Times are tough and lettings remain hard-won, but agents in the North East are finding plenty of ways to stay busy and make money, as Daniel Cunningham reports
The lettings market in the North East is not dead, but it is not easy either. Newcastle’s out-of-town office take-up saved the day last year, bringing the city region’s total to around 650,000 sq ft – the best year since 2009’s 722,000 sq ft.
But while Newcastle city centre’s take-up, at 195,000 sq ft, was better than the previous year, it remained below the pre-bust 250,000 sq ft done in 2006. In short, the region’s agents cannot rely on occupier moves to generate business.
So, just how are the region’s agents making money? EG spoke to practices large and small to find out.
The independent Newcastle agent: JK Property Consultants
? Based in Newcastle
? Five staff
? Led by founder Kevan Carrick
“These things come in cycles,” says Newcastle veteran Kevan Carrick, JK’s partner and founder. “We’ve learned that, as long as you can provide value for money to the client and know the region, you should hold your own.”
Development consultancy – working with clients to identify future opportunities – takes up a significant amount of Carrick’s time, he explains. While local public sector bodies are relying more and more on in-house teams for such work and many developers are sitting on their hands, Carrick argues that some landowners are preparing for the next cycle.
In one case, he was able to marry the potential of a client’s site at Askew Road in Gateshead, with Network Rail’s need for a new depot. As a result, Durham-based 3R Land and Property has planning consent for a mixed-use scheme.
Asset management is also a major source of income as landlords wake up to the need to sweat their assets, adds Carrick.
“Those who don’t want to spend money are holding off, but the more enlightened landlords see the cost is well exceeded by the value created,” he says.
The niche Sunderland agent: Paul Airey
? Based in Sunderland
? Six staff
? Led by Paul Airey
Traditionally, Paul Airey’s eponymous Sunderland practice was a commercial agency, but the downturn forced it into developing what Airey describes as a “different string to our bow”.
He says: “We’ve sidelined the commercial side of things and are concentrating on the residential sales and lettings department.”
The move from a commercial to residential focus was sparked by the need to identify steady income streams after the market crashed.
Rather than hiring estate agents, one of Airey’s directors, Sean Heaney, trained existing staff based on his background in his family’s private property business.
The transition seems to have been successful, with the practice winning the “gold award” at a UK national letting agent of the year event in 2011, awarded by an industry body.
Commercial work tends to focus on distressed site sales, says Airey. Recently, he sold a partially built residential scheme at Belstone Court in Sunderland – formerly developed by Irish firm Carvill Group – to local housing group Gentoo, on behalf of administrator PricewaterhouseCoopers.
Airey says that the commercial side of the business is still active, but selective: “I only consider instructions that I am confident that we can do something with. We have actually turned some down.”
The regional agent: Sanderson Weatherall
? North East offices in Stockton on Tees and Newcastle
? 14 staff in Stockton and 45 in Newcastle
? Stockton office led by David Jackson
The Stockton office of Sanderson Weatherall is one of three branches of the firm situated across its heartland of the North East and Yorkshire. While colleagues operate out of Newcastle, the firm’s Stockton branch covers Middlesbrough and the Tees Valley.
Office head David Jackson no longer sees himself as just the office agent he was during what he calls the “good old days” before the downturn.
Jackson says that the market provides opportunities to get involved in land purchase deals, as residential developers bid to take advantage of the fall in values across the region.
Landlord and tenant work is also paramount, he adds, with occupiers still predisposed to renegotiate leases rather than incur relocation costs.
But Jackson has faith in the future of the local lettings market, buoyed by hopes that the Tees Valley enterprise zone, established across 12 sites in the region, will entice small-to-medium-sized occupiers to move.
The global agent: Jones Lang LaSalle
? Based in Newcastle
? 13 staff
? Led by Jonathan Sykes
Before Jones Lang LaSalle took over King Sturge last year, the office which Jonathan Sykes heads in Newcastle was branded with the blue and red of the latter. But has the switch to the name of the world’s biggest agent made a material difference on Tyneside?
Since becoming part of JLL, the branch has been instructed to a “big city centre scheme”, says Sykes. The office has also seen a steady increase in the volume of valuation work for banking clients.
“We now have a much bigger brand, which is well-known both nationally and internationally, and we can link in to greater resources,” Sykes says.
He adds that while office deals might not be abundant, letting activity across other sectors is ongoing. “Manufacturing and distribution as well as out-of-town and non-food retail is keeping us busy.”
