Confidence is key at riverside park.

WHEN Adderstone Group decided to tackle the regeneration of one of Sunderland's most famous ship building yards, Austin and Pickersgill, the world was a very different place.

Businesses with good trading records could obtain 100% funding to acquire their own premises, property funds were snapping up entire developments and every selfrespecting investor wanted a commercial property in their pension plan.

Five years on, Adderstone achieved practical completion of phase one and immediately found that purchasers under contract on 16 of the completed office buildings were unable to raise finance and technically insolvent.

We talked to Adderstone's managing director Ian Baggett about how his company came to build Quay West Riverside Business Park on a contaminated former shipyard site, whilst most sensible developers were downing tools.' "We knew this was an ambitious project from the outset but circumstances seemed to conspire against us," Mr Baggett said. "What was never intended to be a speculative development has become entirely speculative as a City-based investment fund who purchased a portfolio 'off plan' have been unable to honour their contracts. We sold almost all offices 'off plan' and in doing so committed to building out phase one expeditiously but as soon as the credit crunch kicked in we knew there was a risk that certain purchasers would struggle to complete. By this stage, we were too far down the line to put work on hold."

The scheme comprises 48 separate office buildings with more than 30 being built in phase one. The theme is very much based around the 'own front door concept' with all offices designed to give occupants their own self-contained building.

Although there is space on the site for a number of larger buildings, most of the space is aimed at accommodating smaller businesses.

Ian goes on to explain: "We were confident from the outset that there was considerable demand for 'move on' offices in between the A19 and Sunderland city centre.

"Business owners often want to own and control their own premises and avoid the often hefty service charges that can apply in incubator type set-ups and suites in larger offices.

"Most significantly, many business owners want the opportunity to buy their own premises as opposed to paying rent indefinitely."

The 400-tonne crane that had stood on the site since 1955 was dismantled late in 2007, on the eve of the credit crunch. Although the circumstances in the wider economy have changed drastically since then, Ian has remained confident throughout in both the demand for their product and the likely impact of the regeneration planned around their site.

Long-term plans for the riverside around the Queen Alexandra Bridge include a massive road revamp, a riverside village of about 1,000 homes on the former Groves site and a new Wear bridge.

Since completion of phase one, Adderstone and their agents have been overwhelmed with enquiries. As Neil Osborne from Storeys SSP explains: "Our client had been concerned about the timing of practical completion but by offering imaginative deals we seem to have struck a chord with business owners.

"We are offering up to 12 months rent free and an option to buy at a fixed price. For example, we can offer an office from as little as pounds 8,000 pa with a 12-month rent free and grant an option to buy for as long as three years at a fixed price of pounds 110,000. Also, Sunderland City Council is able to offer further generous incentives to qualifying businesses".

CAPTION(S):

INDIVIDUAL SPACE The theme at Adderstone's development in Sunderland is for each business to have its own self- contained building.