By Neil Hart, Group Managing Director at Bradley Hall Chartered Surveyors and Estate Agents.
It’s daunting to think that we’re three quarters of the way through 2019 already, however, it is safe to say that despite prolonged uncertainty the North East economy continues to perform well.
Regardless of economic hurdles, business in the North East has managed to continue to thrive and adapt, remaining largely unscathed by the looming Brexit deadline. With the current climate likened to the Great Depression, large corporations have seemingly suffered the most, while North East SMEs continue to operate with confidence.
Pessimistic press focussing on larger retailers continues, however innovative solutions have helped to keep our region’s retail sector afloat. Quirky destinations such as STACK Newcastle have provided opportunities for smaller retailers and hospitality outlets to occupy space in the vibrant Newcastle City Centre, with this success planned to be replicated at the popular Sunderland seafront area of Seaburn.
Further north, Northumberland continues to thrive as a popular tourist destination. The county is currently the reigning champion of the British Travel Awards ‘Best UK Holiday Destination’. After four years of being runner-up, Northumberland edged out Cornwall and the Peak District to take the title of ‘Best UK Holiday County/Destination of the Year’.
Northumberland attracts Brits and visitors from further afield, and thanks to this, its tourism sector is 11.8% of the county’s economy and brings £665m to the area. Northumberland has an abundance of attractions including its famous beaches, stunning scenery and historic castles.
Newcastle has recently been hailed as one of the fastest growing cities in the UK. I believe the combination of affordable living, alongside accessibility and connectivity to key employment areas have been strong contributing factors in the region’s success. Newcastle, Gateshead and Sunderland currently provide focal areas of employment, with almost 426,000 people working within these areas – with a high proportion of those travelling from outside of the area for work.
Newcastle and Gateshead are areas which are set to continue to attract those who wish to live, work and socialise in the area, with the city’s population predicted to grow by 6% in the period between 2016-2030, reaching 310,000 people. The number of residents within the wider city region is expected to reach 2.75 million by 2030. This growth, together with earnings increasing by 26% in the ten years between 2007 and 2017, speaks volumes regarding the potential and positivity for our region.
The potential for the future of Newcastle, and subsequently the wider North East, is further supported by the continued investment into our regions various sectors – most significantly the tech industry. Tech start-ups in the city increased by 154% from 2011 to 2016, and access to finance is now available with the recent launch of the £120 million JEREMIE2 Fund, which aims to create 2,500 jobs and support 600 businesses. In addition, last year, a £27 million venture capital fund was devoted to Newcastle-based companies.
Q2 brought a £120m forward-funding arrangement for phase one of the Milburngate scheme in Durham, a mixed-use development of residential, leisure and possible office space. This large investment is the third of its kind in the last year, with two other sizeable investments of £100m being pledged to our region since Q2 2018.
The North of Tyne devolution deal is also an encouraging campaign which is set to increase investment by £600 million over the next 30 years.
Despite overhanging economic uncertainty, the North East continues to be resilient and this positive outlook is testament to our strong sectors and the region’s ability to adapt and continue despite external impacting factors.
We know first-hand that several industries in the North East continue to be buoyant as we continue to represent loyal and new clients alike. The office market in the City Centre especially remains robust, with a total of 21 lettings agreed within the second quarter of the year, whilst out of town lettings totalled 32. This strong quarter brought the total space let for the first half of the year to an impressive 583,924 square feet.
Although the office market continues to perform well, there is a lack of Grade A office space which in turn allows landlords to remain firm on terms. Incentives continue to decrease in the short term and rental levels continue to rise. This trend may have a negative impact on the pace of emerging start-ups and company growth as options for high-quality, serviced and flexible office space remains limited.
There are currently several exciting developments underway in Newcastle and Gateshead which will combat the lack of Grade A space. I am confident that the launch of The Lumen, Newcastle Helix and RIGA – Baltic Quarter will provide new opportunities for those looking to cement their business within one of the most exciting and fastest growing areas in the UK.
We are delighted to be part of Developing Consensus, working alongside members to make the region more attractive to investors and to provide the right conditions for growth. The North East has shown incredible resilience and strength over the last year despite tough economic conditions and with further landmark developments and schemes in progress, we are confident that the region will continue to flourish.
For more information please visit www.bradleyhall.co.uk