Terrace Hill has ended plans to prelet 100,000 sq ft of office space to energy provider Npower at Baltic Business Quarter in Gateshead in a major blow to the regional market.
Last year energy provider Npower agreed to take 100,000 sq ft at the Baltic Business Quarter in what was he largest letting in the region for more than five years.
It was part of a £20m epxansion plan by Terrace Hill which is also planning to develop a 150-bedroom hotel, nursery and coffee shop.
In a statement to the Stock Exchange today it said: ‘The adverse movement of investment yields since the pre-letting was agreed has meant the project would not be profitable and, as a result, Terrace Hill has decided to postpone this phase of the development until an alternative profitable pre-let has been secured.
‘The Baltic Business Quarter remains very attractive to occupiers and it is already home to Gateshead College’s 180,000 sq ft facility and the regional headquarters of the Open University.
'Terrace Hill continues to work on a number of further potential pre-let opportunities, on terms that reflect current values and which should produce healthy margins.’