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Take-up in North East business parks rises.

NEW research has revealed the North East is the only region in the UK in which take-up in business parks rose during the first six months of 2008.

And the strong demand for business park space here is being linked to a shortage of quality space in Newcastle city centre. The newly published Business Park Review 2008, from GVA Grimley, says nationally business park demand is recording the lowest recorded levels of six-monthly take-up since the first half of 2004, with two million sq ft let compared with three million sq ft in the first half of last year.

However the take-up of space and pre-lets in the North East is said to be noticeably stronger than in other regions.

The most active enquiries have been from the public sector, customer contact centres, outsourcing of Government contracts and the financial sector.

Despite low national take-up levels, the report reveals that new space under construction has risen and is up 25% to 4.5 million sq ft from six months ago and up 14% from one year ago.

Speculative development is at a record high as a result of finance secured before the credit crunch and stands at 3.6 million sq ft, well above the six monthly five-year average of two million sq ft.

Most business park space under construction in the North East is at Cobalt Business Park (270,000 sq ft), Baltic Business Park (130,000 sq ft), Spectrum in Seaham (77,000sq ft) and the adjacent Lighthouse View on Dawdon Business Park (70,000 sq ft).

The prime out-of-town office index at the end of June 2008 shows that rents in the North East, Yorkshire and the Humber increased by 0.5% over the year while showing no increase at all over the past six months.

Newcastle, the only centre to see out-of-town rents increase over the preceding 12 months, now shows an average of pounds 16.25 per square foot.

Mike Cuthbertson, regional senior director of GVA Lamb and Edge, said: "The North East shows robust demand for business park lettings to date. The region is well placed to withstand the downturn. However we are monitoring demand closely to determine any change in line with national trends.

"The increase in speculative development at business parks nationally means that there is a danger that we may enter a period of over-supply and increased vacancy levels."
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Sep 3, 2008
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