Large-scale big shed distribution facilities have been seen in the Midlands and along the M62 corridor for many years, but now Simon Hill of King Sturge says there is increasing demand in the North-east.
THE North-east has not, traditionally, been a location for large distribution facilities – with many retailers servicing the region from outside.
Asda in Washington and Morrisons in Stockton stand out as exceptions but Tesco, and many other big retailers, don’t have a major facility in the region.
It has been suggested that the reasons for this are that the North-east is too small in population and considered more remote in terms of location when compared to the likes of the Midlands, which has attracted many large distribution facilities.
It seems that in the past, the North-east region has been considered more industrial than distribution.
However, there is strong evidence to suggest that this is changing, with some very high-profile companies taking large distribution facilities.
An example of this is Teesport, near Middlesbrough, where Asda has developed a £20m import centre, providing them with their first international logistics operation in the North-east.
The benefits of regional ports are clear, with Asda estimating it will save two million road miles a year by shipping 70% of its distribution direct to Teesport, rather than delivering it to southern ports then transporting it by road to its northern-based distribution centres.
This will not only reduce transport costs, but will also reduce road congestion and environmental pollution, and improve the speed to market of key product lines.
In addition to major developments on Teesside there is also Wynyard Park in Stockton, where HelioSlough has built a 302,027sq ft distribution/industrial unit, providing the biggest speculative development of its kind in the region.
The key benefit of the location is the readily available and competitively-priced workforce.
With an average unemployment rate of 4.2% (above the national average) and full time workers’ gross earnings at 15% (below the national average) Tees Valley provides a much cheaper labour alternative to the south.
At Faverdale Business Park in Darlington, Easter Group has developed 190,000sq ft of speculative industrial and distribution space alongside the Argos Direct regional distribution centre with units ranging from 20,000sq ft to 100,000sq ft.
Other drivers behind this change include a shortage of major sites in some of the more established distribution locations which has driven up values, whilst the North-east can still offer retailers sites at competitive prices.
It is clear that the North-east can offer unrivalled benefits for big retailers and with a host of major new developments in the region, there is clear evidence the North-east is leaving behind its former reputation of being solely industrial and is moving forward to become a key distribution location.