The North East Local Enterprise Partnership has agreed funding to help build a new £7m trade park adjacent to the A1(M) at Birtley, which is expected to create more than 200 jobs.
Portobello Trade Park will be the first new speculative light industrial space to be provided in Gateshead for more than six years.
The park, on a 6.5 acre former brownfield site in a highly visible location next to the motorway, will provide 15 high quality light industrial units for SMEs.
Planning permission for the new development next to Portobello Industrial Estate has been granted by Gateshead Council.
Work is scheduled to start in the last week of July and be completed by May next year.
Once fully occupied, the park is expected to support around 244 jobs in units ranging from 195 sq m (2,100sq ft) to 2,137sq m (23,000sq ft), in an area that suffers from a lack of suitable light industrial space.
The enterprise partnership is providing a loan of £982,000 from the North East Investment Fund to developers Ravensworth Property Developments LLP.
Durham-based Ravensworth has also received £2.75M from the European Regional Development Fund to complete the £7m funding package
Ravensworth’s development manager, Geoff Clark, said: “The bank financing position is still very tight for speculative schemes in the region.
“The North East LEP is filling the gap between available bank finance and public sector funding, without which speculative schemes for SMEs would not get funded. Ours is a perfect scheme for them – in and out, and the money repaid quickly.
“This is a high quality, sustainable scheme in a key strategic location and the enterprise partnership has been very supportive.”
Ravensworth has spent five years assembling the land at the gateway to Gateshead and successfully applied for a change of use to allow it to be used for employment.
It has already received more than 60 speculative enquiries from prospective tenants, ranging from trade counter operators who like the prominent location, to engineering and warehousing users looking for modern high bay units.
Clark said: “This is a very attractive location for businesses that need to be close to the motorway.
“It’s a highly-visible, easily accessible site, and the high level of enquiries prior to construction commencing is very encouraging.”
The North East LEP agreed to part-fund the development after appointing an independent surveyor to appraise the plans and listening to a presentation by Ravensworth about the benefits of the project.
North East LEP chairman, Paul Woolston, said: “We are delighted to have helped fund the Portobello Trade Park with a loan from the North East Investment Fund.
“Ravensworth has a strong track record in delivering projects and this scheme ticks many of the boxes in the LEP’s priorities and objectives, including developing skills and employment; supporting enterprise and private sector business growth; and strengthening transport, connectivity and infrastructure in the region.
“The prime location of the park next to the A1(M) is an ideal location for a new business park. It’s also a very visual reminder to thousands of daily commuters about the benefits of development through the North East Investment Fund and working with the LEP.”
Anyone interested in taking space at the new development should contact joint agents HTA Real Estate or Naylors Chartered Surveyors.