New HQ for oil and gas firm in the pipeline
Stoford Developments has today announced the construction of a multi-million-pound new Northumberland headquarters for PII Pipeline Solutions, a subsidiary of Baker Hughes, a GE company (BHGE).
The development will see a 74,110 sq ft two-storey office and manufacturing unit comprising double height industrial space with associated car parking, service yards and landscaping to be built adjacent to the firm’s existing base at Cramlington, near Newcastle upon Tyne.
Full planning consent was granted earlier this year.
Commercial property developer Stoford Developments is delivering the project. It involves the demolition of existing buildings to pave the way for the new unit, which is being constructed by Bowmer & Kirkland and forward funded by LXI Reit plc.
The development is expected to reach practical completion in Q2 next year.
LXi REIT plc has contracted on the pre-let forward funding acquisition of the property, with a total funding commitment of £11.09 million, reflecting a net initial yield of 5.75% on the asset acquisition.
The property is pre-let to BHGE’s subsidiary, PII Ltd, whose lease obligations are guaranteed by its parent, GE UK Group. PII is one of the industry leaders in inspection and integrity services for gas and liquid pipelines.
PII Pipeline Solutions’ regional manager Kevin Johnson said: “This new state of the art facility positions us to continue developing new technology and deliver safe and quality services to our customers”
Andy Kinnear, construction director at Bowmer & Kirkland, said: “‘We are both excited and delighted to have been awarded this high profile contract and look forward to successfully delivering this new facility for PII on behalf of Stoford Developments.”
Simon Lee, partner of LXi REIT Advisors Limited, said: “With a lease term certain of 20 years to the strong covenant of GE UK Group, this forward funded investment provides a secure, long term and RPI inflation-linked income for the company, with an attractive initial yield. BHGE’s commitment to the location is demonstrated by the extensive fit-out works it is funding and the fact that it has been based at this site for over 30 years.”