Plans for a massive expansion of the Metrocentre in Gateshead to create a new town centre in the North East are being drawn up and reviewed.
Metrocentre chairman Martin Healy has been talking about the initial proposals for "Metrowood" at the Mipim conference in Cannes, alongside senior councillors from the North East including Gateshead council.
Metrocentre is one of the UK's largest and most successful "super regional malls", comprising 2 million square feet of development.
The initial plans, which would require public sector financial backing, are for 5,000 homes with 2,000 homes built on Metrocentre land and a further 3,000 homes on surrounding land, owned partly by Gateshead council. The proposals are also for extra offices, leisure and retail development. The land at Metrocentre is ultimately owned by The Church Commissioners.
Healy said the plans were important to ensure the asset remained relevant for the next 30 years and would create a complementary town centre to Gateshead and Newcastle. They also focus on making the asset more sustainable and on protecting it from-the long term rising water levels on the River Tyne.
Along with the Trafford Centre in Manchester, the Metrocentre is the biggest regional shopping centre in the UK, and it has 2 million square feet of lettable space.
Sovereign Centros took over the running of the Metrocentre in October 2020 after owner Intu collapsed into administration in June that year because it failed to reach an agreement with its creditors.
The Metrocentre sat in the Intu Metrocentre Finance securitisation of a £485 million interest-only fixed-rate commercial mortgage loan. The CMBS comprised a single fixed-rate note with expected maturity in 2023. GIC Real Estate bought a 36% share of the freehold interest in the shopping centre for £1.2 billion in 2007, sitting alongside the company that became Intu.
The Metrocentre was the brainchild of John Hall, a miner’s son who bought the site for £100,000. When it first opened its doors to the public on 14 October 1986, it became the largest shopping centre in the UK.
With funding from the Church Commissioners, the early phases of Sir John Hall's shopping centre included a Carrefour supermarket, which subsequently became Asda and then Gateway. It was also home to the country’s first out-of-town Marks and Spencer.
In December the asset manager of Metrocentre said an ongoing £70 million investment programme has driven strong leasing and footfall and, in turn, robust dividend payouts to the bondholders that own it.
In an update on the 12 months ended 31 December 2023, Sovereign Centros said the period had built on the momentum seen in recent years. The asset manager itself was recently bought by CBRE.
Proforma net operating income increased to £35.2 million at the end of the third quarter, up from £24.6 million in December 2020. For the period ended on 31 December 2023 net rental income rose to £31.6 million from £23.2 million in the third quarter of 2022.
Footfall grew 2.4% year-on-year versus 2022 to 14.4 million visitors.