Construction work has begun at the former Dunlop site in Team Valley. Queen's Court, as the new development will be known, will initially offer six hybrid units of approximately 3,300 sq ft and four large industrial units from 14,673 sq ft up to 29,346 sq ft.

Phase II of development will provide a further four hybrid units offering 50 per cent office and 50 per cent workshop/storage accommodation.

It is expected that work will complete on this £7.5m development, designed by TTH Architects, in October 2008.

Buildings for Business, the joint venture between One NorthEast and UK Land Estates, has awarded the contract to Howard Russell and the building is currently being demolished.

When completed, Queen's Court is expected to create over 400 jobs.

Michael Spriggs, managing director of UK Land Estates, said: "This is great news for the region, with the potential to create over a huge amount of jobs and bring further success to the internationally recognised Team Valley.

"We are already talking to a number of interested occupiers and believe the scheme will be a great success."

Knight Frank's Mark Proudlock welcomed the development, saying: "With occupiers waiting, it is very pleasing to see that the project is now under way.

"The mixed-use hybrid units have proved very successful in the region and we anticipate a good amount of interest.

"Larger industrial units have always proved popular and we envisage these being of interest to a number of occupiers looking to expand or relocate to Team Valley, which is still considered to be one of the region's premier business locations."

Ed Rowley, acting director of Regeneration at One NorthEast and board member of Buildings for Business, said: "The former Dunlop site has great potential and I am delighted that we have been able to approve plans to convert it into thriving a business centre have been given the go ahead.

"Queen's Court will provide much-needed, high-quality office, workshop and industrial space for the region's businesses, and it has the potential to create jobs and bring even more success to the area.

"The continuous creation of business developments like this is vital if we are to achieve the ambitious RES target of creating up to 22,000 new businesses in the next decade."