Major investments in the region are boosting demand for prime office space in central Newcastle and Sunderland, according to a partner at property consultancy Naylors Gavin Black, who spoke to Insider about its year of “strong demand”.
During 2022, the business experienced an uptick in demand across its teams, including office, industrial, investment, building consultancy and property management.
However, Chris Donabie explained that activity in the North East investment market has been “hot and cold”, with the September mini budget impacting transactions, and a number of headwinds including inflation affecting the market.
“Landlords and occupiers need assistance with management of rising utility costs, whilst the ESG agenda is driving landlords and occupiers to consider how their buildings function and particularly where energy performance can be improved”, said Donabie.
He added: “We are seeing an increased focus on environment, social, and governance (ESG initiatives) which is driving more demand in our property management and building consultancy. Energy performance, related to rising energy costs, will continue to be a hot topic.”
Despite a number of challenges, Donabie explained that office space in Newcastle and Sunderland is now at a premium.
He said: “The industrial market across the region will still be active, with pent up demand still there for good quality buildings, of which very few are available.”
Moving into 2023, Naylors Gavin Black is anticipating solid demand although a “disconnect on pricing between some sellers and buyers” may result in a “slower start”.
“There is no doubt that it is going to be a turbulent year with so much going on in the global economy from inflationary pressures, recessions and interest rates that are much higher than the last decade”, said Donabie.
“A key aim for us is to retain our position as leading industrial office and investment agents. We are also actively recruiting to support the growth of our property management and building consultancy teams, which are a rapidly expanding area of business for us and will continue to grow.”