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How public sector cuts are impacting on North East developments

THE economic climate over the last four years has certainly constrained new development activity within market towns as a result of reduced occupier requirements and the need to let or sell existing available space, built speculatively when better market conditions appertained.

THE economic climate over the last four years has certainly constrained new development activity within market towns as a result of reduced occupier requirements and the need to let or sell existing available space, built speculatively when better market conditions appertained.

GVA research has identified that the larger lettings in recent years were generally to public sector, quasi public sector bodies or housing associations. The severe public sector spending cuts have undoubtedly had an impact on further take-up of existing space.

Northumberland is a typical rural county with an extensive rural hinterland served by the “market towns” including Berwick upon Tweed, Alnwick, Morpeth and Hexham as major service, commercial and retail centres. The county and former district councils have sought to encourage the establishment of new offices in these principal towns to stem rural depopulation and accommodate new business growth.

In Berwick, Gladman Developments completed 33,000sq ft of office accommodation at the Ramparts Business Park on the northern edge of the town alongside 15,000sq ft of industrial space now occupied by local firm Farm to Freeze. The Berwick Housing Association occupied a 6,000 sq ft office unit and the investment was sold to a local investor. Two of the smaller units have been let to ISM Marketing and Gladman is offering all-inclusive flexible deals on buildings for two people upwards by way of licence agreements. Development plots are also available and being offered for sale by joint agents GVA and Green Commercial.

The edge of town provision at Alnwick has been developed at Cawledge Business Park, adjacent to the A1 trunk road by City and Northern in association with Northumberland Estates. The scheme comprising 12 self-contained units proved slow to let up in the recent economic climate but the agents do report an improving level of occupier interest in the last few months. Nine of the units have been let with a further unit under offer. The park now has much improved amenities nearby, including the Hog’s Head Inn and a petrol filling station which incorporates a Spar store. Joint letting agents are George F White and Jones Lang LaSalle.

Morpeth is the established administrative centre for Northumberland and recently reinforced by the replacement of the district councils by a single unitary council. The town has been highlighted as having a high proportion of public sector employees and also acts as a dormitory with many residents commuting to the Tyneside conurbation.

Within the town centre new office space has been provided at a first floor level within the Sanderson Arcade retail scheme where the larger floor plates have been let to Castle Morpeth Housing, Handelsbanken and Energie Fitness for Women. Three smaller suites remain available for letting. Out-of-town provision is also available to the east of Morpeth at Longhirst Hall.

Hexham is the established retail and service centre for the south and western rural areas with the majority of office space within the historic town centre and where several of the former Tynedale Council offices are currently being marketed. The edge of town private sector development at Beaufront Park, adjacent to the A69 trunk road offers contemporary offices ranging from 1,000 sq ft to 12,500sq ft through agents Storeys Edward Symonns.

Given funding difficulties for new speculative office schemes there is likely to be little or no new office development within the market towns until the existing space is taken up and/or market conditions improve. The impact of public sector cuts will also influence future development momentum given that three of the largest lettings in recent years were to the former district council housing authorities - such requirements may not however be repeated within the market towns of Northumberland.

:: Tony Wordsworth, director, national markets - offices, GVA

 

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