Sanderson Weatherall associate partner Chris Dent surveys an ever-changing landscape for the commercial property sector…
Just over a year ago, pre the Covid-19 pandemic, we wrote a piece of editorial that focused on the strength in the commercial property market in the North-East and within Teesside in particular.
Just a couple of weeks after publishing, we were amid one of the most economically uncertain times in living memory, and for a short period the commercial property market went into standstill.
Despite this inevitable period of uncertainty, it has been great to see the Teesside property market displaying its resilience – and no one sector has displayed this more than the industrial market.
The industrial and logistics market has long been viewed by investors as less favourable in comparison to other core commercial property market sectors such as office and retail.
However, with changing demographics and the continued growth of ecommerce, the UK industrial logistics sector has experienced strong levels of growth consistently over the past five years. Our agency team has witnessed this growth first-hand at both an occupier and an investment level, with demand largely outstripping supply across all major UK regions.
As a result of the Covid-19 pandemic the industrial and logistics market has continued to flourish. As well as the aforementioned demographic and supply/demand factors, there has been the addition of many office retail and leisure properties being closed.
It’s been widely reported the online sales have doubled in the space of nine months from March 2020, with e-commerce and delivery companies accounting for nearly 40 per cent of annual take up.
This “perfect storm” of conditions culminated in the strongest Q4 ever recorded for the industrial sector, with more than 14.3m sq ft and an annual take up of 50.4m sq ft across the UK.
The North-East has followed this national trend and the industrial property sector has outperformed other sectors in recent years, with a greater evidence of transactions on both the sales and letting front.
There’s no doubt that location remains a key factor in demand for industrial units, with the most popular industrial states benefiting from close proximity to good communication links.
The preferred location for such sites within the North-East continues to be alongside the A1 and A19 corridors.
Over the past 12 months we’ve brought a raft of new instructions to market and, as mentioned previously, we’re experiencing unprecedented levels of demand, so the majority of these have been sold or let within months of coming to market.
We’ve also been involved in Station Place at Newton Aycliffe since the scheme’s inception, and with work starting on site in March, it’s set to provide over 50,000 sq ft of much-needed new industrial space for the region.