The North East investment story needs two engines

Every summer, the EY UK Attractiveness Survey and Irwin Mitchell’s Attractiveness Index land within weeks of each other.

And every year, the North East headline reads the same way: down.

This year is no exception.

Regional foreign direct investment project numbers fell sharply in 2025, and neither Newcastle, Sunderland nor the Tees Valley feature near the top of the structural rankings that benchmark skills, infrastructure and growth potential against London, Manchester or Edinburgh.

When we talk about foreign direct investment, we aren’t just looking at abstract numbers on a corporate spreadsheet; we are talking about global companies physically investing capital into our region, whether that means building new plants, expanding existing facilities or acquiring local businesses.

Despite these physical injections of capital, looking beneath the headline reveals a more useful story - one that has direct implications for how this region should approach property, investment and growth.

Firstly, the project count headline is a blunt instrument.

Annual foreign direct investment figures are notoriously noisy: investment values go undeclared, job figures are disputed and a single large announcement can be counted across several years.

A region the size of the North East will always look more volatile, project to project, than London or the South East because of scale.

What the headline misses is the multiplier value, which includes the supply chain spend, skills development and follow-on investment that a handful of anchor projects in offshore wind, battery manufacturing and clean energy generate locally, particularly around the Teesside Freeport and the Northumberland-Tyneside Investment Zone.

That is where the real, durable value of inward investment sits, and it is realised through deals, leases and site assembly, rather than through the press release.

Secondly, and just as importantly, a region that measures its success solely by its ability to attract outside capital is fighting half the battle.

The North East’s SME base, already trading from our high streets, business parks and industrial estates, is where the bulk of regional employment sits and where genuine productivity gains are won.

The evidence is consistent: businesses that scale see materially higher productivity than those that don’t, and scaling depends on access to the right premises, the right finance and the right advice at the right moment.

A regional strategy that chases foreign direct investment announcements, while overlooking the everyday SME that needs a rent review handled fairly, a lease renewal negotiated competently or a new unit found to expand into, is only ever telling half the growth story.

This dual approach is exactly what our region’s own authorities have been building towards over the past year.

The North East Mayoral Strategic Authority’s £4.4 billion investment prospectus, launched last year, set out industrial, commercial and residential opportunities across more than 18 billion square feet of sites, and the region continues to record among the highest foreign direct investment jobs per capita of any UK area.

Delivery is now visible on the ground: an £11.3 million North East Investment Zone commitment is unlocking the next phase of NETPark, in County Durham; a £2 billion Mayoral Development Zone is under way in Newcastle and Gateshead; a £1.85 billion transport settlement is funding the first Tyne and Wear Metro expansion in 30 years; and a new £22 million housing programme is targeting more than 1100 homes on brownfield and stalled sites.

None of that happens without agency, valuation and lease advisory expertise translating ambition into deliverable transactions.

Tees Valley Combined Authority tells a similarly strong story.

Its £160 million Investment Zone, delivered with Teesside University, is driving innovation clusters in Hartlepool and Middlesbrough, including new production and studio space at Hartlepool’s Northern Studios.

Crucially, its strategic economic plan places SMEs, innovation and individuals at the centre of the region’s growth ambitions, rather than treating them as a secondary concern to inward investment.

And it is backed by real programmes.

Tees Valley Labs, funded through the UK Shared Prosperity Fund, runs The Stable business incubator and The Forge accelerator for local start-ups and scale-ups, while the Tees Valley Securing Investment programme connects SMEs directly with grants, funding and private investment routes.

That same start-up and scale-up infrastructure runs right across the wider region through the North East Business and Innovation Centre (BIC) and Sunderland Software City.

The North East BIC has spent more than three decades supporting hundreds of new businesses a year from its Sunderland, Darlington and Washington centres.

And its Enterprising Sunderland Innovation Grants have already helped local firms, from manufacturers to tech start-ups, scale with real, deliverable funding, rather than just advice.

Sunderland Software City performs the same function for the region’s fast-growing digital and tech economy, running talent pipelines and SME-focused digital adoption programmes across Newcastle, North Tyneside and Northumberland, as well as Wearside.

The North East doesn’t need to choose between courting outside investment and backing its own businesses.

It needs a unified ecosystem of advisors, operators and authorities that understand both halves of the equation and can move fluently between them.

That is how this region’s investment story will continue to prove much stronger than the headlines suggest.

Kevan Carrick is co-founder and owner of JK Property Consultants LLP. He is a member of the RICS Land & Natural Resources Professional Group Panel that consulted on the National Planning Policy Framework, and is chair of the North East Business and Innovation Centre.

Want your business, product or service to be seen regionally and nationally? Bdaily helps you get your story in front of the right audience, every day. Find out how Bdaily can help →

Join more than 55,000 subscribers by signing up to our daily bulletin each morning here.