The strength of the North East’s manufacturing sector and deals involving the Nissan supply chain have helped drive take-up of industrial and logistics floorspace, according to a new report by Jones Lang LaSalle.
Take-up in the North East of industrial and logistics floorspace in the first nine months of 2012 totalled about 4.1 million sq ft and take-up over the whole year is set to exceed 2011 by 32 per cent. This is better than the national average which overall is likely to undershoot 2011’s level by around a fifth said the report.
Take-up in the third quarter of 2012 fell by 47 per cent compared with the second quarter, but still exceeded the same period in 2011.
Simon Hill of Jones Lang LaSalle said: “The North East industrial market has held up well throughout 2012 with significant transactions being completed in both the manufacturing and distribution sector.
“It is, however, the strong manufacturing base in the region which has performed best with a number of companies linked to the Nissan supply chain having expanded into larger facilities over the last 12 months. This trend is likely to continue into next year as second tier suppliers start to enter the market for space.”
At the end of September 2012, total available supply across the North East stood at 17.4 million sq ft of industrial and logistics floorspace.
With limited speculative development taking place in the North East, the availability of prime new and good quality supply is likely to fall, according to JLL, but the availability of poorer quality supply will increase as occupiers release this space in favour of more modern properties.
“The biggest test facing the region is how the market is going to react to the lack of good quality available stock which has been exacerbated by the fact that there has been no new speculative development for a number of years,” Mr Hill added.