the region
of 1.1 million people, making the city region the
7th largest in the UK. Newcastle upon Tyne is
located approximately 95 miles north of Leeds, 106
miles south east of Edinburgh, 200 miles north of
Birmingham and 282 miles north of London.
Newcastle has excellent access links via the A1(M), south to Leeds and north to Edinburgh. The dualling of the Tyne Tunnel, which completed in 2012, has significantly improved the road communications. The tunnel links North Tyneside to South Tyneside and the wider region via the A19 dual carriageway.
The city benefits from being on the East Coast Main Line, with fastest travel times to London (Kings Cross) in 2 hours and 40 minutes and Edinburgh in 1 hour and 20 minutes. The city also has the Metro, the North Easts urban transit system, supporting 60 stations throughout Tyne and Wear extending as far as Newcastle Airport (45 minutes from Cobalt Business Park and 28 minutes from the city centre).
Newcastle International Airport is located 6 miles north west of the city centre. It has been ranked the 10th busiest airport in the United Kingdom and the second busiest in Northern England, following Manchester Airport, handling 5.2m passengers in 2019. The airport has daily flights to Heathrow, Stansted and Gatwick with journey times of less than an hour. The airport serves other domestic destinations including Southampton, Jersey, Exeter, Bristol and Belfast as well as international destinations including Amsterdam and Dubai.
The property along with the adjacent Quadrant East provides the principal administrative and civic hub for North Tyneside Council and comprises a modern 4 storey office building, which was completed in February 2007.
The building is of steel framed construction and features a glass façade on 2 elevations of the property and brickwork and composite panels on the remainder. All the cladding has been recently inspected and found to be fully compliant with all regulations and represents low risk.
The building provides large open floor plates over 4 floors with a double height feature reception area The accommodation has been fitted out to a high specification to include:
The property is held on a long leasehold from Highbridge Business Park Ltd for 125 years (less 6 days) from 29th March 1996, expiring on 22nd March 2121, giving 99.5 years unexpired, at a peppercorn rent without review. The ultimate freeholder is North Tyneside Council.
The entire property is let to North Tyneside Council on a single lease from 1 July 2009, expiring 20 November 2032 (11 years unexpired) at a current base rent of £720,698 (£15.72 psf) subject to annual uplifts to 2.6% pa.
The tenancy is a 'Lease Plus' agreement, which leaves the responsibility of hard FM and lifecycle costings with the landlord, meaning in practice the responsibility and costs of all repairs are the landlords, although this and the cost risk associated with it, has all been passed on to a third party provider as subsequently detailed. In return for taking on this burden the landlord is paid an additional rental, currently £352,633 (£7.69 psf), which is increased annually by RPIx.
Buildings insurance and estate service charge is paid by the tenant in the usual way.
There is a restriction on assignment, with the tenant only able to assign to a public sector body, or somebody who succeeds or carries out all or part of the functions of the tenant.
The tenant has an option to purchase the property during the period 27 June 2032 to 20 November 2032, at open market value, subject to the lease and disregarding any special purchaser.
[The tenant has a right of pre-emption on first sale of the landlord's interest. We have spoken to the Head of Strategic Property at the Council/served notice on the Council, who has/have confirmed that they do not intend exercising the right of pre-emption]
NTC have sub-let the first floor to Accenture (UK) Ltd on a 5 year lease at the headrent payable from 2016. They also share possession of the second floor with Capita, under their partnership agreement.
North Tyneside Council
North Tyneside Council is one of five unitary local authorities in the Tyne and Wear conurbation placing the borough at the heart of a wider strategic area encompassing over 1.47 million people. The borough covers an area of approximately 6,026 square miles (2,326.5 square km) and 208,871 residents.
In the year 2020/21 the Council had gross expenditure of £713.2m and useable reserves of £155.3m.
Grosvenor Facilities Management Ltd
Grosvenor Facilities Management is a Harrogate based provider of the full spectrum of hard and soft FM providers with a range of customers in the office, leisure and healthcare sectors. It is pertinent to note that in the unlikely event of the failure of GFM, the FM surplus would still exist if the contract were retendered to an alternative supplier at the same cost.
Further information can be found within the link below.
VAT is payable on purchase price. It intended to treat this transaction as a Transfer of Going Concern (TOGC).
Offers are invited in excess of £10,200,000 subject to contract and exclusive of VAT. A purchase at this level reflects a net initial yield on the base rent of 6.62% and 7.39% on the total net income after allowing for purchasers costs of 6.70%.