Tesco has agreed a deal with PD Port for a huge distribution warehouse in the north east.

The UK’s biggest retailer is to occupy 1.2m sq ft on a brownfield site at PD’s Teesport next to the Northern Gateway container terminal. The deal was tipped by Property Week in February.

Juliette Bishop, Tesco corporate affairs manager at Tesco: ‘Our non-food business is expanding each year with a significant proportion of our hard-lines stock, such as electrical goods, imported from the Far East and this requires the levels of stock that we need to hold to be higher than for other areas of our business.’

‘We need to increase our storage capacity to deal with the increased levels of imported containerised goods and building a storage facility at the port removes the need to move stock from the port where it is imported, to a storage facility inland.

's well as reducing the double handling of imported stock, this will help to reduce the road miles that products travel, which is better for the environment.’

Work on the Tesco unit is expected to start this summer, to be operational by the autumn of 2009.

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