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The owners and lenders of the Metrocentre in Gateshead in the north east are planning a huge new development on land around the shopping centre amid ongoing efforts to claw back value on the scheme.
In a business plan unveiled yesterday, Metrocentre asset manager Sovereign Centros said it would be seeking £2M from the centre’s backers to develop a masterplan for defunct land around the 2.1M SF mall.
The plan is being called MetroCity, and Sovereign Centros said it chimes with the Labour government’s plan to build more homes more quickly through large-scale regeneration and infrastructure projects.
Initial plans for the project call for 4,500 new homes to house 11,000 new residents, more than 100K SF of new leisure space and 25 acres of green space.
The business plan said planning approval could be gained as soon as 2027 and work could commence in 2028. The project could be delivered in stages through 2045, contingent on funding and local planning policy.
The Metrocentre’s ownership structure is complex. The centre was owned by a joint venture between Intu and Singaporean sovereign wealth fund GIC. But Intu went into administration in June 2020, and its ownership holdings are still being managed by administrators.
In addition, land around the Metrocentre is owned by The Church Commissioners, the body that invests on behalf of the Church of England.
When GIC bought its stake in the centre in 2007, it valued the mall at £1.1B. Since then, the value has shrunk massively and now stands at £439M.
There is currently £693M of debt outstanding against the centre, putting it underwater. Of that, £70M is in the process of being refinanced by a UK bank, the business plan said.
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