The uplift in interest in taking industrial space, as seen in the final quarter of last year, is continuing with Gateshead’s Team Valley being a focus of post-Christmas activity says Mark Proudlock, industrial partner, Knight Frank.
January and February saw at least five modern units in excess of 15,000 sq ft on the Valley either let or under offer.
At the end of last year The Journal reported that 658,000 sq ft of industrial space were under offer in 14 transactions across the region from Teesside to Tyneside and south east Northumberland. So far this year the momentum has increased with a continuing shift in favour of the landlord. Incentives are still available but they are quietly reducing.
With diminishing levels of stock incentives are reducing by as much as 50% and it is this positive sentiment that is seeing some developers resurrecting or bringing forward new schemes. This is a result of the improving macro-economic picture which is increasing demand for industrial space. As a result it is likely that there will be a shortage of modern stock, particularly at sizes in excess of 20,000 sq ft. The solution for occupiers is to consider the purpose-build route or to pre-let space in schemes coming forward. For example UK Land Estates (UKLE) is about to start its Dukesway Central development on Team Valley, Gateshead.
UKLE is bringing forward plans for the 10-acre site at the former Huwood factory. The cleared 10 acre site, close to the A1 western bypass, will offer quality manufacturing accommodation as well as a mix of office and retail space. The focus of the site is the delivery of prominently located advanced manufacturing and engineering units to meet the needs of the region’s strong performing industrial sectors.
Another positive point which may come from this is that rental levels for purpose-built space will inevitably be higher than current market levels.