A “major retailer” is on the verge of taking over Newcastle’s vacant Debenhams store, it has emerged.

Eldon Square has been without a tenant for one of the shopping centre’s flagship units since Debenhams’ closure in May 2021, following the department store giant’s collapse.

But shoppers could soon see a new name moving into the empty space, with terms having been agreed with a new operator whose identity has not yet been announced.

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A report confirms that a retailer is set to take a 10-year lease on the two middle storeys of the former Debenhams site, while talks are progressing with a “number of leisure operators” to find new uses for the ground and top floors.

There could be more good news for Eldon Square too, with the centre’s empty Waitrose and Topshop stores also expected to be taken over.

A quarterly update report published this month by Intu Debenture Plc, which is now the majority owner of Eldon Square after Intu fell into administration in 2020, confirms: “Heads of Terms have been agreed with a major retailer to take a new 10-year lease of two floors of the former Debenhams unit. The unit will extend to c. 62,500 sq ft. Solicitors are instructed. 

“The specification has been agreed with the retailer and works to strip out the former Debenhams unit are to commence in July [2023]. Following a full tender process, the contract has been awarded to a North East based contractor who demonstrated significant savings for the project. Completion of the strip out works is scheduled for December 2023. 

“Active engagement with a number of leisure operators for the ground floor and top floor of the former Debenhams unit is ongoing. The design team is currently reviewing proposals for the top floor with a new atrium being incorporated within the scheme design to improve the access arrangement to both the street level floor and upper level from Newgate Street.”

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The report adds that a discount retailer has agreed terms to relocate to the former Waitrose inside Eldon Square and that a fashion store is due to upsize by moving into the empty Topshop unit.

There are also hopes that a new use can be found for the former recreation centre, with a “major leisure operation” having expressed an interest.

The Local Democracy Reporting Service reported last year that there had been five offers from leisure companies to take over the huge Debenhams site, in Newgate Street.

Its closure came amid a devastating few years for Eldon Square as the retail industry suffered during the Covid pandemic. 

Newcastle City Council owns a 40% stake in the shopping centre, the value of which was reported to have dropped dramatically – down from £145m to just £29m.

However, a new report presented to the local authority’s audit committee on Friday morning states that the value of the council’s share has risen to £37m.

Auditors EY said this was because “challenging working relationships” between the council and Eldon Square’s management company meant they had initially been unable to obtain up-to-date tenancy information about the shopping centre.

Intu Debenture’s latest report puts the overall value of Eldon Square as of December 2022 at £71.2m, compared to £93.2m the previous year, and £108.9m in 2020.

But it also states that footfall in 2023 has improved by almost 15% and that shops including H&M, Next, Boots, and Fenwick have all reported a growth in sales.

Eldon Square was contacted for a comment.