THE concerns over growth in the UK's economy, the continuing Eurozone crisis, a shortage of funding for commercial property and global issues over our economic fortunes will continue through 2012.

So this is a bleak but honest view which begs the question about the direction of the commercial property sector. Looking at the three main elements, retail, industrial and offices, the region is not at risk through over-exposure.

For the last three years of recessionary or near-recessionary conditions there has been only one significant retail development, Eldon Square South, being developed and fully let with some outstanding retail space that befits the centre of Newcastle.

In the offices sector only Wellbar Central, Newcastle city centre, has been completed and this has attracted the 36,000 sq ft BSkyB letting. So taking a city centre perspective there is very little supply of Grade A space and limited prospects of new development.

In general the mix of availability across city centre, edge of centre and out-of-town represents a range of locations and space. A willingness by landlords to engage in flexible terms with other inducements makes this a good time for occupiers to review their space requirements with the North East being strongly competitive on an overall cost basis.

There is demand in the market place but not at historic levels and I anticipate occupiers continuing to be active through 2012 taking account of a willingness by all to be flexible.

The industrial sector includes logistics and distribution and a major focus is the anticipated arrival of Hitachi Rail Europe to Newton Aycliffe. This 460,000 sq ft project is expected to be given Government go-ahead later in spring 2012.

The effect on the supply chain will be significant, perhaps comparable to another Nissan arriving. The Hitachi project underlines the strength of the region’s infrastructure. There is rail access to the Amazon Park site, there are road and rail links to Teesport, there will soon be several miles of six-lane A1M speeding up access to the M62 corridor and beyond and the dualled Tyne Tunnel is now a reality.

I believe the limited exposure to the sectors and the improving locational advantages of coming to the North East means that we are at a more stable level that can only improve in time when the availability of funding returns.

The last few years has seen a radically changing skyline in central Newcastle from the Newcastle University Business School, the Sandman Hotel, Time Central and Wellbar Central west of the city centre to the University of Northumbria’s redevelopment east of the city centre.

These are important developments that considerably improve the offer and presentation of the region’s capital.

Several unknowns come into play during 2012. Budget reductions throughout local authorities and the disappearance of One North East together with continuing Government spending cuts and the ever present pressure on fuel costs has removed much spending power at street level. This brings me back to my first point – there is little doubt concerns about our national well-being will continue.

:: Gavin Black is partner at Gavin Black Associates