The North East's industrial sector is growing - but is this causing problems for expanding firms?
The region’s industrial sector has seen strong growth so far this year, with more firms requiring larger premises as a result of expansion.
Richard Rafique, associate director at Bradley Hall, said manufacturers in particular have performed well and many companies in this sector have been taking up occupancy in industrial premises based in strategically well-placed locations around the region.
Activity in this sector is helping to maintain economic growth and shows little sign of abating.
Mr Rafique said: “However, there are challenges for the market to overcome. There is a shortfall of prime stock with many of the larger properties over 10,000 sq ft becoming obsolete.
“This problem will become even more acute if companies continue to trade up to bigger premises – and this trend is likely to continue as long as the economy remains robust.
“For prime units the market is seeing a change, with rents hardening and fewer incentives being offered. Meanwhile, capital values remain steady due to lack of supply.”
Knight Frank is equally upbeat, saying that take-up of large industrial units has been a feature of the market this year with over 1.2m sqft let resulting in a lack of large-scale units.
Mark Proudlock, partner of industrial agency at Knight Frank, said the most recent letting has been a 60,000 sq ft warehouse on UK Land Estates’ Tyne Tunnel Estate which has just been acquired by Vantec, an important Nissan supplier, on a short term basis.
“This demonstrates how the improved traffic flow through the dualled Tyne Tunnel has opened up North Tyneside as a location for Nissan suppliers but it also shows the lack of large-scale warehousing immediately available closer to Nissan,” said Mr Proudlock.
“So bringing back supply to the market is important and there are schemes which can alleviate the situation.”