Member Article

HTA Real Estate negotiates biggest North East industrial letting for four years

HTA Real Estate has negotiated the biggest North East industrial letting for four years, allowing a growing packaging company to consolidate its operations together on one site.

Drum One, at Chester-le-Street’s Drum Industrial Estate, is the largest speculative industrial building ever to be constructed in the region. The property, which includes over 252,000 sq ft of warehousing, 11,000 sq ft of office and extensive yard space, is more than double the size of any competing units outside of Yorkshire or the North West.

Acting on behalf of asset manager Angelsea Capital, Newcastle-based commercial property specialist HTA has let the building to packaging giant Coveris Rigid, enabling the business to bring its manufacturing and warehousing under roof. Coveris Rigid, formerly known as Kobusch, is part of the global Coveris Group, which was formed by the consolidation of a number of packaging companies owned by Sun Capital Partners, these also included Paccor, Exopack, Britton and Paragon.

Ian Donal from Coveris said: “We are relocating to Drum One from Tanfield Lea and are looking forward to bringing our operations on to one site. We currently have six manufacturing units and three warehouse locations and we had struggled to find one site large enough for our needs. Drum One is ideal. It has the space we require and its position next to Junction 63 of the A1 (M) means the logistics are excellent, too. We are now planning a multi-million investment in equipment and working practices to further boost efficiency at the new site.”

Drum One was constructed in 2008 and its sheer size has made it a challenging project to let. Neighbouring Drum Two, which has 271,000sq ft of space was a pre-let deal with the Co-op, and the 83,950 sq ft Drum Three was sold to Parcelforce last year. Together, the three buildings form Drum Park, which was a unique development for the North East that is unlikely to be repeated in the current economic climate.

HTA Director Nick Atkinson said: “This deal is a real confidence boost for the North East industrial property market and I’m delighted this huge building will be put to good use after being vacant for a long time. Drum was the last of the big sheds built before the crash so from now on larger occupiers will have to commit to new buildings or rely on second hand stock coming available. New build is expensive and has a long delivery time, but the second hand stock is very thin on the ground.”

HTA worked with joint agents DTZ and GVA to market the building. Coveris Rigid received support from Durham County Council and Smith Cole Wright to help in its relocation to Drum One.

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