According to Simon Haggie of Knight Frank: “The Tyne & Wear area continues to attract the bulk of demand, with the well-established Team Valley Trading Estate generally proving to be the most popular despite its ever increasing traffic problems relating to congestion on the A1.
“Team Valley has suffered more than any area from the effects of the Highways Agency and, in particular, their reluctance to allow any new development which will add traffic to the A1. This has brought about a virtual moratorium on new schemes and reduced modern stock to such a low level in these areas that current demand greatly outstrips supply.
“The position in areas to the south of Gateshead, such as Washington, are little better with, for the most part, an aging stock of existing premises and little land to develop new schemes. This has created a pent-up demand for new and modern units in particular, largely from companies who are already based within the town and who are seeking to either expand or more often modernise their facilities, but do not wish to move to another area. To underline this we are shortly to see the first major redevelopment of a factory site in the town with the acquisition by Highbridge Properties of the former Dunlop/Goodyear premises at Wear Industrial Estate. The factory comprises almost 400,000 sq ft and dates from the early 1970s. It stands on almost 45 acres of land and while Highbridge’s proposals for the site are not yet finalised it is understood that they intend to redevelop the land with a series of large footprint industrial/warehouse units.”
Nissan has also taken the opportunity to cash in on the burgeoning market in Washington by disposing of over 40 acres of surplus land lying between its test track and the A1231 Sunderland Highway. The buyers, Clugston Developments, have recently received outline planning consent for a mixed scheme comprising factory/ warehouse units, office space and non food showrooms.
In the region, there are currently 201 new units either with planning consent, under construction or immediately available providing a total of 3,440,310 sq ft with an active development programme taking place among most districts across the region, the exceptions being Newcastle, Hartlepool, Middlesbrough and Durham City.
Current rental levels vary depending upon the size, but in general terms vary from approximately £4.25-£4.50 per sq ft for 100,000sq ft plus units up to £6.00 to £6.50 per sq ft for smaller units down to 5,000sq ft.