Demand for commercial property in the North-East has become so critical that even a 200,000sq ft development underway on the region’s biggest industrial estate will do little to ease the pressure, a senior agent has claimed.
After four years of planning, work is about to start on Dukesway Central, a UK Land Estates’ project in the heart of the sprawling Team Valley Trading Estate at Gateshead. But warns Danny Cramman, head of industrial agency at GVA in Newcastle, the addition of a single warehousing unit on the 700-acre site is barely enough.
“Growing market confidence and high levels of take-up have created an acute shortage of large commercial space on the Team Valley,” he says. “Action is needed sooner rather than later to bring forward schemes to address this worsening situation.
“Part of the estate’s 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,” adds Cramman.
Another regional property expert has even suggested that as much as an extra one-million square feet will be needed within the next decade to fill the gap.
“Team Valley remains a very popular location for all business sectors, given its strong transport links, mixed-use and business-to-business activity,” explains Naylors Chartered Surveyors’ Keith Stewart.
“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 on the estate for seven years the void rate is at its lowest for quite some time,” he said, while adding that in light of this demand “it is likely that we will see some rental growth over the coming year”.
In addition to the Land Estates’ project a number of other schemes are in various stages of progress, including new office and warehousing developments on Kingsway and Eighth Avenue which will replace old engineering works. Talks are also underway with several companies wanting to move to design and build premises on the Team Valley.
“Developers and agents alike are reporting strong levels of take-up on the estate,” added Danny Crammam. “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.”
Established in 1936 by central Government to alleviate the depression and high unemployment figures, the Team Valley Trading Estate now houses more than 700 companies and provides work for 20,000 people. In 1981 the southern half of the estate, including a vast track of undeveloped land, was designated an enterprise zone. Today, UK Land Estates owns 650 freehold acres of the 700 acres estate.
The estate has also diversified with the establishment of Retail World, near its eastern entrance, and which has attracted a number of major retail brands including Homesbase, Sports Direct and Currys PC World.
