Skip to content

Avison Young’s 2021 Forecast Newcastle

January 27, 2021

Share via:

Avison Young’s “2021 Forecast Newcastle” is part of a series of city region reports, which explore the evolving realities of the UK commercial real estate landscape in the coming year. The report highlights key trends affecting Newcastle and the wider region, informed by data-based insights and sector specialist advice as part of Avison Young’s 2021 Forecast campaign.


Looking across the region, we have seen an incredible amount of activity in the last 12 months, much of which relates to long term, strategic projects which will continue through 2021 and beyond, influencing the market significantly. Projects such as:

  • Teesworks – the Former SSI site on Teesside, where a planning application has been submitted covering 780 acres of land and enabling works has commenced;
  • Durham – where works are progressing to redevelop Milburngate and relocate the Council HQ, freeing up Aykley Heads for further development;
  • Sunderland – with the launch of ambitious plans by the City Council looking ahead over the next 20 years addressing infrastructure, residential, commercial and leisure projects. Early projects are already complete with others well advanced, some with funding from L&G;
  • Gateshead – where a whole raft of development including the £250m Ask Patrizia Gateshead Quays conference centre is progressing;


  • Newcastle – which has a plethora of transformational commercial schemes in progress as part of larger, phased developments, including Newcastle Helix, Pilgrim Street, Strawberry Place and Stephenson Quarter.


The last decade has seen significant change in Newcastle, with the quality of the built stock improving and the city’s status as a home for technology developing. This has been off the back of growing private and public sector investment in the city, which is set to continue.

Despite little activity nationwide, the Newcastle office market saw relatively robust leasing volumes during 2020 given the economic backdrop. In what is positive news for the year ahead, we are continuing to see active requirements, with Invest Newcastle reporting north-shoring and reshoring interest from companies attracted to the city.

With supply in the city relatively tight, there is currently relatively little choice for occupiers. In some cases, this is forcing occupiers to look to the out of town market for the right space. In town, The Lumen continues to let well and The Spark – not due to complete until 2022 – is already seeing significant interest. As a result, with a lack of any grey space returning to the market in the short-term, we expect vacancy levels to remain relatively low.

Gordon Hewling, Principal and Managing Director, Avison Young, Newcastle comments:

“Looking further ahead, we have seen construction start on Ask Real Estate’s 70,000 sq. ft One Strawberry Lane, following forward funding from Canada Life, with the building already let to the Home Group on a 30year lease. Elsewhere, Bank House on Pilgrim Street remains under construction, due to complete in 2023.”

Gordon Hewling, Principal and Managing Director, Avison Young, Newcastle

Newcastle’s city centre continues to evolve, and the afore-mentioned developments, as well as the restart of the Stephenson Quarter development, will see an improvement to the built environment of the city, whilst also encouraging an increase in its daytime population. This is being added to in the form of city centre living, with Hadrian’s Tower, the city’s tallest building, completing during 2020, and an increasing Build to Rent (BTR) presence.

While the city’s comparatively low-cost base continues to be a strength, the city and wider region continues to garner a reputation for innovation and technology, centred around the National Innovation Centre for Data and the Research and Innovation Hub.

In Sunderland, Legal & General and Landid has been granted planning permission for 150,000 sq. ft of offices on the site of the former Vaux brewery site.

Legal & General has also agreed a joint venture deal with Sunderland City Council to develop a total of around 620,000 sq. ft at Hillthorn Farm in Washington for industrial space.

Occupiers will increasingly look for design and build solutions with key strategic sites such as Integra 61 in Durham, increasingly attractive. In Durham itself, development continues apace, particularly along the riverside with the Milburngate mixed use development of office, hotel, retail and residential, together with the new Council HQ. In turn, this will free up the current site at Aykley Heads for redevelopment.

In the south of the region, development has also continued across the Tees Valley. 2020 saw the completion of Phase 1 of Teesside Advanced Manufacturing Park, providing 180,000 sq ft of modern research and manufacturing facilities, whilst work commenced in earnest on Teesworks, the former SSI site, which is the UK’s largest industrial zone. Further west, the new Amazon facility at Symmetry Park, Darlington, is fully operational, with planning for a further 630,000 sq ft on the remainder of the site.

The news that Blyth has been selected for the UK’s first “giga-factory” is a huge boost to the region, with work due to start during 2021 on the site of the former power station. Britishvolt, backed by Siemens, is due to invest £2.6bn to manufacture electric car batteries, with this potentially the largest industrial inward investment to the region since Nissan. Blyth is also bidding to be one of the UK’s first “freeports”, with a decision due in the spring.

Gordon Hewling adds: “Positive business resilience is helping to sustain the strong performance of the commercial activity sector in Newcastle, which provides a robust platform for future economic recovery in Newcastle and the overall North East region.”

Latest articles

Stay up-to-date with latest news, events and more within a great city that never stands still.

Your Business. Your City. Your Future.

Subscribe to our newsletter

Subscribe to Invest Newcastle for updates, news, events and business opportunities.