Demand for large scale property at one of the region’s largest commercial sites, Team Valley Trading Estate, requires immediate action - a top real estate company suggests.
Danny Cramman, head of Industrial Agency at GVA in Newcastle, says that market confidence and high levels of take-up have created a growing shortage of large commercial space on Team Valley.
Mr Cramman said: “Action is needed sooner rather than later and it is encouraging to see some developers such as UK Land Estates looking to bring forward schemes to address the current situation.
“Part of the estates appeal is the amount of space located there and the choice this offers to prospective occupiers. During 2014 the availability of standing stock has diminished rapidly, particularly in the larger size ranges and this is an issue for the estate moving forward.”
Four years ago UK Land Estates submitted a planning application for a major new industrial accommodation complex, to be known as Dukesway Central, on the estate. Work has now started on the project with Boldon-based Arcterra providing construction consultancy. Dukesway is set to provide 200,000 sq ft of much needed industrial space.
Naylors Chartered Surveyors’ Keith Stewart suggests such develop, along with local infrastructure improvements, could trigger further growth at the estate.
Mr Stewart suggested a further 1,000,000 sq ft of industrial and mixed use development space could emerge in the next few years
The company director said: “Team Valley remains a very popular location for all business sectors, given its strong transport links, mixed use and business to business activity. We have seen a lot of uptake in space generally over the last year with high levels of demand and as there has been no development here for seven years the void rate on the estate is at its lowest for quite some time. Incentives are also being driven due to the lack of competing space and rents are holding well.
“In light of the demand we are now experiencing it is likely that we will see some rental growth here over the coming year. There will also be some new development starting in the next twelve months with UK Land Estates aiming to start Dukesway Central.
“In addition plans are being drawn up for a new development on Kingsway as well as Eighth Avenue, which will replace the old engineering works with new, high-end use buildings. Discussions are being had with some end users looking for design and build opportunities.”
The estate has diversified considerably over the last 88 years since its inception. The area now hosts Retail World, which is home to a number of major brand retailers including Homesbase, Sports Direct and Currys PC World. Service and office based operations also occupy much of the estate.
Established in 1936 by central Government to alleviate the depression and high unemployment figures which dominated the region’s economy as a result of the decline of strategic industries including coal mining and shipbuilding - the estate has since gone on to become one of the largest areas of commercial space in the world.
At its inception the 700-acre site was predominantly unfit for development, being low lying marshland alongside the river Team on the southern edge of the Tyneside conurbation.
It now houses some 700 companies which employ 20,000 - made possible by the forwarding thinking design of the estate in the 1930s. Investment in wide roads and the diversion of the meandering river Team into the central reservation of the southern part of the Kingsway central boulevard is, an “excellent example of long term infrastructure investment which still meets the requirements of modern day industry,” said GVA’s Danny Cramman.
In the mid 1970s a substantial piece of land was sold off to build the Gateshead Western bypass, diverting traffic which previously had run through the estate along the Kingsway dual carriageway.
The designation in 1981 of Enterprise Zone status for the southern half of Team Valley, including around 240 acres of undeveloped land accelerated development momentum and brought new private sector development due to attractive financial incentives for developers and up to 10 years business rates relief for occupiers.
Today, UK Land Estates owns 650 acres freehold of the 700 acres estate. The estate’s core is divided into different entities, including occupational leases and long-term ground and premium leases as well as development land including Dukesway Central, Kingsway North, Earlsway Trade Park, 5th Avenue Trade Park and others.
Mr Cramman said: “Developers and agents alike are reporting strong levels of take up on the estate. Over the last 12 months a number of key industrial buildings have left the market and landlords are enjoying the highest occupancy levels seen for a number of years.”