Supporting Development: Newcastle Science Central
Science Central is a 24 acre mixed use development site situated on the former home of Scottish & Newcastle Breweries and located in the heart of Newcastle City Centre.
Owned in partnership between Newcastle City Council and Newcastle University, the 2008 financial crises had presented a barrier to further commercial development with ongoing economic uncertainty, stagnant rents and developers unwilling to take the risks of speculative development. The client therefore needed a more proactive and innovative means by which to stimulate the project.
Cushman & Wakefield provided the client with a review of alternative delivery strategies assessing how the public sector and private sector could work in partnership to bring forward development. This work has helped underpin the next two exciting phases of the project:
Firstly the Council, supported by Cushman & Wakefield, has reached agreement with Legal & General Capital for an initial £65million investment that will help deliver two Grade A office buildings – one of up to 120,000 sq ft and a second of up to 100,000 sq ft. The Council will take a headlease on the first of these buildings and retain any profit rent over the term of the lease. They will then have the option to acquire the building at expiry of the lease. Legal & General Capital will then be obliged to speculatively develop the second building.
Secondly, Cushman & Wakefield has advised on the direct development of a new 70,000 sq ft £20m life science focussed laboratory facility which will be funded through a combination of prudential borrowing and Local Growth Funding from the North East LEP.
These next phases of development represent an important part of Newcastle’s drive to be a hub for innovation combining business space, teaching facilities and life science related research facilities in a single community. Such development would not be possible without a proactive approach from all partners.
The agreement with Legal & General Capital to invest is partly secured by the Council meeting the initial rental liability on the first office. Despite the initial rental outlay the economic case for the Council was compelling with benefits derived from rental growth, rates retention (the site is within a designated ADZ) and the wider social and economic benefits of a major city centre scheme.