Availability is down in the North East from a peak of 2.65m sq ft in 2007 to around 1.15m sq ft, just over two years supply.
There are several buildings still available. However, there are only three new sheds over 100,000 sq ft and two between 50 – 100,000 sq ft. These include two units of 263,000 sq ft and 83,000 sq ft at Evander Properties’ Drum Park, which is being marketed by DTZ and GVA; a 63,000 sq ft warehouse at Follingsby, a 140,000 sq ft shed at Foxcover Flex and a 100,000 sq ft warehouse on Easter Development’s Cherry Blossom Way. Letting agents DTZ and Knight Frank have reduced the rent on this building from £4.50 per sq ft to £3.95 per sq ft. The building is located close to the Nissan factory.
On the second-hand front there are a few more choices but many of these buildings were previously used by manufacturers so lack features such as numerous dock or level access doors. ST160 is a 160,000 sq ft former TV manufacturing facility owned by Henderson Asset Management. It is being marketed by GVA and Frewpain. Although not a true distribution warehouse the facility is located on a 13-acre site.
There is the 320,000 sq ft former Co-op distribution facility where around 200,000 sq ft is still available although some of the older buildings will be demolished to make the site more attractive. Currently some 115,000 sq ft is occupied by Simpson Bros Transport a local firm which secured a contract to distribution fruit juice for Refreshco last year. DTZ is sole agent.
King Sturge is also offering an ex-manufacturing facility in Washington totaling some 150,000 sq ft.
Nick Atkinson of DTZ says there has been little deal activity of late but what significant enquiries are made are mostly D&B.
“While there is a growing shortage of modern space and there is land available nobody can finance a speculative build without the aid of gap funding, it is just not commercially viable.”
The good news is there are plenty of sites for occupiers to consider. There is PPG and City Land’s Link 66 at Darlington totalling 100 acres, being marketed through Gent Visick, Sanderson Weatheralls and Carter Jonas. Then there is Buccleugh Properties 25-acre scheme known as Commerce Park at Scotch Corner which has outline consent for a single unit of 150,000 sq ft. Letting agents are Gent Visick and King Sturge.
There is Merchant Place Developments’ Amazon Park at Newton Aycliffe where there is outline permission for up to 1.4m sq ft of space. The developer is actively seeking pre-lets through its agent, Cushman & Wakefield and King Sturge, on the scheme, which could include the largest distribution building ever seen in the North East, a one million sq ft structure.
Then there is Wilson and Clugston’s Turbine Business Park in Washington. The mixed use site could accommodate up to 350,000 sq ft of distribution space. Letting agents are King Sturge and Lambert Smith Hampton. Finally, Helios Properties has Wynyard Park where it can develop 417,000 sq ft of distribution space.