By Martin Walker
A real estate joint venture has purchased about a quarter of Aycliffe Business Park premises in a £11m deal – we can exclusively reveal.
In the May-June issue of our B2B magazine, Aycliffe Today Business, due out tomorrow (Friday), property boss Matthew Cheyne (pictured) from London-based M7 talks about exciting new plans for the land they have acquired in Aycliffe.
The first copies of Aycliffe Today Business will be available at the ABP steering group’s next scheduled event at SWD Training from 8.30am tomorrow morning – click here to register.
The land and properties incorporates 700,000 square feet of land and 47 tenants, including some high-profile firms such as Palram, Stiller and Tyne Tees Packaging.
It is now owned by Empire 1 Sarl, a joint venture (JV) between M7 and real estate fund managers Europa Capital Partners, based in London.
The JV has forked out an initial £11m, but has also ring-fenced £1m of cash to regenerate some of the run-down areas on the Park.
In our exclusive interview, Mr Cheyne said: “There are parts of the estate, most notably Northfield Way, which we intend to invest quite heavily in regenerating it.
“We’ve actually ear-marked between £700,000 and £1m for further investment and invest in the stock we’ve already bought, to refurbish it.
“Most industrial stock over the last five years or so has been starved of regeneration purely because of the economic situation.
“We want to invest in our stock and improve it, to give local occupiers more choice, and from our point of view we’ll reap the rewards of having improved stock.”
Mr Cheyne is promising to make improvements without increasing rates for current tenants.
He added: “There are options for us to change tenancy agreements and pass on the cost of improvements to them, but in most cases we don’t do that, we see at as part of the purchase price.
“We want to show companies and the local community in Newton Aycliffe that we want to improve the Business Park.
“Our pay-back will be increased occupancy levels, a rental growth and, when it comes to the point of job done in five or 10 years time, selling on much-improved stock for a return.
“We don’t see this as a gamble. We see it as a very calculated, sound investment.”
M7 is one of the UK’s leading industrial real estate asset managers, with a portfolio consisting of £400m-worth of industrial properties from Penzance in the South to Dundee in the North.
M7’s joint venture with Europa Capital is one of 18 multi-let deals it has done across the country, acquiring estates in Hull, Telford, Cannock and East Kilbride as well as Aycliffe.
The portfolio, totalling £37m, consists of 258 units across the 18 estates and provides over 1,640,000 sq. feet of predominantly industrial accommodation.
• The May-June issue of Aycliffe Today Business will be available at the ABP news and networking event on Friday. Other copies will also be distributed across the park from tomorrow and every firm on the park will receive their mailed copy early next week.