UK Land Estates, with its joint venture partner Highcross, announce the buyout of the Homes and Communities Agency’s interest in their joint venture, North East Property Partnership.
North East Property Partnership (NEPP) was established in 2004 when the Regional Development Agency sought a private sector partner to manage and operate its commercial property interests in the North East for a ten year period. These interests extend across the whole of the region and include many of its key industrial and commercial centers – for example, Team Valley Trading Estate in Gateshead, South Nelson Industrial Estate in Cramlington, Pallion and Pennywell Industrial Estates in Sunderland and Teesside Industrial Estate on the outskirts of Middlesbrough.
The venture has been a huge success, with the estates housing some of the North East’s most vibrant and growing businesses – for example Express Group, Cotswold, Decorative Panels, Culpitt, Gateshead College, Rettig, De La Rue and Rolls Royce.
David Curtis, Executive Director for the North East, Yorkshire and The Humber, said: “During the last nine years, the partnership has supported important businesses throughout the North East. As the company was due to wind up next year, this was the right time to review the future of the partnership and ensure it continues to underpin growth in important industries. This is a good deal for the region that will enable UK Land Estates to invest in its core business of supporting industry while the HCA focuses on investing in housing and economic development that will promote growth across the region.
“The immediate benefit to the North East is that over the next two years it is expected that the income from the sale of assets to UK Land will support new priority projects for our local partners including 4 employment incubators in Blyth, Darlington Middleborough and Stockton as well as ensuring our on-going commitments to fund projects such as Middlehaven in Middlesbrough, Central Park in Darlington, Lower Ouseburn in Newcastle, and the former Swan Hunter’s Yard in North Shields.”
The sale ensures that the operation and ownership of these key North East assets remains firmly located in the region. UK Land Estates has its head office on Team Valley and a management team that has lived and worked in the North East for a number of years.
The Managing Director, Michael Spriggs, said “These business parks represent an exceptional asset for the North East where engineering, manufacturing and exporting are flourishing. This deal ensures that going forward these parks are managed and invested in for the benefit of the business community and the Northeast’s economy generally”.
The buyout of the Homes and Communities Agency has been partly supported by a lending facility jointly arranged and provided by The Royal Bank of Scotland (RBS) and Santander. Following the buyout, UK land Estates plans to develop and improve the estates, which was one of the main attractions of the deal for the HCA.
Stuart Heslop, RBS Managing Director, Real Estate Finance for Scotland and North of England, said "We are delighted to be supporting the buyout of these assets which support significant employment in the North East. It is vital for UK banks to be working with local companies to ensure a continuing pipeline of employment opportunities and the financing of this property portfolio demonstrates our commitment to the North East market."
Andy Mallin, Regional Director for Real Estate at Santander Corporate & Commercial, said: “We are delighted to have supported UK Land Estates with this acquisition. The portfolio houses hundreds of businesses from across the region, providing thousands of jobs and supporting our local economy. We know that with UK Land Estates strong management experience they will continue to ensure the assets remain a vital resource for the local community and economy.”
Muckle LLP acted for UK Land Estates on the deal. Adrian Hill and Nicola Loose, partners who led the Muckle team said "We are delighted to have been instructed by UK Land to help deliver this strategic project which sees some of the most significant and successful business parks in the UK remain in the ownership of one of the pre-eminent north east based property companies".
In 2011 UK Lland Estates bought out its joint venture partner, Bank of Scotland, and Highcross took its place, strengthening UK Land Estates balance sheet and enabling it to further invest in its portfolio.
Source: UK Land Estates