Cushman & Wakefield this week presented its Newcastle Property Outlook for 2017 and beyond following a year of unprecedented economic and political change.
The breakfast presentation, held at the Tyneside Cinema in Newcastle city centre, revealed that the commercial property market in the North East has largely shrugged off the issue of Brexit.
Elisabeth Troni, Head of EMEA Research & Insight, at Cushman & Wakefield began the event with a keynote presentation on the impact of Brexit on the real estate market.
She revealed that the Newcastle logistics market tops Cushman & Wakefield’s Fair Value ranking, offering the best value for investors across UK regions and sectors.
“The devaluation of Sterling and the expected boost to trade and FDI in the region means that the logistics market in the North East will be a ‘star performer’ for years to come,” said Elisabeth Troni.
This was followed by a discussion on some of the key hot topics facing the property industry including the future of working and shopping trends against a backdrop of technological change.
She said: “We predict that automation will have a larger impact on the future of UK work and jobs than Brexit. Cushman & Wakefield believe this will limit the impact of north shoring benefits to the North East but should drive growth in high skilled industries concentrated in city centres.”
Richard Turner, Head of Investment at Cushman & Wakefield’s Newcastle office, then discussed the outlook for the North East’s commercial property and what opportunities lay ahead.
In 2016 the North East market reflected the national picture as occupiers and investors sat tight in the lead up to the referendum and the following uncertainty once Brexit became a reality.
After a difficult year in both occupational and investment markets, the presentation highlighted that 2017 has seen the start of a post-Brexit consensus as the key players get on with business in a market defined by under supply in the key industrial and office markets, and a real estate industry struggling to adapt to the pace of disruption in the retail sector.
Richard Turner said: “Whilst the current climate of uncertainty raises the risk of existential shock, we are confident that the solid underlying dynamics of the market shine through as its key drivers in the short to medium term.
“We expect a busy 12 months going forward, with rental growth in evidence in both industrial and Newcastle city centre office markets, and investor interest, including international capital, remaining strong.
“In the residential market the burgeoning institutional investment in the private rented sector looks set to hit Newcastle with one 280 bed apartment scheme already on site. Amongst regional markets Manchester is leading the charge with a pipeline of 8,000 units and with even with a fraction of this coming forward in Newcastle, the potential is striking.”
He added: “The region will continue to suffer from the marginal viability of new development, which will hold back the supply of much-needed new space and with it the regional economy. We feel that as in past cycles, brave developers who commit to providing space will be rewarded with strong tenant demand.”
