The rapid rescue of the bygone offices racking up exorbitant costs: Read the back story behind Newcastle’s newest luxury hotel

The wait for Newcastle’s luxurious, multiple-award-winning, boutique hotel from Dakota Hotels is almost over - thanks to a multifaceted team effort from Knight Frank, which saw an intelligent strategy quickly turn an ailing asset into an incredible deal for its landlord - and the city at large.

The UK hotel chain, which has five hotels located in Edinburgh, Glasgow, Motherwell, Leeds and Manchester, is planning to bring a 115-bed luxury hotel to a prime city location on Newcastle's Quayside.

To say that the development has been warmly welcomed would be an understatement. This is a significant leap forward for the city and represents a weighty contribution to the vitality and vibrancy of an important economic sector.

The hotel means we can now mirror what’s on offer in comparable northern cities like Leeds and Manchester which is essential for business and supporting more inward investment to the region.

UK-owned Dakota Hotels – which describes itself as a “luxury lifestyle brand synonymous with style and impeccable service” – acquired the 60,000 sq. ft. St Ann’s Wharf office building which overlooks the River Tyne, for an undisclosed sum.

Newcastle City Council is set to rubber-stamp its planning application on Friday (1 Sept) and, if approved, dozens of full-time jobs could be created and 65,000 visitor nights per year, catered for.

The catalyst

Knight Frank was appointed to market the striking St Ann’s Wharf property in January this year, following the departure of its longstanding tenant, Womble Bond Dickinson.

The law firm announced it was moving its 420-strong workforce to the city’s Helix development, last year.

The owner of the rather grand, collegiate-looking St Ann’s Wharf – a private individual - sought advice from Knight Frank on the uncertain future of their asset, and how they could maximise its potential within the confines of a very different market from the one present when they originally acquired it around 20 years ago.

The rise in popularity of modern, hybrid - more sustainable - workspaces that did not fit the traditional office mould on offer at St Ann’s Wharf, was the catalyst for the departure of Womble Bond Dickinson (WBD).

When one door closes, another one opens

We knew the property would need significant investment to convert it into saleable, modern office space so the possibility of a change of use was on the table, early doors.

The aesthetic of the building’s exterior, its location and the near-future requirement to support the accommodation needs of visitors to new developments such as the concert arena and conference centre being built just across the river – made it ripe for consideration to be a hotel.

For the landlord, it was imperative that a strategy for sale or re-leasing was reached quickly because, with no tenant in the building, exorbitant costs would rack up. These expenses included an eyewatering amount in empty building rates, as well as service charges for the property’s 100 plus car parking spaces in the adjacent multi-storey car park, and insurance and property management fees.

Due to all these factors, Knight Frank needed to develop a plan that encompassed expertise from four different disciplines. Patrick Matheson was involved on the office agency front. Elizabeth Fletcher advised on property management. Joanne Corney worked up a plan to mitigate business rates. And Ian Tew provided building consultancy expertise.

Joanne Corney is by far the best expert in the North of England on business rates and she was key to ensuring the landlord’s healthy return on his investment, here.

She applied her knowledge and many years of experience to reduce the hefty annual rates bill on the property to a rateable value of just ￡1. She worked closely with Ian Tew to determined what parts of the building needed to be stripped-out to achieve this objective.

Partner in property asset management, Beth Fletcher, took care of all the HR issues of the previous staff that needed mopping up and managed the security and maintenance to satisfy the property’s insurers.

Paddy did a great job of marketing and ultimately finding the right buyer, willing to pay the right price. It was a complex transition and transaction but one that will pay dividends for the city.

We were delighted to play our part in bringing home a hotel brand that matches our newly established world-class football team.

The Plans

Dakota Hotels is proposing to make some minor alterations to the building’s facade fronting the Quayside, as well as a ground floor extension to cater for a new entrance lobby. The existing courtyard at the front of the property will be reconfigured to provide a vehicle drop-off area, while first-floor level bedroom terraces and new balconies at second-floor level are also planned.

Most of the building’s current features and details to complement the architectural heritage will be retained, while the new-look entrance lobby, reception and ground floor bar areas will be designed to fit in with the Dakota brand style. PV solar panels are planned for the roof to provide a low-cost sustainable energy source.

A spokesperson for Dakota Hotels added: “This is a prestigious project that will create jobs, prosperity and deliver a big boost to an important city centre location.”