Northumberland County Council has adopted orders for three sites north and south of the estuary with government approval.
Developers must still satisfy some pre-conditions though. Agents note a marked uptake of modern industrial units in the North East - particularly when less than 20 years old, says Simon Haggie at Knight Frank.
Because of funding difficulties and current rental levels, little movement to develop stock levels is evident. Modern units in Tyne and Wear and South East Northumberland are clearly evident, particularly at 10,000 sq ft plus.
The sole speculative scheme nearing is from UK Land, due on site at Team Valley, Gateshead, this summer.
It will offer three units: 11,000sq ft, 18,000sq ft and 24,000sq ft. UK Land’s aspirations to be planning similar size developments in North Shields and Cramlington will depend on securing European grant assistance.
Headline rents remain flat. But growing shortage of quality floorspace is reducing incentive packages. Team Valley has traditionally attracted some of the highest rents of £6psf but UK Land may seek £6.50 and £6.75 for its new development.
Pressure on some “tired” estates may spur landlords to refurbish.
UK Land’s Tyne Tunnel Estate, for example, dating to the early 1970s, has enjoyed a higher volume of lettings following a refurb, with an investment of almost £1m in the 100,000sq ft former Marks & Spencer warehouse, now nearing completion.
The Tyne Tunnel enlargement has also helped. Overall last year, investment in retail and leisure helped offset a 95% plunge in the region’s offices market.
Total value of commercial property investment stayed largely static at £233m (£234m in 2011), Lambert Smith Hampton reports. But office investment has brightened.
In 2012 it fell from £47.5m in 2011 to £2.5m, giving just 1% of the market, whereas leisure and retail accounted for two thirds (£153m). Three deals stood out then: Osprey Equity Partners’ purchase of Sainsbury’s at Riverside Road in Sunderland for £35m in Q2, the Crown Estate’s acquisition of The Gate in Newcastle for £60m in Q3, and Westmont Hospitality Group’s buy of the long leasehold in the Staybridge Suites in Newcastle for £12.5m in Q4.
Now in Q1 take-up has risen 48% plus. Newcastle city centre saw 13 deals, out of town there were 41.
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