Crawhall Road

Newcastle NE1

Overview

  • Opportunity to forward fund a 134 unit new Build to Rent development
  • Thriving city economy with excellent rental market dynamics
  • Prominently located ½ mile from the city core in the city's vibrant Ouseburn area
  • High level of specification
  • Sector leading levels of amenity space, including communal lounge, gym, sauna, cinema room, sky lounge, roof terrace and private kitchen dining room
  • High quality development team with considerable experience
  • Price and programme agreed with contractor, with construction ready to start by the end of the year and PC scheduled for Q3 2020
  • Experienced manager Collegiate AC has provided advice and in place to operate if desired by the investor
  • Rental underwrite at modest levels, with studios priced at well below inferior student product
  • Capital commitment of £18.5m (Eighteen Million, Five Hundred Thousand Pounds) reflecting a net yield of 5.00% after operating costs, void and purchaser's costs

Location

Newcastle is the regional capital of the North East with a diverse, service led economy. The city has a population of 293,000 and forms an integral part of the Tyneside conurbation. This is the seventh largest in the country, with a population of 775,000 people.

Newcastle has seen extensive commercial and culture led regeneration over the last 20 years, which has changed the structural dynamics of a local economy that once relied on heavy industry and manufacturing to one based around professional, scientific and business services. Data from the Centre for Cities shows that Newcastle boasts one of the best records for creating private sector jobs over the last five years of any UK city.

The Newcastle economy is performing strongly with the highest wage growth of any UK city in 2016/17 at 6.3%, supported by GDP per capita growth of 4.4%. Tourism growth at 7% per annum is well ahead of the 4% national average, whilst the city's next generation of talent comes from the two highly regarded universities, with a student population of over 50,000. With a 55% graduate retention rate, the future of the city appears to be in good hands.

The development is prominently located in a vibrant residential area, half a mile to the east of the city core and a short walk from Newcastles busy Quayside. Public transport is excellent with a major bus route and Manors Metro station both close by. The recent development of student residential schemes close by has created a willing audience to underpin the ongoing regeneration of the Ouseburn Valley, and its diverse range of venues, bars and incubator commercial space.

Ouseburn

The development is situated at the top of the Ouseburn Valley, once the cradle of the industrial revolution and now a thriving urban village and creative quarter.

The area has a unique physical character where piecemeal development since the Industrial Revolution has created a quirky townscape, with a mix of listed industrial buildings alongside modern developments and green space, all of which promote an eclectic range of occupation and use. As the older industrial uses move out, a vibrant arts, creative and media led sector is expanding with incubator focused schemes such as Hoults Yard, the Biscuit Factory, Media Exchange and the Toffee Factory all enjoying near full occupancy.

The diverse leisure offering is well established with the Seven Stories centre for children's books adding to an urban farm and stables, together with a vibrant mix of great pubs and live music venues, alongside more upscale offers such as the Hotel Du Vin.

The Ouseburn scored highly in the 2017 Hip Hang Out Guide with a hip culture outpost score of 9 out of 10 and creative capital score of 10 out of 10 putting it amongst Ancoats, Leith, Dalston and Glasgow's West End as the UK's hippest locations.

The Council and HCA have appointed Carillion-Igloo as regeneration partner on a number of residential sites in the area, with the first phase, the 76 unit The Malings, selling out off-plan. The development of a further 34 townhouses, apartments and leisure/workspace will commence on the Lower Steenberg site in January 2018.

Situation

The development is prominently located in a vibrant residential area, half a mile to the east of the city core and a short walk from Newcastle's busy Quayside. Public transport is excellent with a major bus route and Manors Metro station both close by. The recent development of student residential schemes close by has created a willing audience to underpin the ongoing regeneration of the Ouseburn Valley, and its diverse range of venues, bars and incubator commercial space.

Description

The design uses red brick, exposed steel, metal cladding and extensive glazing, reflecting and respecting the urban surroundings, whilst creating a prominent landmark structure. The scheme will include sector leading levels of amenity space comprising:

  • Generous double height reception area
  • Landscaped courtyard
  • Secure storage room for 134 bicycles
  • Gym & Sauna
  • Ground floor communal lounge
  • Fifth floor sky lounge & terrace with panoramic views over the Tyne Gorge
  • Cinema room and dinner party dining area
Internally the units are tailored to meet the highest PRS standard:
  • Fully furnished
  • High quality fitted kitchens with Corian worktops
  • Bosch appliances including washer/driers and dishwasher
  • Built in wardrobes
  • Smart TV
  • Broadband and Wi-Fi
  • Balconies and/or winter gardens to some two bed units
  • 5 metre high double height windows to duplex units
  • LED Lighting throughout
  • Secure car parking spaces to rent


Tenure

Freehold.

Proposal

We are instructed to seek a full funding package including interim finance for the development at a purchase price of £18,500,000 (Eighteen Million, Five Hundred Thousand Pounds).

Based on a site purchase price of £1,285,000 and a net yield of 5.00% allowing for:

  • Operating costs of 27.5% of gross rent
  • A 3% void allowance
  • Purchaser's costs of 1.25%

Additional Information

A comprehensive data room is available to interested parties, which includes:
  • Title;
  • Environmental and site investigations;
  • Floor plans and elevations;
  • Acoustic asbestos, archaeology and ecology reports;
  • Floor plans and elevations;
  • CGIs;
  • Accommodation schedule;
  • ERV schedule;
  • Operational financial model;
  • Development appraisal;
  • Planning consent.

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NET INITIAL YIELD:
5%
PRICE:
£18,500,000
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