UK Steel Enterprise (UKSE) is investing close to £5 million to see the continued development of a site in the Tees Valley, where the latest construction effort is aimed at establishing a further 46 managed offices.
Demand for managed offices is emanating primarily from small and medium-sized enterprises, which organisations like One North East and Tees Valley Unlimited are keen to see establish themselves and flourish.
Both groups have welcomed the investment from UKSE, which is a subsidiary of the increasingly international manufacturing giant Tata Steel.
“This investment by UK Steel Enterprise is very welcome and it is good to see the development taking shape,” commented One North East’s director of capital development, David Cramond.
“Projects like this are extremely important for the economy of Tees Valley and the north-east and demonstrate what can be done when organisations work in partnership across the region.”
One North East is a regional development agency that works closely with organisations like Tees Valley Unlimited, which represents public, private and voluntary interests within the local area.
Elsewhere in the North East, a report published last month by BNP Paribas Real Estate suggested that serviced offices were growing in popularity among businesses in Newcastle, the largest city in the region.
Editor’s notes: In 2022, the total take-up of space in Newcastle through office lettings deals totalled 239,410 square feet with headline rents reaching £28 per sqft per annum.
It is expected that prime office rents will reach £30 per sqft in 2023 at properties such as Bank House and the development of high-quality space will push it to £32 per sqft in 2024.
One of the largest deals in 2022 was Clifford Chance’s acquisition of 15,182 square feet at The Lumen.
Although this was overshadowed by HMRC’s commitment to 463,000 square feet at Pilgrim’s Quarter in 2021.
There is a growing number of flexible workspace providers in Newcastle that offer alternatives to leased office space. These alternatives include private office suites, managed offices and coworking desk membership plans.
These flexible office space and workspace solution providers are becoming increasingly competitive with traditional office space landlords that were finding themselves offering almost 2-year rent-free periods on 10-year leases towards the end of 2022, in the wake of global economic uncertainty.