28 Apr 2021
A new lease of life for iconic Newcastle tower as Cale Cross is sold for residential conversion
M7 Real Estate (“M7”) the pan-European investor and asset manager announces that, on behalf of M7 Real Estate Investment Partners V (“M7 REIP V” or the “Fund”), it has completed the sale of Cale Cross in Newcastle-upon-Tyne, an office building which has been proactively repositioned for residential use, for in excess of £5 million to Beech Holdings.
M7 acquired Cale Cross, a 76,000 sq ft, 18 storey office building as part of a wider portfolio in 2016. It is one of Newcastle’s 10 tallest buildings and occupies a strategic position overlooking the River Tyne and Tyne Bridge. Given the continued demand for well-located, high end, residential accommodation in Newcastle and the prominence of the building, M7 identified a potential opportunity for a change of use and successfully achieved approval for 130 private residential dwellings through Permitted Development.
Having achieved the change of use in April 2019, M7 implemented a proactive asset management programme to obtain vacant possession of the building, which was completed in July 2020. Following a marketing campaign a sale was agreed with Beech Holdings, one of Manchester’s leading residential developers, and, despite ongoing Covid restrictions, the sale was completed in March 2021.
Martin Betts, Asset Manager at M7 commented: “The sale of Cale Cross demonstrates that there is continued investor appetite for well-located residential opportunities in central Newcastle.
“This sale follows the execution of our business plan which was to identify an alternative use and then dispose of the asset at an enhanced value. The proceeds will be re-invested into our acquisition pipeline and asset management initiatives as we continue to drive attractive sustainable income returns for the Fund.”