Cardiff bank Hodge has completed its first deal in Gosforth, Newcastle, funding the initial-phase conversion from office space to 73 apartments at the Regent Centre business park.
It is the private bank’s second deal with the Midos Group, the first being a £10m loan to enable the company to convert offices in Birmingham into 160 apartments.
Built in the 1970s, the Regent Centre was part of then Europe’s largest office complex. In 2014 the property was purchased, as part of a wider portfolio, by Kennedy Wilson Real Estate for £296m.
Following a brief period of ownership, the Regent Centre was subsequently carved out of the portfolio and sold to the current freeholder in 2015.
Once home to many public and private sector businesses, the present owners have worked hard to address occupancy shortfalls and have now also secured permitted development rights to convert vacant office buildings into a further 400 apartments.
Hodge Bank is lending the Midos Group £6m to convert Northumbria House into 73 one and two-bedroom apartments, with construction of the two-year project already underway. Gareth Davies, pictured, who negotiated the deal for the bank, says there is a shortage of apartments to rent.
“We are seeing demand increase for rental accommodation across the UK, including the North East, where we expect Northumbria House in Gosforth to be the first of three or four properties on the business park converted from office to residential use.
“Assuming demand continues, we hope to fund further properties that are currently being considered for conversion to residential use. This could potentially see 400 apartments being brought to the rental market over the next four years,” said Davies.
The deal between Midos and Hodge Bank was arranged by Manchester-based commercial property broker Seaford Finance.