Columnist

Connecting Supply With Demand At Integra 61, Durham

Avison Young, joint agents on the largest speculative scheme in the North East, Connect at Integra 61, report that the North East Industrial and Logistics Market is performing well.

Danny Cramman, Director, explains; “Recent research by CoStar shows that the region is currently experiencing extremely low vacancy rates in the sector. Demand has outweighed supply in all but one of the last seven years with vacancies down as low as 2% in some areas, the lowest for 15 years. Whilst the amount of speculative space being delivered in 2023 will go some way to easing this pressure, it will not cater fully for the level of demand for new build high quality space.

“Take up continues to be spread across a number of users. Logistics, manufacturing and automotive tenants remain very active. Envision are now nearing completion of their EV battery facility in Washington delivering the region’s first Gigafactory. This is not only an important step for the region’s manufacturing sector, creating high quality jobs, it will also help generate further enquiries for space from their suppliers. Onshoring of supply chains following Brexit is likely to see demand for space increase.

“One of the effects of this high demand and limited supply has been strong rental growth. Record rents are being achieved across all size ranges with new build and modern stock performing particularly well. This makes the sector attractive to the investor market. It is also worth noting that whilst rents in the sector are rising, the North East still represents extremely good value for occupiers when compared to rental levels in other areas. According to the CoStar research, the region is more affordable for occupiers than three-quarters of the UK’s 55 industrial markets.

“Much of the region’s stock, whilst still functional is aging in nature. Nearly three quarters of the industrial and warehouse space, some 110 million sq ft, was built before the turn of the century. With many occupiers increasingly focused on operating in buildings which meet their Environmental and Social Governance aims, the delivery of high quality new build speculative space is increasingly important.

“This is where schemes such as Connect and the wider Integra 61 offering being delivered by Citrus really come into play. Five units are currently under construction creating 640,000 sq ft of modern high bay industrial/warehouse space. The units will be ready for occupation this summer. Sizes range from 43,000 sq ft up to the largest speculative unit constructed in the region of 298,000 sq ft. The units are being delivered to a high standard, achieving A standard EPC ratings which will future proof them against forthcoming legislation which will tighten the requirements buildings need to meet for commercial occupiers.

“We are increasingly seeing occupiers look to drive value through energy efficiency which these buildings are well placed to cater for.”

Agents on Integra 61 are Avison Young and Colliers. www.integra61.co.uk

Agents on Connect are Avison Young, CBRE and Colliers. www.connectintegra61.co.uk

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →