It’s fair to say that activity in the industrial and logistics market has been a little subdued over the last 12 months. This could be down to any number of factors, but uncertainty over Brexit is undoubtedly the chief culprit.
It is by no means all doom and gloom, however with plenty of positives. GVA are marketing one of the largest speculative schemes to happen in the region over the last 10 years at Saltmeadows Road in Gateshead, where 100,000 sq. ft. of space in 11 units is being built by Langley Holdings and which will be ready for occupation by September of this year.
At Monkton Business Park in South Tyneside Hellens Developments are building 3 high quality industrial units totalling 58,000 sq. ft. The units will be ready at the end of May 2018 and there is already strong interest from the occupier market. GVA and HTA are the joint letting agents.
Despite these developments there continues to be a shortage of good quality modern stock. This is the case across most size ranges but particularly for larger units. Occupiers looking for buildings in excess of 100,000 sq. ft. will find themselves with few options.
Nissan’s announcement that they will build the new X Trail and Qashqai at their Sunderland plant is a huge boost for the region. This has generated numerous requirements from their supply chain circulate within the market, although these have yet to turn into any meaningful commitment to take up.
The good news for landlords is that the shortage of stock continues to drive up rents. Increases are happening pretty much across the board, but particularly for modern stock in prime or strong locations where record rental levels for the region are being achieved.
Demand for industrial property in the North East comes from a diverse mix of companies and this is likely to continue. The region maintains a strong manufacturing heritage and this sector remains more buoyant than elsewhere in the country. This is one area where Brexit may actually help boost demand as the larger manufacturers in the region look to bring their supply production and distribution closer to home, to avoid any volatility in currency markets.
In summary, the industrial and logistics sector in the region may be challenging, but GVA and other leading industrial agents feel that there is plenty to be optimistic about going forward.