Thousands of Government workers with the HMRC are set to move into the heart of Newcastle in the city's biggest ever office letting.
Around 9,000 workers will set up a new base in Pilgrim’s Quarter - the revised plans for the former Odeon Cinema site which propose a huge nine-storey office, creating a new 463,000 sqft regional centre for HMRC.
HMRC will occupy the whole of the development, which is expected to open in 2027, having confirmed plans to quit its Benton Park View site earlier this year, triggering the search for a site large enough for its 6,500 employees.
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Longbenton has been the base for the ‘Ministry’ since the late 1940s and thousands of people in the region have worked at its agencies over the last nine decades.
The base - where the lease is expected to expire from 2024 – currently houses a number of agencies including The Pension, Disability and Carers’ Service, Jobcentre Plus and The Health and Safety Executive.
HMRC had been looking for a Newcastle city centre office and two sites were being considered which it said would “support the Government’s green agenda” through sustainable office space and improved public transport links.
Jim Harra, HMRC’s chief executive and first permanent secretary, said: “HMRC has had a longstanding presence in Newcastle and the wider North East. Signing the lease for the new regional centre is a clear demonstration of our commitment to the area, its economy and our employees based in the North East.
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“Pilgrim’s Quarter will deliver the inclusive, flexible and collaborative working environment that meets the current and future needs of our colleagues while improving career development opportunities.”
The Ryder Architecture designed scheme will include the retention and refurbishment of the elevations to Carliol House fronting onto Pilgrim Street and Market Street, including the prominent cupola on the junction of those streets. The scheme will also incorporate public realm improvements.
Newcastle City Council leader Nick Forbes said: “This is fantastic news for Newcastle and anyone who has a stake in the success of the city centre.
“Having a new development for 9,000 workers in the heart of the city will be great for transport operators, retailers and the hospitality trade. It will not only boost our economy but bring huge social value to the city as it continues to be transformed after the pandemic.
“It shows confidence in our vision and the £50m city centre transformation plan we launched earlier this year and comes on the back of organisations like the Home Group, Homes England, Monstarlab and others, choosing the city as their first choice for attracting and retaining great people.
“All these developments will bring a huge economic stimulus which is just what we need, and I wholeheartedly welcome it. “All planning applications are of course subject to the scrutiny of the independent planning process.”
Avison Young acted for Reuben Brothers (Newcastle) Ltd and Cushman Wakefield acted for HMRC in respect of Pilgrim’s Quarter, and said the arrival of 9,000 staff into the new regional centre will increase footfall and enhance the vitality and viability of the nearby city centre retail core.
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Taras Properties - a development vehicle acting on behalf of real estate entrepreneurs Reuben Brothers - has been driving forward plans for the East Pilgrim Street regeneration which will include a number of offices, including Bank House on the site of the old Bank of England, and the massive Pilgrim’s Quarter, which takes up the site of the current Stack Newcastle.
The land was originally planned to become a £200m luxury leisure, shopping and living scheme.
The pandemic and general changes in retail and leisure markets prompted the developers to revise those plans, however, instead coming up with the new plan for the city’s biggest ever office block.
The Pilgrim Street regeneration was kickstarted by the decision to proceed with the speculative development of Bank House around five years ago and work is now well advanced with the construction of the 14 storey, 120,000 sqft Bank House.
Planning approval has been secured to convert the former fire station into a boutique hotel, with works scheduled to commence early in 2022, and planning consent has been granted to refurbish the listed Worswick Chambers, for leisure uses. Planning has also been secured for a further 450,000sqft of offices at the adjoining Pilgrim Place.
Tony Wordsworth, director, Avison Young, said: “This letting represents arguably the largest Newcastle city centre letting ever and shows the confidence and strength in the North East office market. This will hopefully be the catalyst to accelerate other phases of the Pilgrim Street regeneration. This is already under way with the construction of Bank House, due for completion Q1 2023, and which will bring forward 120,000sqft of the highest quality Grade A office accommodation.”
Greg Davison, Partner, Cushman & Wakefield said. “This is a significant endorsement of Newcastle as a major part of HMRC’s operations platform and will be integral to its strategy for the future in so far as it will support a modern flexible ways of working and provide its staff with the highest standard of workspace once it moves into the new site.”
He added: “For Newcastle, it will be a major boost in terms of city centre footfall as it repositions its prime retail core and adapts to the challenges we face across all major city centres, creating a real critical mass to the benefit of all its city centre office occupiers.”
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