Developers behind a speculative £1.2m business space completed through North East LEP funding has repaid the £200,000 borrowed from its investment fund after securing two new tenants.
Teal Farm Park, built on former industrial land at Washington, opened for business in February and is already filling up fast, with the latest tenants coming from the rapidly growing automotive supplies and oil and gas sectors.
Cam Automation Ltd, a specialist in industrial automation design and manufacture, supplies Nissan and others in the region’s automotive supply chain, and has expanded from its former base in Sunderland.
Meanwhile, Abfad Ltd manufactures products to protect chemical and fuel storage tanks, and provides rope access personnel to safely work at height in the power generation, renewable, oil and gas and other heavy industry sectors.
Gavin Cordwell-Smith, chief executive of the Hellens Group, the Washington-based property developer and land regeneration firm behind Teal Park, said: “We had already let two units and these two additional lettings put us ahead of where we anticipated being at this point.
“The new tenants are in two key sectors for the North East and are existing businesses with a good track record that were looking for space to expand.
“We also have interest in the final two units, and we are hoping to make an announcement about them in the near future.”
The first phase of Teal Farm was finished shortly after securing planning permission in 2007.
However, the economic crisis forced Hellens Group to hit the pause button as securing development funding proved problematic.
Hellens applied to the North East LEP for a £200,000 loan from its North East Investment Fund, which includes Growing Places and Regional Growth Funds, to complete the development of two terraces of industrial units.
It also received £1.1m from the European Regional Development Fund (ERDF) and invested its own money into the project.
Mr Cordwell-Smith said: “The LEP’s help has been vital. The North East Investment Fund has done exactly what we needed it to do while we were developing the unit, which is very cash intensive.
“Now our units are 50% let, we have been able to access more traditional funding in the form of a commercial loan from Allied Irish Bank, which has allowed us to pay back the North East LEP. The demand is there for new business units as there hasn’t been anything built in the region for some time, so there has been pent up demand as a result.
“We understand it’s the first full repayment of a loan, which allows the North East LEP to recycle the money and lend it out to other projects.”
Teal Farm Park Phase II development comprises four units and is expected to lead to 124 jobs when the units are fully occupied.
Hellens also received a £460,000 loan from the North East Investment Fund for its West Chirton business space development in North Tyneside and expects to be in a position to repay that within the next 12 to 18 months.
North East LEP chairman, Paul Woolston, said: “The business park is helping to attract further investment and growth for our regional economy, and I am delighted the LEP’s Investment Fund finance was able to make completion of the park possible.
“Hellens has repaid the investment extremely quickly, and because this is an evergreen fund, that money will go back towards helping other schemes designed to create further growth and prosperity for the North East.”