An iconic 1930s Co-operative department store in the heart of Newcastle is to get a new lease of life after seven years of neglect. A previous plan to turn the Grade II listed building into a hotel collapsed during the recession.
In the latest scheme DTZ Investment Management and construction group Interserve have joined forces to undertake a multi-million pound regeneration of the Newgate Street property. The first phase will involve £17m worth of building work and could start within weeks. Another £13m will then be spent converting the interior into a 184-bedroom Premier Inn hotel and leisure complex. The ground floor shops will also be revamped and enlarged.
The Art Deco Co-op building extends to nearly 170,000sq ft over six floors and, with its twin towers and large sweeping windows, has been a feature of the city’s landscape since it opened in 1932. Its third floor is mainly taken up by the Rainbow Room, a suite once used for hosting wedding receptions and international ballroom dancing competitions. The recent sale between the Co-Operative Group and DTZIM also includes an adjoining NCP car park and a Chinese restaurant in Stowell Street at the rear.
“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,” said Bob Fletcher, a director at chartered surveyors Sanderson Weatherall which acted for Co-operative Group. “It has been a privilege and a challenge to have worked on such an iconic building with so many complex intricate issues.”
Management of the project, which is expected to be complete by late 2015, is being undertaken by Interserve. “This project demonstrates our ability to deliver innovative solutions in property development and the collaborative approach between Interserve, Premier Inn and DTZIM has ensured that this complex scheme is now viable and ready to move forward,” explained Interserve managing director Dougie Sutherland. He added that his company intends to work closely with local supply chain partners on the development to provide significant local employment opportunities.
Kevin Murray is Whitbread Hotels and Restaurants senior acquisitions manager. “We are delighted to be a part of this innovative project and we hope the new Premier Inn will be a positive and valued addition to the local area,” he said. “We will shortly commence working with Newcastle City Council and other local employment agencies to create more than 50 jobs for the local area.”
In 2011 it was reported that two rival development groups — one a consortium of Tyneside tax exiles — were engaged in a bidding war to turn the former store into a 230-bed hotel, a luxury restaurant and gymnasium. Both schemes ultimately collapsed because of the financial climate and the Co-op’s refusal to accept offers as low as £12m. The group had asked for £20m when the premises first went on the market in 2006.
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