Bradley Hall chief executive Neil Hart dives into the data on Tees Valley’s transforming built environment.
There’s been much news from Tees Valley in the last year, largely in support of the huge ambitions from the Combined Authority, including plans to create 25,000 jobs and add £2.8bn to the economy by 2026, with over £1.7bn of private sector investment made in 2022.
We’ve seen and supported Sunderland City Council and its transformation project, and it seems as though Tees Valley is certainly following suit. But does the data back up all of the PR and promises? We recently dove into data and analysis produced by CoStar – the leading international independent commercial property information platform- to see if progress was really being made in the area.
A range of major infrastructure projects are taking place; including Teesworks – the UK’s largest and most connected industrial zone and the heart of the Teesside Freeport, all indicate that there is a long-term dedication to transforming Tees Valley. Thanks to its central location and improving transport infrastructure, Tees Valley offers an opportunity for its occupiers to effectively service clients across the UK.
Amazon, Venator, Sabic UK and Mammoet are among the market’s largest industrial occupiers. Huge new facilities of around 1 million sq ft are also set to be built for South Korean offshore wind turbine manufacturer SeAH Wind (1.1 million sq ft) and lithium refinery Green Lithium.
Tees Advanced Manufacturing Park (TeesAMP) is perhaps the most noteworthy recent multi-tenant project. All but one of the 15 units in the 180,000 sq ft first phase were occupied in early 2023.
Amazon’s expansion provided a flagship project, which no doubt will act as a catalyst to attract surrounding occupiers. The online giant’s third fulfilment centre will open soon, taking its Tees Valley and Durham distribution footprint above 6 million sq ft. Plans for a fourth regional hub at Teesside International Airport are on hold, however, following the firm’s decision to scale back its expansion. The e-commerce giant has been drawn to the area by its road and port connections as well as comparatively affordable rents labour, and government incentives.
Vacancies in Stockton-on-Tees, Hartlepool and Darlington remain low at 0.8%, while rents have grown between 12%- 15% in each town over the past 12 months, easily exceeding the 6.6% and 5.5% average annual change over the past decade.
With multiple towns in the Tees Valley area, retail is a vital lifeline for residents and visitors. With rent prices for retail spaces falling by around 2.6% a year across the region and market pricing at around £114 per sq ft, the Tees Valley area is an affordable place to invest in shops along the towns’ high streets and out of town retail parks.
Our recent report found that office vacancies in Tees Valley are trending broadly in line with the national average, with a relative lack of speculative development helping to offset subdued occupier demand. Local authorities have set out to encourage inward investment through funding new developments and signing head leases on building to remove leasing risk for private developers. Darlington in particular looks set to benefit from its successful bid to host the HM Treasury’s Northern Economic Campus.
Stockton-on-Tees has over 3.2 million sq ft of office space, the largest submarket in the region. Middlesbrough, Darlington and Redcar & Cleveland all have over one million sq ft of office space, providing a variety of workspaces for new businesses to move into within thriving business areas.
There is about 110,000sq ft also underway in Stockton-on-Tees, the most space under construction in more than a decade. This represents a continuation of new development in the submarket, which has already seen 42,000sq ft delivered over the past three years.
Tees Valley’s main economic drivers include advanced manufacturing, offshore oil and gas and petrochemicals. It is also a significant multimodal logistics hub with access to major ports, rail freight terminals and the A1 (M), providing direct access to both Edinburgh and London. These economic drivers support the industrial property market, and activity within these industries has impacted demand for such space across the area.
While there is limited public data available for licensed and leisure transactions across the Tees Valley, the growth of the economy and in particular the increase in housebuilding, as well as new office and industrial developments, will encourage further investment into this particular sector moving forward. Our own experience has shown that there is certainly heightened interest in Tees Valley’s hospitality sector, and we are confident we will see new venues take shape in the near future.
Of course, all of the changes to the built environment, infrastructure changes and making Tess Valley a better place to create jobs will have a positive impact on the housing market. We’ve already seen areas such as Wynyard rise in popularity for those looking for modern and luxury homes. Larger housebuilding firms as well as local housebuilders have begun building or announced plans to build in the immediate future, including; Duchy Homes, Taylor Wimpey, Bellway, Port Homes, Persimmon, Charles Church, Robertson Homes, Barratt Homes and Miller Homes to name a few.
Bradley Hall is one of the businesses which are now focussing on the Tees Valley market. After over 30 years of operating a range of commercial and residential property services from eight offices across Newcastle, Northumberland and Durham and servicing the North from various branches, we made the strategic decision to launch a Tees Valley office in 2021 as part of our northern growth plans.
Our over-arching mission as a business is to work with organisations in creating a better place to live, work and play. It’s clear that Tees Valley has the same ambition, which is why we chose to set up a base in the area, working with a variety of businesses, developers, and the local authority teams to improve the built environment with the aim of helping attract businesses to the area and market homes for local people.
There’s no arguing that Tees Valley is steadily and significantly moving forward in its transformation. The numbers prove it too, its industrial sector is performing, its travel infrastructure is seeing investment, new high-quality homes are being built and good jobs are being created.
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