ACCORDING to one of the area’s leading commercial property agents, increased take up and demand could see rents for smaller industrial units in Teesside top £5psf in the next 12 months.

Stephen Brown, senior partner at Dodds Brown LLP, an independent firm of chartered surveyors, says the lack of availability of smaller quality industrial stock in Teesside is already putting upwards pressure on rents which are presently moving up towards £4.50psf.

“Despite the drop in the oil price, in the past six months we have experienced increased take up and demand for industrial units across Teesside and throughout the Tees Valley, as local businesses look to take advantage of improving economic conditions by expanding and moving into larger premises,” said Stephen.

“However, with 90 per cent of units already let at Riverside Park, one of the last available major industrial estates offering quality accommodation on Teesside, we have a waiting list of prospective tenants looking for units of a specific size, whose requirements we cannot fulfil at present.

With rents for industrial units of up to 3,000sq.ft soon to be touching £4.50psf, the £5psf barrier looks set to be broken sometime next year.”

Attracted by low interest rates and the increasing willingness of the banks to lend, some businesses with cash in the bank are looking to avoid increasing rents by acquiring the freeholds of industrial properties. Due to increasing shortage of properties, freehold prices are also rising.

Stephen, who has worked in commercial property on Teesside for more than 30 years, continues: “We are working closely with public sector bodies, developers and landlords to bring new development opportunities, and new and refurbished properties to the market, but with a limited number of shovel-ready development sites in the area, upwards rental pressure on industrial units of all sizes will only increase.”

Dodds Brown, which acts as agent for properties on Riverside Park, Middlesbrough, and for other industrial developments across the Tees Valley, can be contacted on 01642 244130 or by visiting doddsbrown.co.uk