Tees ‘on the turn’

Mar 20 2008 By Sue Scott, Evening Gazette

THE SMALLEST, but strategically most important regeneration project in Teesside will create the first big-scale freight distribution centre in the North-east and boost cargo through Durham Tees Valley Airport.

Officially launching the 250-acre building programme, which will begin this summer to the south of the terminal, regeneration boss Joe Docherty said it signalled that Teesside was “on the turn”.

The £110m first phase of the Skylink International Business Park brings the total private investment flooding into the area’s five regeneration projects to nearly £1bn. But Skylink is by far the most commercially significant.

Roger Wheeldon, senior development surveyor for developers and airport operators Peel Holdings, said experience elsewhere had shown that “the combination of an international airport and a business park is a winning one... the company sees its airports as magnets for business developments”.

Units up to 500,000 sq ft would be built speculatively, he said, but the company was keen to source larger scale tenants for anything up to 1m sq ft bespoke units - similar to the retail shed planned by PD Ports for its second major retail tenant.

Notwithstanding changes in rates relief for commercial property, which will see charges levied for the first time on empty buildings, Mr Wheeldon said the company would press ahead with unreserved plots.

“In our experience the time taken to build a distribution shed is too long. What we find in the logistics industry now is that a lot of those companies who are customer led want buildings immediately - lead times are getting shorter and shorter.

“It’s unusual to offer sheds up to 1m sq ft, but this site is an opportunity to do that.”

He said the North-east was under-stocked with large scale distribution facilities and developments at Teesport, including the recent go ahead for a deep sea container terminal which will see freight traffic increase substantially, would see demand increase.

With tougher rules on driver times, the pressure to reduce road miles and increased costs, he said logistics firms were looking for opportunities to move into the North-east.

Airport md Hugh Lang said the park, which will have airside access, would help it reach a 2015 target to take cargo through the terminal from 1,000t pa to 26,000t.

It also complemented plans to develop airside facilities, including maintenance hangers and passenger handling improvements.

“The whole North-east is under-serviced in terms of airfreight,” said Mr Lang.

“Newcastle is only doing 2,000t pa. Most of it is consolidated freight from Heathrow or London Stansted. We see an increase in airfreight moving out of London due to capacity problems. We predict airlines will move out of London airports to the regions and we have to add more value than just being a point of discharge for passengers.”

He said Tees Valley was ideally placed for the development of a large-scale logistics industry and improvements to the Long Newton interchange, due to be completed this summer, would make Skylink easily accessible from all points north and south.

“We already have Argus distribution in Darlington and Asda at Teesside. We are convinced that the Tees Valley is well placed as far as logistics is concerned ,” he added.