Construction projects in the North East hit new highs

Construction projects in the North East are on the rise, positioning the region as one of England’s best-performing for new development.

The October edition of the Glenigan Construction Review highlights that office (especially data centre), industrial, and housing projects starting on site in the three months to September were all well ahead of last year’s levels.

Prospects for work in the region’s office sector received a major boost recently with the signing of the government’s UK-US Tech Prosperity Deal, declaring an AI “growth zone” in the North East.

The deal is potentially set to attract up to £30 billion in investment in the region, creating one of the largest data centre hubs in Europe, along with more than 5,000 new jobs.

One major project in the region at the pre-tender stage is the £240 million Cambois Data Centre Campus – Phase 1 (pictured), which involves two three-storey data centres on the site of a former power station at Blyth in Northumberland. An application for reserved matters has been made on the 90,000 sq m scheme, which is being backed by the US group Blackstone and which is set to get underway in 2027 (Project ID: 25414042).

Meanwhile, enabling works are now underway on the wider Cambois Data Centre scheme, which will eventually involve 10 data centres with an overall value of some £10 billion (Master – Project ID 24110643).

Further expansion is also planned at the Stellium Data Centre Campus at Cobalt Business Park in Newcastle. One small project at the Stellium site, where detailed plans have been granted and a main contractor appointed, is a data centre plant refurbishment where work is set to get underway later this year (Project ID: 20333236).

The new data centres will also involve major work to expand the energy infrastructure to support the sector in the region. Energy capacity at the Blyth site is to be increased to 1.1 GW over the next six years.

Office projects going ahead

Conventional office construction projects are also going ahead in the North East. Detailed plans have recently been approved for a scheme of 37 office/warehouse units at Gosforth Business Park in Newcastle. Work on the £17.6 million scheme is due to start in the spring and run for 14 months (Project ID: 24201878).

Industrial building activity has also been particularly strong in the region. The value of underlying projects starting on site in the North East shot up to £215 million in the three months to September, more than six times the level of a year earlier.

One major industrial project got underway in the region over the late summer at Stockton-on-Tees in Cleveland when Amazon started construction on a £38.8 million storage & distribution warehouse at Queen Elizabeth Way. Work on the project is set to run until autumn next year (Project ID: 20448036).

Other industrial schemes are in the near-term pipeline in the region. At Wallsend in Tyne & Wear, work on the Oceana Business Park Redevelopment, a £9.9 million scheme of industrial units involving over 11,300 sq m of space, is set to get underway next spring (Project ID: 25164644).

Housebuilding on the rise

New housebuilding activity has also been on the rise in the North East. The region saw strong growth in both project housing starts and approvals in the three months to September, according to the October issue of the Glenigan Construction Review.

One large private housing scheme got underway last month when Persimmon Homes (North East) broke ground on a £22 million scheme of 166 houses at Hauxley View at Morpeth in Northumberland. Work on the scheme is set to run for 18 months (Project ID: 17189386).

Some major housing schemes in the pipeline should maintain momentum in the sector in the region.

For example, outline plans have been granted on Newcastle City Council’s major £330 million Quay West development, where the government has agreed to provide £122 million of funding. The scheme involves a series of multi-storey blocks creating 1500 homes along with commercial and leisure space (Project ID: 18228602).