PLANS to redevelop a dilapidated former sorting office in the centre of Newport into offices and a hotel are a sign of the city's growing reputation, the council leader has said.

As the Argus has previously reported, Cardiff-based Garrison Barclay Estates has presented plans to convert the five-storey IAC building in Mill Street, with Newport City Council planning to lend the company £12 million to pay for the scheme.

The council's Labour-run cabinet signed off the loan at a meeting this evening. Speaking at the meeting, leader Cllr Debbie Wilcox said Garrison Barclays had approached the council with the plan, and she was delighted to be able to make it a reality.

"The confidence in this city is growing daily," she said.

She added the development would build on the success of Friars Walk.

"It is hard to imagine what Newport looked like before Friars Walk," she said.

"What we should do now is imagine what Newport will look like if enough key strategic projects come to fruition."

Cllr Jane Mudd said redeveloping the dilapidated 55,000 sq ft building, which is next to the rail line and seen by thousands of train passengers every day, would help improve the image of the city as a whole.

"We are open for business and this highly visible building will give that image," she said. "This is a very positive step forward for the regeneration of the city."

Cllr Ray Truman said he was particularly pleased to hear Garrison Barclay had developed the plans, rather than it being a scheme led by the council.

"Isn't it nice to have a company come to us and ask if they can develop in the city?" he said. "We haven't had that before."

A report presented to cabinet members said, while Newport has a “wealth” of vacant office space, most of what is available within the city centre is not of a high standard.

“The tired accommodation is generally unappealing to potential tenants, particularly high-value, high-growth occupiers who prefer to be based in the more expensive but desirable office districts of Bristol and Cardiff,” the report said.

“Nevertheless, the strategic location of the city centre and its relative affordability, improving quality of offer and transport infrastructure mean that it is an unexploited resource in terms of the development of high-quality office space.”

It also says the success of the scheme would help the city capitalise on opportunities presented by improvements to railway infrastructure, developments in the city centre such as Friars Walk and the ending of the Severn bridge tolls next year.

“Even though Newport is commercially very competitive with Cardiff and Bristol, the need for a quality working environment and a good standard of leisure and transport access close to the workplace is rising up the list of priorities for those companies seeking new office accommodation,” it says.

“The IAC building enjoys a favourable location in terms of providing this access, close to the rail station and motorway network.”

Announcing the plans earlier this year, development director with Garrison Barclay Ian Carter said: “We chose the building because we see Newport as a city with fantastic potential which is just starting to be realised.

“The City Deal, M4 relief road and lifting of the Severn bridge tolls will only serve to bolster this position.”

Garrison Barclay has previously said it hopes the development will be complete by the end of 2018.