The North East North East industrial market overview
Danny Cramman is Director at Avison Young
As we move into Q2, whilst there are undoubt- ably challenges in global markets, there remains optimism in the North East indus- trial market says Danny Cramman, director at Avison Young.
Occupiers are facing numerous headwinds in terms of rising costs. The industrial market is however proving to be one of the most resil- ient property sectors with occupier demand remaining robust.
This means it remains an attractive sector for the investor and developer market.
Another positive for industrial and logistics property investors and developers is that the rental levels achievable across the North East for good quality product have held up well. Although growth may have slowed slightly from the peak of the market, rents are con- tinuing on an upward trajectory, we expect this to continue going forward.
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Whilst there has been some speculative devel- opment over recent years there remains a supply and demand imbalance. How tight supply is will be dependent on the size band and location of a particular occupier require- ment, but it is safe to say there are shortages in most sizes and locations across the North East region, particularly for new build and good quality product.
With this shortage of Grade A stock, the 640,000 sq ft Connect development at Citrus Group’s £400m Integra 61 mixed-use scheme is an excellent example of a strategic site with a range of unit sizes to meet a variety of occupier needs. The scheme, the largest the region has seen in over a decade and con- veniently located at J61 of the A1(M), offers a wide range of space options for occupiers. The first transaction on the Connect scheme saw Restore PLC take an 84,000 sq ft unit for document storage. There is currently strong interest in the remaining units.
Another key site in the region is Follingsby Park which was purchased by Westbrook last
COMMERCIAL PROPERTY MONTHLY 2025
year. The estate is strategically positioned adjacent to the A194 in Gateshead and offers a range of high quality industrial/warehouse units. Avison Young market the scheme jointly with HTA and there are currently high demand levels across all available size ranges at the scheme.
With interest rates set to fall further during the remainder of the year we hope to see continuing growth in occupier confidence feeding through into increased levels of take up across the whole of the North East.
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