Port development will have positive impact on market

Jul 16 2008 by Graeme King, The Journal

The next 12 months will be an interesting time for the big shed market across the North East, says Simon Hill

A NUMBER of major deals have been completed recently in the big shed market including Cumbrian Seafood’s acquisition of 255,000sq ft of high bay modern warehouse accommodation at Foxcover, Seaham and the recent transaction to the Co-op who took a further 270,000 sq ft at Drum Park, Birtley.

While there are a number of proposals for large scale warehouse development none of these are under construction.

One of the underlying reasons why there has not been a continued speculatively developed pipeline of large sheds throughout the North East has been the Government’s recent introduction of payable rates on vacant industrial properties.

However with PD Ports receiving formal planning approval for its northern gateway container terminal at Teesport there is likely to be a substantial growth in the need for warehousing throughout the North East with the news securing a major warehouse development for Asda with Tesco also taking a further 1,000,000 sq ft within the port.

While there are still opportunities for occupiers within the port, there will be spin-offs for developers from occupiers wanting to be close to the ports but not specifically needing to be within the boundaries of the port itself. It will also be interesting to see if this will once again lead to an increase in speculative big shed development.

Simon Hill is a partner at King Sturge in Newcastle.