Newcastle city centre drinking, dining and entertainment destination The Gate has been put up for sale by its owners, at almost a quarter of the price they paid for it. The Crown Estate has enlisted London property agents to find new owners for the Newgate Street site – spread across two huge buildings.
And they are marketing it at £15.65m, a fraction of what was paid for the site more than 10 years ago. Back in 2012, the property company, which was owned by HRH Queen Elizabeth and is now owned by King Charles, snapped up the huge site with its cinema, bars and restaurants in a £60m deal from London property company Delancey.
The Gate – which takes its name from its address on Newgate Street – originally opened to great fanfare in 2002 but its construction caused some controversy. It required the demolition of much-loved music venue The Mayfair amongst other buildings.
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At the time, The Gate was the only covered leisure scheme in Newcastle city centre with its cinema - then operated by Empire – and bars and restaurants including Nando’s and Pizza Hut. Since then, neighbouring complex Eldon Square has boosted its leisure offering with the opening of its Grey’s Quarter bars and restaurants, including new venues set to open soon including Flight Club and Chit ‘n’ Chaat.
Spread across three floors, it was built by Land Securities at a cost of £80m and is now home to around 19 venues including newly-opened Fayre Play and Lane 7 which took over The Lofts and Hustle, as well as Cineworld, a Wetherspoons pub and a host of other bars and restaurants.
Four years after acquiring it, the Crown Estate invested more than £3.5m into giving it a fresh new look, adding a new LED lighting system to light up the front of The Gate, alongside a new lobby area and extra space for anew cocktail bar and cafe. The investment came as it moved to raise the visibility of the centre at all times of day, taking into account trends at the time which saw more people eating out.
Now up for sale, the property firm announced the investment opportunity on social media, saying: “Park Place Retail are marketing this landmark city centre leisure investment opportunity, a purpose-built leisure destination anchored by a 12 screen Cineworld cinema and Bally’s casino. Further restaurant/bar/ leisure occupiers include Wetherspoons, Nando’s, Cosmo, Escape, Pizza Hut, Lane 7, YuMe World, Kiss, The WonderBar, Mojo, and Game of Throwing.
“We are instructed to seek offers in excess of £15,650,000, subject to contract and exclusive of VAT. "
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North East retail analyst and consultant Graham Soult, of Canny Insights, said: “In commercial property, it’s not unusual for companies to sell assets that no longer fit their areas of focus, and indeed we have seen that in how The Gate has been bought and sold before.
“That said, the decline in asking price from £60m in 2012 to £15.65m is notable, though it really mirrors the current national trend of falling retail and leisure scheme valuations, driven by the lower rents that many such assets are now capable of delivering.
“It’s worth remembering though that The Gate is getting on for being a quarter of a century old, and the leisure landscape in Newcastle city centre has completely transformed since then, with a much more extensive offer in locations such as Eldon Square and Grey Street. In turn, we have seen The Gate become less focused on food and drink, and rather more driven by gaming and entertainment.
“So, amid all this change, I would say that The Gate is doing pretty well to still be largely occupied, and still drawing decent footfall and lettings, some 23 years after it opened.”
The Crown Estate has been contacted for comment.