Avison Young: Newcastle economy on track for 6.8% growth
A report published by the property consultancy said that life sciences and tech will be key drivers as it forecast growth in the years to 2028.
The North East’s upcoming £4.2bn devolution deal, which will see significant powers transferred to the region from central government, is also set to be a driver of economic growth, supporting strategic regeneration projects and enabling the creation of new residential and commercial developments, said AY.
Newcastle’s digital and tech economy has expanded by 51% since 2013, and the key tech sectors now driving recruitment trends include fintech, greentech and cyber security.
Data also shows that in the first half of 2022, tech job vacancies grew by 75% in Newcastle, compared to only 25% in Birmingham, and the city has also seen a 40% increase in people employed in artificial intelligence roles.
According to data from Oxford Economics, Newcastle’s information and communication sector is expected to see growth of over 12% in the next five years, and its science and tech sector will see growth of over 8% during the same period.
The real estate opportunities highlighted in AY’s Outlook report, launched last week, include Newcastle Helix, a 24-acre area of the city where hospital and university partners are central to growing the tech and science community.
Other notable schemes include Forth Yards and the Health Innovation Neighbourhood (HIN), a joint venture between Newcastle University and Genr8 Developments, centred on the former General Hospital site. In addition, the redevelopment of Pilgrim Street will see nearly 1m sq ft of new stock delivered.
The city’s labour market is also expected to see significant growth over the next five years, with Oxford Economics forecasting 3.8% growth for Newcastle by 2028 compared with 3.1% for the UK as a whole.
Gordon Hewling, regional managing director for Newcastle at Avison Young UK, said: “Across the North East, there are many transformational schemes coming forward. When considered alongside the upcoming devolution process and the investment that will unlock, it’s clear that the region has never had a better chance to build on its vision for change, removing obstacles and creating an environment to deliver both short-term and long-term wins.
“From education and job opportunities to quality housing and better health outcomes, we’re setting a course to deliver meaningful change.”
Nicola Fairbairn, partner at DAC Beachcroft, said: “As a firm working hard to embed ourselves in the regional economy, we were proud to be the first letting at Bank House in the Pilgrim Street development, which forms part of a £100m city centre regeneration scheme.
“Our talent base is always evolving, and we need to continue to stay one step ahead. This means having quality office space in the right location, enabling us to connect into our communities, take full advantage of the devolution trajectory, and harness the talent on our doorsteps. It’s a very exciting time for the city and the wider region.”
Michelle Percy, director of place at Newcastle City Council, said: “The significant development that we are seeing in our city today is the product of a lot of patience and steadfast vision from the public and private sectors over the last two decades.
“We must be looking ahead to the next 20 years, defining our priorities as a city and continuing to work closely and creatively with the private sector to turn viability around. It is our responsibility to do this for future generations, so we must ensure that we adopt an inclusive approach to planning our path to growth.”
The devolution process, which is now in train and will lead next year to a mayoral election to head a combined authority covering Newcastle, Sunderland, Gateshead, County Durham, Northumberland and North and South Tyneside, will play a key part, said Dr Henry Kippin, chief executive at North of Tyne Combined Authority:
“It’s been hard fought and hard won, but the region has created an opportunity with our devolution deal to seize the moment and dream together about what we want the next 30 years to look like.
“This is our chance to strengthen collaboration in the North East and start making bold decisions for the future of our region. But this will only be possible in partnership – we need the private, public and social sectors to work together to unlock investment and deliver inclusive growth.”
Roger Thornton, head of property at Motcomb Estates, said: “We’re seeing good progress being made in terms of devolution, which has created a hugely positive outlook for the region and allows it to plan for the future – one that will hopefully come to fruition very quickly and deliver a multi-billion-pound investment into the region.
“This deal is a great enabler of our region’s economic growth, putting the power in our hands to transform the North East’s transport, housing, skills and employment, and economic development.”
The report is available to read in full online.