By Nicola Tiffen, Partner and Head of the specialist Commercial Property Team at Hay & Kilner
The variety of great places to visit across the North East is matched by the range of different locations and spaces that its commercial property sector offers – and after a busy first quarter of the year, we’re looking forward to seeing activity levels being sustained right through 2023.
The worst aspects of the pandemic may be beginning to slowly recede from public consciousness, but the economic impacts are still very much in full effect – and that’s especially true within the commercial property sector.
For a great many people, the last three years have seen an accelerated shift to a hybrid model of splitting their working week between their homes and their offices.
Indeed, it’s a model that Hay & Kilner has adopted itself since our move last year into the fifth floor of The Lumen building on St James’ Boulevard within the landmark Newcastle Helix hybrid city quarter, and it’s working well for both the members of our team and the wider firm. This change has seen the focus in the North East office space market very much turn towards quality.
Demand is still strong for the right type of high-spec office premises, our team is working on a range of interesting office projects right across the region, and from our own lofty point of view, we’re seeing high occupation rates of the impressive new buildings that have been developed across the totally transformed corner of Newcastle in which we’re now based.
The number of high-quality businesses from outside the region that are choosing to establish themselves in the North East, including games developer Creative Assembly, global technology and management consultancy Credera and multinational defence and security firm Leonardo, is also extremely encouraging.
And from a retail point of view, the £9.3m acquisition of Gosforth Shopping Centre by regional real estate firm Monument Real Estate at the end of last year, on which we acted as advisors to the purchasers, expresses great confidence in the future prospects of the sector, as well as in the wider local area.
The industrial sector has seen sustained demand so far this year, with many of the businesses that we’re working with looking for larger premises as part of their plans for developing new products and services that may have been put on hold for the last couple of years.
Securing these new leases, and the funding that can be needed to bring them into reach, is requiring management teams to present a strong case around their future prospects to give their potential landlords certainty that they would be a reliable tenant.
Gathering as much management information as possible before entering into these discussions is crucial for businesses that want to give themselves the best chance of securing the property agreements they’re looking for.
An additional factor in this is the general increase in post-pandemic corporate insolvencies, which is leading to property deals arising in the aftermath of business administrations and bankruptcies.
In the present economic situation, we’re expecting such opportunities to sadly become more frequent and businesses that put themselves in a position to move quickly as soon as they come up are likely to be the ones to benefit.
As far as specific industries are concerned, there’s no doubt that it can be more difficult to finalise property deals in sectors that have been especially hard hit over the last three years, such as leisure and hospitality, but that doesn’t mean that, with the right planning and approach, they can’t be done.
Our work with Newcastle-headquartered leisure operator The Apartment Group on the acquisition of the Grade II listed Croft Hotel at Croft-on-Tees shows how a deal based around a clear commercial strategy can be successfully secured and we’re excited see how our client’s refurbishment plans for this historic property are revealed in the summer.
Whatever the economic climate, the North East offers a huge array of options for businesses of any size in any sector – and having the right advisors on your side could help you find the ideal base from which to realise your growth and wealth creation ambitions.