Newcastle upon Tyne Market Report

Yield Range

7.5-9.5%

Vacancy Rate

10-17%

Active Deals

Outlook

Positive

Resilient CRE market with strong office take-up in city centre (454k sq ft 2025), low industrial vacancy, diversification into clean energy, digital, manufacturing. Limited supply driving rents. Parker Knights Q4 2025, Knight Frank LOGIC NE

Yields & Returns

Prime industrial 5.75%, secondary 8%; office prime 7.5-9.5%; retail ~6%. Knight Frank, Knight Frank UK Cities, Parker Knights Q1

Vacancy & Supply

Vacancy Rates

Industrial 8.1%; office moderate 10-17% (city centre rising preference); retail decreasing vs national avg. Knight Frank, Parker Knights

Supply Pipeline

Limited: industrial 117k sq ft spec; office Pilgrim Place (96k sq ft 2027), Maker & Faber Sunderland. Second-hand dominant. Knight Frank, Parker Knights Q1

Competitor Activity

Dukeries Gateshead industrial £7.5m at 8.01% NIY Q4 2025; various office lettings e.g. DWP 173k sq ft. Knight Frank, Parker Knights Q1

Firm	Activity	Asset	Detail	Value
Various	Transaction	Commercial	Dukeries Gateshead industrial £7.5m at 8.01% NIY Q4 2025	£7.5
Various	Transaction	Commercial	various office lettings e.g. DWP 173k sq ft. Knight Frank, Parker Knights Q1	N/A

Demand Drivers

Clean energy (Dogger Bank), advanced manufacturing, digital/AI, creative industries, universities, regeneration. Place North East, Parker Knights

Rental Market

Office prime £35 psf forecast, industrial £8 psf stable; flexible spaces, hybrid demand strong; residential up 15%. Parker Knights, NGU

Employment & Economy

Employment 70.1%, unemployment 7.1%, inactivity 24.4% (above UK); growth in tech/energy/pharma; high FDI jobs/capita. NE Evidence Hub, NECC

Migration & Demographics

Newcastle ~300k (up 7.1% 2011-2021), metro est 834k 2025; increasing diversity, child pop up 8.1%. Newcastle DPH

Transport & Connectivity

£208m by 2027: new ferry, Tyne/Wear ticketing, 100km active travel; Metro expansion, road/rail upgrades. BBC, Place NE

Key Risks

High unemployment/inactivity, economic uncertainty, supply constraints, interest rates, geopolitical risks. Parker Knights, Fine & Country

Outlook 12–24 Months

Modest rental growth 2.5-3.6%, yield compression with falling rates; continued demand in quality assets, balanced supply/demand. Positive momentum into 2026-27. Knight Frank, Place NE

Sources

Knight Frank Industrial ↗Parker Knights Office Q4 ↗Parker Knights Trends ↗Place North East ↗NE Evidence Hub ↗BBC Transport ↗