Rental market is forecast to grow
DESPITE a lack of confidence in the national property market, there are still hot spots of activity in the region with rents holding steady in many sectors, according to the latest review from consultants GVA Lamb & Edge.
It forecast that the region would out-perform the UK average with all property rental growth remaining positive in 2009, at 0.2%, rising to 1% in 2010.
Its North East Economic Market and Property Review, which took a detailed look at regional office, retail, industrial and residential sectors, as well as the transport and property investment markets, showed that office rents rose by 0.3% year-on-year during the second quarter of 2008, with out-of-town schemes performing particularly strongly.
Although town centre retail units were taking longer to let, out-of-town parks had fared better with continued growth in major centres such as Teesside Retail Park.
In the industrial market, it said emphasis had moved away freehold demand and developers were now much more occupier focused.
Wynyard Park in Teesside and Amazon Park in Newton Aycliffe would increase the potential for big shed schemes in the south of the region, it said.
Meanwhile, rental levels have held steady with prime rents, ranging between £5.25 and £5.75 per sq ft for units up to 50,000 sq ft.
Investment across all sectors was anticipated to increase in the first and second quarters of 2009 because of a backlog of property companies and institutional funds waiting to invest in commercial property.
But it said investment activity was however only expected to rise to that achieved at the start of the millennium.
Mike Cuthbertson, Regional Senior Director at GVA Lamb and Edge said: “The property market has experienced extraordinary and unprecedented events over the last 12 months. We will continue to see the effects in the North-east market during 2009.
“However, the regional economy is more diverse and consequently more robust than it has been in previous downturns.”
