REGIONAL development agency One NorthEast has made "one of the biggest deals in its existence" to transform its £120m property portfolio.

The agency has struck a ten-year deal with UK Land Estates (UKLE), based in Gateshead, to bring private investment and expertise to about 50 industrial and commercial estates across the region.

The portfolio stretches from the Scottish Borders to the Tees Valley, and includes about 1,700 properties.

UKLE beat fierce competition for the partnership deal, and is understood to have beaten Ashtenne Holdings, which established a foothold in the North-East in 1994 when it bought estates and office buildings in Washington, Tyne and Wear and the Eaglescliffe Industrial Estate, near Stockton, before later acquiring the Cleveland Trust estates.

Sir Ian Wrigglesworth, executive chairman of UKLE, said: "This is one of the biggest deals One NorthEast will do in its existence.

"This is bringing private sector experience and commercial sense to running property for the benefit of the region in a much more commercial way."

Sir Ian would not quantify the level of investment, but said that UKLE had "paid handsomely" for the 50 per cent stake.

He said One NorthEast had the option of selling its remaining share at any time during the ten-year term.

Neil Etherington, strategic investment and marketing director of Tees Valley Regeneration, said: "This is an innovative, ground-breaking deal that is good for the region and good for the tenants."

This is the first time that a regional development agency has struck a public private partnership for its land portfolio and one that, if successful, is likely be copied in other regions.

The move has been planned for two years, and UKLE worked for the past six months on its bid.

The partnership will inject substantial resources during the life of the partnership to regenerate the properties and the estates, providing business accommodation throughout the region.

Margaret Fay, chairman of One NorthEast, said: "This is an exciting new venture for the agency, enabling us to provide the region with the first-class business accommodation required by 21st Century companies."

Six staff from One NorthEast will transfer to UKLE to work on the project and another six posts will be created by the deal.

UKLE was backed by Bank of Scotland and was helped by solicitors Travers Smith Braithwaite and surveyors Lambert Smith Hampton.

King Sturge Financial Services acted as lead consultants to One NorthEast, which was advised by law firm Eversheds.