The firm that brought Hitachi Rail to Newton Aycliffe has revealed its latest multi-million pound scheme which is hoped to bring more than 1,000 jobs to Aycliffe Business Park.
Merchant Park Developments have announced plans to invest up to £9m in the first phase of a new commercial development located at Merchant Park, close to Hitachi on Aycliffe Business Park.
Phase one will bring 198 jobs to the area, with plans to create a total of 1,014 jobs when all three phases of the site are completed.
Merchant Park is a 65-acre development, home to the 30-acre Hitachi Rail Europe train manufacturing facility and one of the largest inward investment manufacturing developments in recent years.
This latest addition to the site on Millennium Way, is a 17-acre (6.88ha) development adjacent to the Hitachi site.
It will include three warehouse units with construction now commenced on phase one of the development, occupying 52,500 sq ft, with planning consent for the remainder of the scheme for 89,000 sq ft and 126,000 sq ft premises.
Funding to support the development has been provided using a seven-figure senior debt package provided by FW Capital under the North East Commercial Property Investment Fund, which is managed by FW Capital and backed by the North East Combined Authority (NECA).
An incentive has also been provided by NECA to support the immediate financial viability gap for the first phase which includes infrastructure costs for the following two phases.
Construction has started with local firm Hall Construction Services and the development is being marketed by letting agents Jonathan Simpson at Connect Property and Dave Cato at CBRE. Chris Dixon and Lesley Telford represented FW Capital.
North East mayor Kim McGuinness said: “I’m delighted to see Merchant Park Developments’ ambitious £9m investment come to life.
“This project, which will create over 1,000 jobs across its three phases, is a clear demonstration of how targeted financial support can unlock opportunity and drive economic growth.
“We have used our Commercial Property Investment Fund to make a difference and make sure game-changing projects like this get off the ground.
“This partnership between the public and private sectors creates jobs and makes communities stronger.”
Geoff Hunton, a director of Merchant Park Developments, said: “We are delighted with the support we have received from all parties in moving this phase of our development of Merchant Park forward.
“As well as driving growth in the local economy through the creation of new jobs, we are meeting our aspirations for the Park following the completion of the Hitachi Project in 2015.”
Merchant’s Adrian Goodall added: “Following the successful completion of the starter unit scheme Station Place, we’re pleased to now launch the first phase at Millennium Way.
“The initial funding from FW Capital and the North East Combined Authority is supporting the building and infrastructure requirements.
“It’s given us the confidence to kick start the development and regenerate a previously barren site.
“We’re also meeting the demands for quality commercial warehouse and office space, something that is in short supply in the area.”
The North East Commercial Property Investment Fund is a £35m fund which provides loans of up to £7m to support both non speculative and speculative developments for new build or refurbished commercial projects.
This includes industrial units, distribution facilities or office schemes located in the seven authority areas: Northumberland, County Durham, Gateshead, Newcastle upon Tyne, North Tyneside, South Tyneside and Sunderland.
Repayments will be reinvested in new schemes, creating a total investment of £119m into commercial property in 15 years.
It aims to create 5,600 jobs and develop 140,000 sq m of commercial space.
