Hotel and shops plan for former Co-op building in Newcastle

The former Co-operative department store in Newcastle city centre, which has lain empty for some years, is being brought back to life as a mixed-use scheme, incorporating leisure facilities, hotel accommodation and retail units

The former Co-operative department Store on Gallowgate, Newcastle
The former Co-operative department Store on Gallowgate, Newcastle

The former Co-operative department store in Newcastle city centre, which has lain empty for some years, is being brought back to life as a mixed-use scheme, incorporating leisure facilities, hotel accommodation and retail units.

International support services and construction group Interserve Plc will work in partnership with DTZ Investment Management to develop the iconic building.

The former department store, a Grade II Listed building, has been sold by the Co-operative Group to DTZIM. It will be refurbished by Interserve to provide retail and leisure units on the ground and basement floors. The total scheme is valued at more than £30m with the construction contract worth £17m.

Among other occupiers, Premier Inn will operate a 184-bed hotel at the site, with the refurbishment of the building expected to be complete by December 2015. Interserve is to manage delivery of the project on behalf of DTZIM.

The Art Deco building extends to nearly 170,000 sq ft over six floors and has been a feature of the city’s skyline since it opened in the 1930s. The sale also includes the adjoining NCP car park and Landmark Chinese restaurant in Stowell Street.

Interserve Developments managing director Dougie Sutherland said: “The collaborative approach between Interserve, Premier Inn and DTZIM has ensured that this complex scheme is now viable and can be progressed.

“We have worked closely with the local authority over a number of months and we are now in a position to progress construction works on this major city centre project. This project further demonstrates our ability to deliver innovative solutions in property development and we are progressing a number of further schemes.”

With its twin towers, sweeping curves and huge windows, the city-centre building was once Newcastle’s most elegant shopping outlet.

DTZ Investment Management senior director David Hyland said: “We look forward to working with Interserve and the future occupiers of the property to deliver a first class leisure development worthy of the iconic nature of this Newcastle landmark building.”

Construction work on the project will be led from Interserve’s Newcastle office and is expected to start in a matter of weeks.

“Interserve will work closely with local supply chain partners on the development, which will provide significant local employment opportunities.

Whitbread Hotels and Restaurants senior acquisitions manager Kevin Murray said: “We are delighted to be a part of this innovative and interesting project with our development partner Interserve and DTZIM,.

“We hope the new Premier Inn will be a positive and valued addition to the local area. We look forward to working with Interserve and opening our doors to our customers as soon as possible.

“We will shortly commence working with Newcastle City Council and other local employment agencies to create more than 50 jobs for the local area.”

Sanderson Weatherall sold the site on behalf of Co-operative Group for £9m.

Bob Fletcher, director at Sanderson Weatherall, who acted for Co-operative Group, said: “This transaction clearly demonstrates the attraction Newcastle still holds as a centre for leisure and retail uses and for inward investment by a major pension fund.

“Our instruction began 12 months ago and it has been a privilege and a challenge to have worked on such an iconic building with so many complex intricate issues.”

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