Newcastle cushioned from difficulties

Aug 17 2005 By Paul Nicholson, The Journal

Britain's regional capitals, which include Newcastle, could be cushioned from potentially negative features of the economy, which currently include falling retail sales, declining house prices and a shortage of appropriate supply in most commercial property sectors.

So why should cities such as Newcastle have a comparatively bright future over the next few years when lesser centres of population may not perform as well?

There are several reasons. The reversal in the decline of city-centre population is an important factor as it is bringing back a natural vitality - more people, more jobs and more disposable income. Regional capitals are larger and the impact of "city living" more noticeable. This reversal has made an impression on the city's urban renaissance. Further, the process of regeneration is now protected by government planning policies such as PPS6 so the cycle of regeneration is viewed as lasting and long term.

Despite concerns from retailers, for example, at falling sales, regional capitals per se are large with significant catchments.

Any improvement in trading will be immediate, so there is a constant demand for representation. Set against a shortage of supply in offices and retail space, rental performance is more assured. This in turn drives the investment market.

Cities such as Newcastle have been able to support large commercial development as seen at the Quayside or along St James' Boulevard, where mixed-use developments have been extremely successful.

This activity creates a momentum which, if added to the benefits of being a regional capital - that is the presence of a mature and self-supporting business and professional community and the benefits of excellent communications - means a certainty of well being into the future.

* Paul Nicholson is director of agency at Atisreal.