WASHINGTON and the wider County Durham area continue to be the region’s hot-spots for industrial and logistics activity.
Of the 11 deals in excess of 50,000sq ft completed in the last year, three were in Washington and five were in County Durham locations such as Durham, Peterlee and Darlington. The largest was Vantec Europe’s 421,000sq ft shed next to Nissan, the smallest Mission Foods’ 61,710sq ft facility at Seaham.
The reason why Washington continues to be a focus for the manufacturing and logistics/distribution sectors is down to two key factors – it has or rather had sites and it has excellent communications with both the A19 and A1M giving north/south communications, both of them just a few minutes from each other.
This provides access to regional markets as well as market north into Scotland and south to the M62 corridor and beyond. Clearly access to ports on the Tyne, Wear, Tees and the Humber are additional, important, benefits.
Washington was granted New Town status in 1964 and while with the benefit of hindsight 1960s architecture was something to pass by fairly quickly, nearly 50 years later the town has matured and, being a centre of manufacturing as a result of New Town status, older buildings have now been levelled and redeveloped to provide some first-class space.
That said, the supply of sites is an issue especially as the size of some requirements has increased significantly of late – 100,000sq ft, 150,000sq ft and 420,000sq ft and of course such large buildings consume a great deal of land. With the Nissan plant being one of the key drivers of demand in the town, and suppliers to the plant needing to be as close as possible (ideally within a 5km radius), the shortage of land supply prompts a call for more sites to be released.
Meanwhile the opening of the second Tyne Tunnel has widened the search area for sites to include north of the Tyne with areas close to the Tyne Tunnel attracting interest because of the much improved drive times.
As the charges for cars and now particularly HGVs has just increased again this may offset some of the drive time advantages with financial penalties if there are frequent journeys through the tunnel.
Washington will continue to be a very desirable location but it is clear that unless a significant new employment site is released in the short-term, Washington will be unable to meet the requirements of major manufacturers and logistics operators keen to set up or expand in the town.
:: Simon Haggie is industrial partner at Knight Frank
Washington thrives on its location
THE take up of both industrial buildings and land in Washington over recent years has been quite phenomenal despite the prevailing economic conditions which have curtailed both development and take up of space throughout the region.
Washington benefits from its location at the centre of a triangle between Newcastle, Sunderland and Durham. It also benefits from main trunk roads on its boundaries and is traversed by the main road link between the A1 and A19 corridors, namely the A1231 dual carriageway.
Undoubtedly the success of attracting Nissan has been the major factor contributing to the economy in the town and the immediate sub-region.
The availability of large serviced industrial estates has attracted companies to the town and the "Nissan effect" has seen strong demand from suppliers to secure accommodation close to the main production plant.
GVA along with other property agents feel that there is now a shortage of industrial land to accommodate both local expansion and inward investment from outside the region. Only a sporadic supply chain of smaller sites remain which may stimulate further new industrial land allocations by the planning authority.
Washington, then in the old County Durham, was designated a new town in 1964. It joined the new county of Tyne and Wear in 1974, being absorbed into Sunderland metropolitan borough which now enjoys city status.
Washington was built on industry following upon the demise of strategic industries such as coal mining.
The announcement of Enterprise Zone status at Turbine Business Park immediately to the south of Nissan alongside the A1231 has attracted Vantec Europe, a main supplier to Nissan who occupy a 420,000 sq ft building on the park.
Follingsby Park, whilst arguably outside the Sunderland city boundaries being located within Gateshead borough does however sit within the "Washington Triangle" where GVA and their joint agents DTZ secured in excess of 200,000 sq ft of new lettings in 2012 for their client F&C Reit.
Washington has certainly capitalised on its location as is evidenced by the phenomenal level of recent new development activity in line with the objectives of the original new town. It remains to be seen whether further industrial land can be released to accommodate future economic growth.
:: Danny Cramman, national markets - industrial, GVA
Town is set to build on its strengths
WASHINGTON is strategically placed for both manufacturing and logistics in the region. Washington’s highly accessible location, excellent infrastructure, skilled workforce and availability of large-scale industrial space have placed it as one of the UK’s most competitive business locations.
The Nissan effect has, of course, played a vital role in the success of Washington, as many of its suppliers have secured accommodation close to the company’s main production plant. The take-up of space in the town has been significant and it boasts a variety of quality occupiers.
Washington can also offer sizeable plots of serviced development land suitable for large-scale developments. It is home to Barmston Development’s Turbine Business Park where there are 20 acres of prime development land ready to take forward new schemes. The business park, which is home to the newly-completed 422,000sq ft Vantec distribution facility, is now fully serviced and has received outline planning permission for 715,000sq ft of employment space including a pub, hotel, retail, offices, industrial/warehousing and leisure use.
It looks like development activity in Washington is set to increase in 2013 as it capitalises on its strengths.
:: Simon Hill is head of agency at Jones Lang LaSalle’s Newcastle office
Main demand for industrial space
WITH the road links on the A1 to the North and South, and also the ferry links at South Shields and Tynemouth, Washington’s main property market is for industrial property.
Industrial rents range from £2 to £7 per sq ft depending on size and specification. Smaller units command higher rents, as do those with better specifications, for example, yard space, crane space, eve height and heating.
The core availability of industrial units range from 1,000 sq ft to 5,000 sq ft. Bentall Business Park holds the stock for larger units, sizes here can range from 11,000 sq ft to 70,000 sq ft. Virtually all of the units available are second-hand. This is the most active commercial market within the Washington area. A lot of lettings of second-hand industrial space that vary between 1,000 sq ft and 4,000 sq ft have happened since the crash in 2007/08. Headline rents vary between £2 and £5 per sq ft.
The main demand for industrial properties is largely on Washington’s industrial estates, the main ones being Pattinson Industrial Estate and Crowthler Industrial Estate. There have been two standout deals in the past years in Washington, these being the letting of 149,000 sq ft at Stephenson Industrial Estate and also 100,000 sq ft at Cherry Blossom Way.
All of the offices currently on the market in Washington are either second-hand or refurbished and are leasehold rather than freehold.
Asking rents range from £3 to £10 per sq ft, the most expensive being £10 per sq ft at Bede House and Cuthbert House on Tower Road.
Availability ranges from 500 sq ft to a total of 47,000 sq ft available at Durham House on the Washington Highway. Rents achieved range from £6 to £10 per sq ft and most have been less than 3,350 sq ft.
Nearly all of the recent retail deals have been at The Galleries Shopping Centre. These are small booth-like units ranging from 150 to 600 sq ft. These generally command approximately £50 per sq ft, depending on their zoning and the nature of the units.
On Front Street, there has been one recent deal involving a 1,000 sq ft store, at a headline rent of £14.50 per sq ft. Few retail investments are being sold in the area.
Most of the available retail units are based on either Heworth Road, Front Street or in the Galleries Shopping centre and are in the 1,000 sq ft to 2,000 sq ft range. Smaller units between 500 sq ft and 2,000 sq ft usually demand between £10 per sq ft and £16 per sq ft, but the market fluctuates tremendously between prominent and secondary retail pitches. Three larger out-of-town units are available at Peel retail park. These range from 7000 sq ft to 27,000 sq ft.
:: Neil Osborne of Storeys Edward Symmons