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Quay West Development
When Adderstone Group decided to tackle the regeneration of one of Sunderland's most famous ship building yards, Auston Pickersgill, the world was a very different place: Good trading businesses could obtain 100% funding to acquire their own premises, property funds were snapping up entire developments and every self respecting investor wanted a commercial property in their Self Invested Pension Plan (SIPP).
5 years on, Adderstone achieved practical completion of Phase I and immediately found that purchasers under contract on 16 of the completed office buildings were unable to raise finance and were technically insolvent. We talked to Adderstone's MD, Ian Baggett, about how his company came to regenerate a contaminated old ship yard into Quay West Riverside Business Village, when most sensible developers had 'downed tools':
"We knew this was an ambitious project from the outset but circumstances seemed to conspire against us further. What was never intended to be a speculative development has become entirely speculative. A City based investment fund had purchased most of the offices 'off plan' before we had even laid a brick. Mid way through the credit crunch this fund was put into administration but, by this stage, we were too far down the line to put work on hold."
The scheme comprises 48 separate office buildings with more than 30 being built in Phase I. The theme is very much based around the 'own front door concept' with all offices designed to give occupants their own self contained building. Although there is space on the site for a number of larger buildings, most of the space is aimed at accommodating smaller businesses. Ian goes on to explain,
"We were confident from the outset that there was considerable demand for 'move on' offices in between the A19 and Sunderland City Centre. Business owners often want to own and control their own premises and avoid the often hefty service charges that can apply in incubator type set ups and suites in larger offices. Most significantly, many business owners want the opportunity to buy their own premises as opposed to pay rent indefinitely."
The 400 tonne crane that had stood on the site since 1955 was dismantled late in 2007, on the eve of the credit crunch. Although the circumstances in the wider economy have changed drastically since then, Ian has remained confident throughout in both the demand for their product and the likely impact of the regeneration planned around their site. Long term plans for the riverside around the Queen Alexandra Bridge include a massive road revamp, a riverside village of about 1,000 homes on the former Groves site and a new iconic Wear bridge.
Since completion of Phase I, Adderstone and their agents have been overwhelmed with enquiries. As Neil Osborne from Storeys SSP explains, "by offering imaginative deals we seem to have struck a chord with business owners. We are offering up to 12 months rent free and an option to buy at a fixed price when the credit markets normalise once again. For example, on the back of retained deposits from aborted deals, our client can offer an office from as little as £7,000 pa with a 12 month rent free and grant an option to buy for as long as 3 years at a fixed price of £110,000. Also, Sunderland City Council is able to offer further generous incentives to qualifying businesses".
Adderstone have now secured a dozen occupiers and Ian remains confident that one day soon more than a thousand people will be working on this historic site once again.
To find out more about this regeneration story visit www.quaywestsunderland.co.uk or contact Lauren Young at Storeys SSP on 07595 595 548.
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