A PROPERTY company at the forefront of a regeneration project in the North-East is to merge with another firm.

Terrace Hill, which was chosen to develop Gateshead's £250m Baltic Business Park, is to merge with Glasgow residential investment company CapitalTech plc.

The new business, Terrace Hill Group plc, will now have combined assets of about £160m.

Terrace Hill, which has offices in Thornaby, near Stockton, as well as London and the South-West, will also take on CapitalTech's nine staff.

It is hoped that up to 5,000 jobs could be created at the Gateshead site, which will also include the region's first product development centre, Knowledge Campus.

The company was also recently picked to work on its first project in Newcastle city centre - The Cube, a 24,500sq ft luxury office development in Barrack Road.

The property company has gone from strength to strength as a developer since its creation in 1995.

Terrace Hill has been riding high in recent years, particularly in the region, partly due to the firm's success on Tyneside.

At Teesside Park, several blue chip companies and institutional investors have been letting spaces, many of them attracted by the business setting and the company's robust long-term growth.

Company director for the North-East Philip Leech is confident that the merger will provide plenty of scope for strategic growth in the future.

He said yesterday: "The merger combines Terrace Hill's profit stream with the asset base of CapitalTech.

"This will no doubt increase the overall ability of the enlarged group to earn profits.

"This will be done by maximising new opportunities and utilising its in-house ability to complete corporate acquisitions."