Huge demand for business space in the North East means the supply of available units could run out in less than three months.

According to Savills latest Big Shed Briefing, requirements for industrial and logistics space in Yorkshire and the North East continue to outstrip supply, with the availability of units over 100,000 sq ft now standing at just 2.4 million sq ft. This equates to only 0.23 years’ worth of supply based on recent levels of take-up.

Savills reports that the majority of space that is available in the region is low-quality, second-hand space, with only 22% of supply classified as Grade A. Research from the real estate advisor shows that, in the last three years, 85% of industrial take-up in the region has been for Grade A space, meaning that the larger proportion of Grade B and C stock could become obsolete through not being able to accommodate modern occupier requirements.

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Tom Asher, industrial and logistics director at Savills, Leeds said: “The chronically low levels of good quality stock has led many occupiers down the build-to-suit route to acquire space, with build-to-suit accounting for 70% of space transacted in 2022 in the region. Major developments remain key to providing occupiers with opportunities for quality manufacturing and distribution space. Otherwise we risk seeing requirements being satisfied elsewhere in other parts of the UK.”

Savills reports that take-up for Yorkshire and the North East reached 10.52 million sq ft in 2022, surpassing the long term annual average by a significant 88% in spite of the economic headwinds experienced in the second half of the year. Manufacturers were the most active sector, followed by online retailers, high street retailers and third party logistics firms, highlighting the breadth of businesses looking for space in the region.

Almost a third of all take-up (30%) took place within the North East as the region continues to grow as a location of choice for manufacturing l and logistics occupiers.

Richard Scott, industrial and logistics director at Savills Newcastle, adds: “The lack of supply across the North East has led to speculative schemes being delivered with occupiers prioritising the best quality space alongside market leading ESG credentials. This increased developer activity on sites such as Forrest Park in County Durham, which has recently gained planning consent for 1.7 million sq ft of space, is much needed to help address the chronic lack of supply.”

Privately-owned County Durham based property development company, Premcor Estates (Premcor), has announced completion of the North Durham Retail Park at Pity Me, Durham, attracting some major names.

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Situated adjacent to Durham’s largest out of town retail destination, the Arnison Centre, the new 45,000 sq ft modern retailing park has become home to leading retailers such as Home Bargains, Aldi, Iceland’s food warehouse concept and a Starbucks drive-thru.

The five-acre site, off Old Pit Lane, Pity Me and formerly known as Elddis Business Park, was acquired by Premcor director, Simon Hawkins, from Elddis Transport when it became surplus to requirements.

Simon Hawkins said: “This was the first site we acquired operating as Premcor Estates, so it was a special one for us and we are delighted with the result and the calibre of retailers we have secured as tenants."

Following completion Premcor sold the investment to an overseas fund.