The requested news item does not exist. Please return to News
Newcastle, 28 September 2012 – Simon Hill, head of Agency at Jones Lang LaSalle’s Newcastle office, looks back at what has happened in the Big Shed Market over the last 12 months and what the future holds.
When reviewing the Big Shed market back in September 2011 one of the conclusions I reached was the fact that it was highly unlikely there would be any new units over 100,000 sq ft available to occupiers in the North East. This was as a result of the take-up of existing space in the market and the fact that no new speculative development was likely, due to the continuing difficulties in the funding market. This would mean occupiers would have to continue to look at design and build options in order to satisfy their requirements. This, I felt, would put developers possessing sites with planning permission in a strong position to help such occupiers with either their freehold or leasehold requirements. It would also create opportunities for occupiers to buy development land directly for their own development, if this was a route that appealed to them.
At the time of writing the article last year, there were very few speculatively built schemes still available over 100,000 sq ft, with only the 265,000 sq ft unit at Drum Industrial Estate, Birtley and 100,000 sq ft at Cherry Blossom Way, Washington still available.
In the last 12 months Cherry Blossom Way has been let to a Nissan supplier and this has been coupled with a number of large shed deals completing on second-hand space which have included:* Rainhill Road, Washington - 148,944 sq ft let to SNOP UK* Smiths Cargo Bull - 214,000 sq ft sold to a private individual* 262, Princes Way - 110,000 sq ft sold to Bestway Cash & Carry* ST160 Simonside Industrial Estate - 159,102 sq ft currently still available, however we understand there is strong interest and the building is likely to go under offer shortly.
As predicted last year, this space has not been replaced by speculative new build development, which has led to occupiers looking at design and build options in the region. These have included the following in the last 12 month period:* Teeslink, Wynyard Business Park - 346,000 sq ft unit which has been constructed for Clipper Logistics* Hitachi Rail Europe has announced that they will be taking a new build 450,000 sq ft shed at Amazon Park, Newton Aycliffe* Vantec Europe, a major supplier to Nissan, will be taking occupation of a 435,000 sq ft warehouse at Turbine Business Park by the end of the year.
The likelihood therefore, is that over the coming 12 months the market is expected to take a similar path with existing stock diminishing and no new speculative development taking place. This, in turn, will lead to an increase in demand for what available stock there is within the Big Shed Market, as well as occupiers who need to be within a specific location continuing to engage with developers in order to facilitate bespoke design and build sheds for their occupation.