Saudi’s Newcastle Utd deal looks to kick start regeneration funding

Newcastle Gateshead

• Saudi purchase of club could mean investments in North East of England
• Abu Dhabi’s acquisition of Manchester Utd was catalyst for regeneration
• Newcastle City Council already has £1.5bn worth of plans for the city

The purchase of Newcastle United FC by Saudi Arabia’s sovereign wealth fund could open doors to wider investments in regeneration projects in the North East of England, according to the executive director of the Saudi British Joint Business Council, who will visit the area later this month to review potential opportunities.

Chris Innes-Hopkins said that following the Public Investment Fund (PIF)’s October 2021 deal to buy the English Premier League club for £300 million ($335m) it might consider following the model of Abu Dhabi United Group after it bought Manchester City back in 2008.

That acquisition was the catalyst for the start of a major new phase of regeneration. The club’s new owners and Manchester City Council formed a partnership – the Eastlands Strategic Development Company Ltd – with the priority to transform the 200 acres surrounding the Etihad Stadium to accelerate the regeneration of east Manchester. 

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“Newcastle is an interesting one because I think it might open the doors to some of the regeneration opportunities in the city and wider region,” Innes-Hopkins told AGBI.

And he revealed that he is visiting Newcastle later this month to look at the regeneration opportunities available to prospective Saudi investors. 

Asked if PIF might follow Abu Dhabi’s example in Manchester, he said: “In my view that’s a possibility, but it’s early days.

“That’s one of the reasons I am going up to Newcastle and Teesside later this month to visit some of the regeneration and decarbonisation projects and take the temperature.

“I think the North East as a whole is a very interesting area in terms to links with the Middle East and Saudi Arabia,” he added.

“Part of our mission as a business council is to get more Saudi interests outside of London and the South East, and I think this could be a good way to start.”

Henry Faun, partner and head of Knight Frank’s Private Office in the Middle East, said that following the success of Abu Dhabi in Manchester, there are opportunities for PIF to do something similar in Newcastle.

“The concept is good,” he said. “Abu Dhabi has made a success of it.”

“The opportunities are there and sovereign wealth funds do like the idea of regeneration, especially in areas where they already hold a commercial interest. It adds value to the wider community.”

Innes-Hopkins added: “My personal view is that it is a good opportunity and might lead to other things, provided the right links are built and we as a business council are certainly looking to help develop relationships between the regions.” 

He highlighted the potential of the Eastern Province in Saudi Arabia, which is the kingdom’s energy hub but also is committed to developing new technologies around decarbonisation. 

“There is a good opportunity there for academic institutions,” he continued. “Newcastle University has a strong energy department and you have King Fahd University of Petroleum and Minerals in Eastern Province. I think these could eventually work together on joint programmes.”

According to Newcastle City Council, £1.5 billion worth of investments are planned for the city, creating 14,000 new jobs and 21,000 new homes.

Projects include the City Centre Transformation Programme (CCTP) which aims to deliver a cleaner, greener heart of the city; the £260 million Quayside Arena in Gateshead which plans to open in 2023 and the Whey Aye, a 460ft observation wheel that will be the biggest in Europe when it launches in 2024.

Stephen Patterson, chief executive of NE1, a business improvement district in Newcastle, believes the PIF deal “sprinkles a little bit of gold dust on top of what is already a really strong and compelling offer”. 

“As well as direct investment in the football club, other investment will follow as confidence in the city and its future grows, and Newcastle moves into the top tier of UK cities,” he added in comments at the time of the takeover.

Although PIF hasn’t commented officially on regeneration opportunities, one of its partners in the Newcastle United takeover did hint at wider investment last year.

Jamie Reuben, of RB Sports & Media, said: “We will build a true community club, based upon our family’s knowledge of the city and in line with our plans that have been worked on closely with Newcastle City Council to deliver long-term sustainable growth for the area.”

Earlier this week, PIF governor Yasir Al-Rumayyan, also chairman of Newcastle United, revealed that he hoped to significantly increase the value of PIF’s investment.

He said: “You can see Chelsea was sold for $3.5 billion, so my potential now is to go from £350 million to at least $3.5 billion,” he was quoted as saying in the UK media.

Talking about PIF’s wider investments in the UK, Innes-Hopkins said that the recent opening of a London office is likely to spur future activity.

“I understand there is a PIF commitment to invest a certain amount of money in the UK and there is evidence of this now so I expect further investments, especially as it has now opened an office in London… They are already well tuned to opportunities in the UK. They are engaging although these investments don’t happen overnight but I think the UK is very much on their radar.”

In February, PIF announced the opening of three new offices in London, New York and Hong Kong, saying they were in line with the wealth fund’s continued international growth.

Newcastle City Council declined to comment and a request for comment from Manchester City Council went unanswered prior to publication.