Investors helping to develop Tyneside science and business park Newcastle Helix are poised to pump a further £60m into the site.
L&G first pledged £65m investment into the science park in 2016. The 24-acre hub is a partnership between Newcastle City Council, Legal & General and Newcastle University, with the partners hoping it will help create thousands of jobs, prime office and research space, and hundreds of new homes.
Six years after bankrolling the building of office blocks The Lumen and Spark – at the time, the largest property deal in the city for decades – the institutional investor is keen to support further developments at the site, starting with £60m on a build-to-rent housing scheme comprised of two towers. There is also the potential to support further buildings at Helix, including potential office space and research space, depending on what is needed to help bring the council and university’s vision to life.
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Andrew Kail, CEO of Legal & General Retirement Institutional (LGRI), announced the planned additional investment during a visit to the city with Newcastle-born Aysha Patel, origination director at LGRI and Ben Rodgers, head of regeneration, to meet members of Newcastle City Council and department heads at the University of Newcastle, to see first hand the impacts of the group’s investment so far.
Mr Rodgers said the build-to rent scheme, estimated to cost £60m, is a conditional proposal subject to planning, and that it is an ambition of the partnership to make it work.
Mr Kail said: “The great thing about this site is that it feels like much more than a collection of buildings. It’s been really good to see the buildings and how they’ve got more connectivity to the west end of the city. Seeing it come alive as a community and a place has been great - and there’s lots more to do. The site’s got some way to go but being on that journey and viewing is really what today has been about.
“Our principle role is as a developer of the key properties, the ones you see and the build-to-rent one as well. One of the great things about Legal & General is we have a vast range of investing and interests that we do for ourselves and our clients.
“If you think about what’s happening at the Biosphere, that’s very much the type of invest we like doing. There’s companies there investing in sectors like health tech that are incredibly interesting to us. It’s one of the advantages of the partnership. We’re on site, we’re not just third party capital that’s come in with funding and then disappeared.
“By being on site and being part of the partnership with the university and council we’re more likely to get access to and see some of the great businesses in the Biosphere and original building that are innovating and developing and may want partnerships in capitals. We have a phrase at Legal & General - we are start-ups, scale ups and grown ups - we invest in businesses at each stage to help them if we can if it’s aligned to our purpose and strategy.”
The plans for the two towers, which form part of the original masterplan, have yet to be finalised and submitted for planning permission, but have the potential to create 300 homes.
Mr Kail said: “There are lots of hurdles yet to be jumped through but it would be great to see the residential site that is ours and planned, constructed. It will be great for the site and great for Legal & General.
“The build to rent scheme would work really well for us. A perfect asset to us is fixed income sums over many, many years and that’s what build to rent is - we look for assets like that all the time and that’s why the potential for the site here is so attractive.”
On the Levelling Up agenda, Mr Kail says Legal & General was aiding countrywide urban regeneration long before the phrase was coined, as evidenced in its investments in Newcastle, £100m pledged to Riverside Sunderland, and similar projects in the likes of Leeds, Manchester and Cardiff.
£30bn has been invested into projects which would today be classed as Levelling up, he said, and much more will be needed if the Government’s plan is to succeed.
He added: “If you take some of the estimates just for infrastructure alone, in the UK we’re going to need to be spending £1trn over the next 10 years. Our estimates are that the insurance industry, through the pension transfer work that we do, can fill 20% of that gap. So if you’re the Government wondering how we’re going to get this Levelling Up agenda implemented, Legal & General and companies like us are incredibly important part because we have the capital to enable it, so long as the planning and ideas and schemes are viable.”
