A buoyant six months for Knight Frank Newcastle has seen the agent take the top spot for the most industrial space transacted in the North East during the second half of 2017, in deals worth over £2.6m.
A league table just released shows that Knight Frank’s Logistics and Industrial team handled the most space of any agent in the region – transacting a quarter (462,280 sq ft) of the total 1, 841,391 square footage.
The largest deal was the sale of the former Visage Clothing warehouse in Washington comprising 175,000 sq ft, which was sold by Knight Frank. Other deals include a 57,000 sq ft new-build unit at Tyne Tunnel Industrial Estate let to Pryme Group and a 69,000 sq ft development at Benfield Business Park in Newcastle let to Card Tricks Ltd.
Take-up of units over 50,000 sq ft across the North East totalled 295,122 sq ft in the second half of 2017. While this is less than half the volume of take-up in the first half of the year, it brings the total for the whole of 2017 (for units over 50,000 sq. ft) to 1.1m sq ft – which is similar to the previous year.
Simon Haggie, partner, Knight Frank, comments: “For me, the letting of UK Land’s new build 57,000 sq ft unit on Tyne Tunnel Trading Estate was the stand-out deal. The unit was let during construction at a rent of £6.00 per sq ft. The speed at which it went under offer in the first month after construction began should give encouragement to other developers sitting on planning permission for larger units.
“The region continues to suffer from a lack of good quality industrial stock. The statistics show that there is around 4.2m square feet currently available, however only 485,000 sq ft of that space could be considered modern.
“Significantly, there is no new stock above 20,000 sq ft available, although Hellens are on site with a development of two units of 25,000 sq ft and 30,000 sq ft on the Monkton Business Park, Hebburn, which completes within the next few months.
“Demand is good for larger units between 50,000 sq ft and 150,000 sq ft, which is partly being fuelled by Nissan’s launch of a new model in 2020. A number of part suppliers are currently tendering for contracts from Nissan and if successful will need to be in premises by Q2 2019 in order to trial initial production runs. Interestingly, in anticipation of Brexit, Nissan is pulling most, if not all, of its suppliers into the region to avoid potential duties on its parts post Brexit.
“In terms of land supply, the International Advanced Manufacturing Park (IAMP) proposed for land north of Nissan has cleared most of the planning hurdles to release it from the greenbelt and Henry Boot has been chosen as the preferred developer by Sunderland and South Tyneside Councils. There remain some questions on the land ownership and in particular, a key part of the site is in the hands of a rival developer intent on bringing forward their own proposals. This will not necessarily conflict with the Council’s ambitions but it may divert control away from them,” said Simon.