Developers in talks to to save £14m Newcastle student scheme after contractor's collapse

Work is continuing at Blandford Square despite administrators being called in at GB Group Holdings and GB Building Solutions Ltd

A CGI of the Blandford Square student accommodation development which is being carried out by Nixon Homes
A CGI of the Blandford Square student accommodation development which is being carried out by Nixon Homes

Developers are said to be in discussions in a bid to keep a £14m student accommodation scheme in Newcastle on track after a contractor collapsed.

Surrey-headquartered GB Group Holdings Limited and GB Building Solutions Limited, which also has offices in Newcastle, Rugby, Wakefield and Stockport, called in administrators BDO at the start of the week.

The collapse of the firm has resulted in the loss of 350 jobs, as well as temporarily halted a number of projects in the North East and further afield while solutions are sought to keep the schemes going.

The project management specialists, which employed around 60 in the North East, have been working on the £7.1m revamp of the Tyne pedestrian and cycle tunnel, the construction of a new £7.5m Premier Inn hotel in Sunderland and Northumberland County Council framework projects, all of which have been delayed as alternative solutions are explored.

However, the firm’s collapse of GB Group Holdings and GB Building Solutions has not stopped work at Blanford Square in Newcastle, where Leeds-based developer Nixon Homes has been creating a 388-bedroom student building with contractors the firm.

The development, on land adjacent to the Discovery Museum at Blandford Square, was first unveiled in August 2013 when Nixon Homes submitted a planning application to Newcastle City Council.

As well as providing a selection of studio flats, the scheme is set to include a small commercial unit on the ground floor, and is estimated to have the potential to contribute £1.1m of annual expenditure associated with the growing student population within the city and create around 10 full and part-time jobs.

The developer declined to comment but work is continuing at the site and it is understood that talks are being held that will hopefully result in the multi-million pound project continuing.

Accommodation in the building is being advertised to rent through national student accommodation provider Derwent Students, which operates student properties in 12 other UK locations, with prices ranging from £130 per week to £199 per week, with bills included. Other facilities are set to include free WiFi, social events, quiet study rooms and a free on-site gym.

Tony Nygate, of administrators BDO, said the building firms experienced a serious deterioration in their working capital position and as a result were unable to continue to operate.

He sad: “Regrettably, it has been necessary to make all employees redundant, save for a small number to assist the administrators.”

Mr Nygate said he was seeking buyers for parts of the businesses or its assets.

Meanwhile, Newcastle-based specialist recruitment business AJP has pledged to offer a fee-free service to help those who lost their jobs with GB Building back into work.

A spokesman for the company, which specialises in seeking recruits for the construction and engineering sectors, said: “We were saddened by the recent collapse of GB Building which has had a real impact on the livelihoods of a significant number of construction personnel in the North of England especially.

“We would like to do our bit to help the people who have lost their jobs recently and so will be offering our services completely free of charge for March and April should any clients wish to hire any of the many ex-GB staff that we’ve been in contact with.

“There is no catch and no hidden agenda, if we can find an ex-GB person who has recently lost their job to fill a role then we will perform the complete recruitment service at no cost.”

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