Newspaper article The Journal (Newcastle, England)

Another Successful Year, but Warnings of Issues on Horizon; INDUSTRIALS

Newspaper article The Journal (Newcastle, England)

Another Successful Year, but Warnings of Issues on Horizon; INDUSTRIALS

Article excerpt

Byline: COREENA FORD coreena.ford@ncjmedia.co.uk

THE North East's industrial property sector marked another successful year in 2015 with a strong lift in take-up of units in excess of 50,000 sq ft, according to research by Knight Frank.

Take-up in the first half of 2015 at 1,113,478 sq ft was just a fraction ahead of the second half's take-up of 1,085,627 sq ft which demonstrates the strength of the market for leasing or selling large buildings across the North East.

Rents remain at PS4 per sq ft for Middlesbrough and Stockton, rising to PS5.25 per sq ft for Wearside and up to PS6.25 per sq ft for Newcastle and Gateshead, and the agency's Newcastle office forecasts further growth this year for Sunderland, Washington, Newcastle and Gateshead. But Simon Haggie, partner in the firm's industrial agency, warns: "There are some issues on the horizon.

"The common complaint about a lack of available stock continues with Vantec Europe's 441,000 sq ft Washington warehouse boosting take-up. Other deals include Travis Perkins acquisition of the former Be Modern, 89,000 sq ft, premises in South Shields. Subject to planning permission this will be subdivided to a group trade park.

"The first significant development to be completed last year was Ravensworth Development's Portobello Trade Park, Birtley. Delivering seven units, the two largest units of 20,000 sq ft and 11,000 sq ft have been let.

"The falling oil price continues to take its toll with many of the engineering businesses heavily dependent upon the North Sea oil industry for work.

"This is yet to fully manifest itself because many companies are still concluding long term contract work, but unless there is a sharp increase in the price of oil in 2016 the offshore engineering sector will continue to contract. This will adversely effecting engineering space which for the last few has been enjoying significant take up.

"By comparison demand for modern high-bay warehousing is strong but currently there is little or no stock to satisfy needs in the key locations around the A1(M) and A19 corridors. …

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