Member Article

North East industrial take-up on the rise

North East industrial take-up of properties has risen to its highest level since 2009, reaching 1m sq ft, while UK deals figures for industrial space rose by 40%

The UK’s industrial sector has enjoyed a total of 64 deals in the second quarter; a 33% increase from quarter one, while the availability of the best industrial space fell by 10% to 18m sq ft.

Figures show an encouraging result for the industrial sector, while the report showed a significant rebound from quarter one with a take up of 5.8m sq ft.

Despite these positive results, the average deal size for properties remained fairly low at 126, 000 sq ft and take-up of top end industrial space fell for the fourth quarter in a row.

The types of businesses making deals on these properties has also changed, according to a report from property advisor DTZ, with logistics firms such as Royal Mail and Parcelforce taking 16% of industrial space.

The largest letting in the North East was a 420,000 sq ft space deal at the Turbine Business Park, which was let out to Vantec Europe for use by their Nissan logistics contract.

The North East also has the lowest amount of available grade A industrial space, with the automotive industry taking up a substantial amount of properties.

Chris Donabie, Senior Surveyor at DTZ in Newcastle, commented: “Supply chain to the automotive sector remained the driving force behind take-up in Q2 as a result of recent announcements by Nissan in Sunderland and Caterpillar in Peterlee.

“The North East market is not solely reliant on the automotive sector however, as witnessed by take-up from Spicers for a 107,000 sq ft dedicated tea production plant in North Tyneside, in addition to take-up from offshore engineering and clothing importers.

“The region was recently also boosted by the long awaited go ahead of the £77m investment by Hitachi Rail Europe in a new 450,000 sq ft assembly plant at Amazon Park in Newton Aycliffe to deliver the Intercity Express Programme (IEP). In excess of 700 direct jobs are projected with further.”

He added: “The substantial increase in take-up of space in the second quarter is particularly encouraging, and although the average size of transactions has not changed materially, this is largely due to the lack of availability of good quality larger buildings.

“Despite the recently reported economic statistics, manufacturing businesses accounted for a third of all deals, similar to the percentage recorded to the previous quarter, and off a 40% increase in floor area transacted.”

This was posted in Bdaily's Members' News section by Miranda Dobson .