The North East is a strategic hub which is nationally connected by both road and port. By road, the region is well connected via the A1, M62 and A19 which allow direct access to London, Birmingham, Manchester, Yorkshire and Edinburgh. The region is also home to three deep-sea ports including the Port of Tyne, the Port of Sunderland and the Port of Blyth, which are rail-connected and are of pivotal importance to the region’s logistics property market. The prospect of some ports in the region being given ‘freeport’ status has the potential to significantly alter the demand profile for space in the region, as does decisions by companies such as Nissan on the location of their manufacturing facilities, and government decisions on environmental targets.
The region proved a favourite of Amazon in 2020, which committed to develop four facilities in Hull, Stockton and Gateshead totalling 2.7m sq ft. Land is more affordable in the region than the average, but the choice on offer to occupiers is limited to secondhand stock and following a dearth of speculative development over the last 5 years, the availability rate dropped further to an all-time low of 0.8%. Prime rents have increased off the back of pre-lets, and the outlook is positive, albeit limited to some extent by the weak speculative development pipeline. There is land for future development – particularly at Follingsby Max and Symmetry Park in Darlington, but for now conditions are restrictive for occupiers and rents are forecast to rise by an above average 2.3% over the next 3 years.
