Danny Cramman is Director at Avison Young and joint agent on Integra 61

“The Industrial and Logistics market in the North East region remains one of the best performing sectors, reflective of its position across the UK as a whole. There remains strong interest from occupiers, developers and investors looking for opportunities throughout the region. We believe this trend will continue throughout 2026.

One of the attractions for industrial and logistics property investors and developers is that the rental levels achievable across the North East for good quality product have held up well. Although growth may have slowed slightly from the peak of the market, rents are continuing an upward trajectory. We expect this to continue going forward.

Whilst there has been some speculative development over recent years there remains a supply and demand imbalance. How tight supply is will be dependent on the size band and location of a particular occupier requirement, but it is safe to say there are shortages in most sizes and locations across the North East region, particularly for new build and good quality product.

With this shortage of Grade A stock, the 640,000 sq ft Connect development at Citrus Group’s £400m Integra 61 mixed-use scheme is an excellent example of a strategic site with a range of unit sizes to meet a variety of occupier needs. The scheme is the largest the region has seen in over a decade and has excellent connectivity to the wider region via the A1(M), an important factor in delivering such developments.

The scheme has seen two lettings so far with Connection Flooring taking a 63,000 sq ft unit. This followed on from Restore PLC taking an 84,000 sq ft unit on a long term lease. The remaining units provide space for occupiers ranging from 43,000 sq ft to 298,000 sq ft. Citrus Group have just submitted outline planning for phase 2 of Integra 61 which will deliver up to a further 3.2 million sq ft of employment space making it one of the key strategic sites in the region.

Looking forward into 2026 there are some positive early signs for the sector. Interest rates look set to fall further during the remainder of the year. We hope to see continuing growth in occupier confidence feeding through into increased levels of take up across the whole of the North East. Key sectors include storage and distribution, retail, the offshore sector and of course Nissan and their growing supply chain.

It’s fair to say 2025 was a mixed bag in terms of take up, particularly in the larger size ranges of units in excess of 50,000 sq ft. After a slow first half of the year, we saw a spike in take up during Q3 with six transactions, more than Q1 and Q2 combined. There was then a slow down in Q4 with occupiers delaying decisions until the new year.

Good demand along with constrained supply should see rental growth in the sector continuing. There is a limited pipeline of speculative development set to be delivered during the course of this year, so these dynamics are unlikely to change. Manufacturing remains an important sector having accounted for a high proportion of take up in 2025. We believe the industrial market in the North East is well placed to have a successful year in 2026.”