DARLINGTON'S relative wealth and space make it an attractive location for developers, say three North East property experts.
GIVEN the fall in new-build construction across the North East during the recession, Darlington has been extremely active and successful in terms of recycling older buildings to accommodate property requirements, bringing thousands of jobs to the borough.
Leading the recycling of former industrial premises is Lingfield Point, now the home to in excess of 2,500 employees working in state-of-the-art refurbished offices in the former Paton and Baldwin wool factory.
Major employers include the Student Loans Company, which leases 70,000 sq ft in the spectacular Memphis building which is an attractive working environment for its employees.
The building won several awards including the best refurbished/recycled workplace in the UK at the National British Council for Offices (BCO) Awards and the best Commercial Property Development in the RICS North East Renaissance Awards in 2009.
More recently, the letting of the Meadow building to Amec to re-locate 500 staff has broadened the private sector presence at Lingfield Point and represents the largest take-up of office space in Darlington for several years.
The recycling effect is further emphasised within the leisure/sports sector by Mowden Park Rugby Club who have acquired and are relocating to the former Darlington Football Club stadium and surrounding land.
Bellway Homes will then develop circa 70 new homes on their rugby ground at Yiewsley Drive where Mowden Park played for 40 years.
The Department of Education is also considering a relocation from the Grade II Listed Mowden Hall, an occupier and employer which the local authority will be keen to keep within the Borough of Darlington.
The Bannantyne Leisure Group has also recently announced completion of its £2.8m investment in a new head office in Haughton Road to house 80 staff. That represents a tremendous vote of confidence in Darlington as a location from which to run the national leisure business.
Within the industrial sector, the recent move by Clipper Logistics to Wynyard Park from a 170,000sq ft warehouse at Faverdale Industrial Estate has seen the building re-occupied by Capita Business Services on a 10-year lease for document storage.
GVA is currently marketing the nearby 170,000 sq ft former Amdega Ltd building on a 13.4 acre site at Faverdale which has stimulated a good level of interest from potential occupiers with an early disposal anticipated.
The combined effect of the above confirms considerable business activity and confidence within Darlington which not only markets itself as the Gateway to Tees Valley but has the added advantage of being located on the East Coast main line railway route, close to the A66 and A1 trunk roads.
However, the lack of new-build employment buildings has stimulated great activity in terms of recycling and refurbishing former industrial premises/land for a variety of uses and this has boosted the local economy and brought employment opportunities to the town.
:: Tony Wordsworth and Danny Cramman, national markets, GVA
TOWN IN GREAT POSITION FOR INVESTMENT
DARLINGTON’S unique socio- economic profile and its location as the gateway to Teesside gives the town great appeal to occupiers and investors alike.
With some 450,000 people living within 12 miles of Darlington and its unusual wealth profile, with five categories above national averages such as ‘wealthy achievers’ and ‘well off workers’, the town’s reputation as a wealthy market town is well-founded.
Its catchment includes the south of County Durham and the northern areas of Yorkshire with much of Teesside and the links via the A1(M), A66 and A19 means access can be achieved quickly and efficiently.
It also has a reputation as a business town with a manufacturing base and a location for inward investment.
It is just two hours from London by East Coast rail and its access to markets both regional and south to the M62 corridor makes Darlington a good place in which to do business.
This may be noticed by investors. The proposed Everything Everywhere (EE) national call centre and data centre will come to the market shortly seeking investment and development funding.
EE is the new brand for T Mobile and Orange Communications following their merger to become the UK’s largest communications company. Subject to forward funding, a 88,400sq ft building will be on site this summer for delivery for occupation by spring 2015.
To be developed by Stoford in two phases, the likely investment value will be circa £29m.
There are other investment opportunities including the Toby Carvery at Yarm Road Interchange for £1.361m reflecting a net initial yield of 6.25% and the Old Exchange in the town centre which is occupied by the Sunderland Teaching Primary Care Trust for £2.1m and a net initial yield of 8.75%.
With the prominent town centre Northgate House office block now under offer and the 166,734sq ft Stead House distribution facility at Faverdale let to Capita Business Services Ltd, the property market in Darlington is clearly very active.
The Terrace Hill leisure scheme at Feethams – a long overdue boost to the town centre offer, will provide a 140,000sq ft leisure offer at the heart of the town centre with a nine- screen multiplex cinema and associated restaurants, together with a new 80-bed hotel.
With advanced discussions already in place with the cinema operator VUE, and planning due to be submitted imminently, the scheme is likely to be open for trade by December 2014.
While other ambitious retail schemes have failed to materialise, it is encouraging for the town that new development within the town centre looks finally to be taking shape.
:: Greg Davison, investment associate, Knight Frank.
Long awaited investment puts area in the spotlight
THE commercial property market remains very challenging indeed, with the credit crunch and subsequent economic recession having had a major and well publicised impact across all sectors.
This being said, there is some transactional activity where parties are prepared to adopt a sensible view on values and/or lease terms.
Within Darlington town centre, the most notable development has been Terrace Hill’s proposal to bring forward the 0.75 hectare former bus depot site at Feethams next to the Town Hall.
The proposed £30m scheme is to include a nine-screen multiplex cinema, an 80-bedroom hotel, and a family pub with associated bars and restaurants, and has the potential to create up to 500 jobs.
Darlington has been crying out for a quality leisure offering for many years now. This scheme should bear testament to the fact that there will be a sufficient catchment on which to draw – south Durham, North Yorkshire and the Dales – in order to compete with Showcase and Cineworld in Stockton and Middlesbrough respectively.
This will also presumably be the death knell for the Oval scheme on the Commercial Street site.
"The town awaits news on the Department of Education's proposed relocation of 400 staff from their ageing site at Mowden Hall.
Apparently the DOE is expecting to find a new site in either Newcastle or Darlington.
"There are at least two potential buildings in the town, Northgate House and Lingfield Point, and further options elsewhere in the Tees Valley including properties on which Storeys Edward Symmons are instructed.
Taking into account staff issues, most cannot understand why Newcastle is a potential option.
Lingfield Point’s continued success saw the town’s largest office transaction of 2012, with AMEC acquiring 47,000sq ft of space at Meadow accommodating 500 staff. Attention is now turning to the next phase, Rocket, a 100,000 sq ft single floor building created out of the original wool factory, with a capacity for more than 1,000 people.
Last October, the Government rejected Durham Tees Valley Airport’s application from the Regional Growth Fund to construct a freight operation on land to the south of the passenger terminal.
However the Government has recently launched another round of the job creation fund, which may give the airport a further opportunity to progress its plans.
The funding may be utilised to provide a link between the existing airport facilities to the north of the runway and new employment land to the south, opening up this area for aviation and logistics services.
For the latter use, there would certainly be stiff competition from other established logistics schemes at Wynyard, Faverdale and Aycliffe.
The industrial market in the town generally seems to be dogged by a lack of reasonable quality stock. What space there is has seen rental values hold up reasonably well.
For example Landteam, for whom Storeys is acting, has just secured a letting to Signature Systems on an 11,000 sq ft unit at its Blackett Road scheme at a headline rent approaching £3.50 per sq ft.
However, this lack of stock could arguably be a reason why the Aycliffe Industrial Estate, a few miles north west, appears to be experiencing a mini resurgence in recent months, with a number of transactions having occurred, or in the pipeline.
A wide variety of space has been available at competitive rents and capital values.
This has clearly proved an attraction along with its proximity to the A1.
This momentum will no doubt be reinforced by Hitachi, as its project progresses following the procurement of a £4.5bn order from the Department of Transport to build the next generation of high speed intercity trains.
:: Andrew Wright of Storeys Edward Symmons’ Teesside office