Take -up of large industrial space in Wales has fallen significantly, according to new research from property advisory firm Knight Frank.
Based on transactions of space over 50,000 sq ft, the total take-up was 200,000 sq ft in the second quarter of this year. The level of activity was 177,000 sq ft lower than during Q2 2022 and less than half the transactions witnessed in Q1 this year.
Neil Francis, head of logistics and industrial at Knight Frank’s Cardiff office, said: “The figures comprised one sale in north Wales and two lettings in south Wales, with the standout deal being the letting of the newly constructed 50,000 sq ft unit at Junction 35, Pencoed, by Deeside Regeneration. This was let to Sainsbury’s Supermarkets on a 10-year lease and the investment is now being sold in the market with good levels of interest in acquiring this opportunity.”
He added: “I would describe the market as inconsistent this quarter and we have a number of large units under offer which we had hoped would have completed by now. With a push towards getting these completed before summer, we do expect Q3 to record higher take-up.”
The research showed that availability in Wales for the quarter stood at 5.7 million sq ft, up by 600,000 sq ft on Q1. Of this, 450,000 sq ft can be classed as Grade A space, with St Modwen Park, Newport, offering two units of 106,000 sq ft and 116,000 sq ft, both of which are attracting strong interest at the quoting rent of £8.75 per sq ft.
In addition, construction work is progressing well at the 52,582 sq ft RYB1 at Rhyd y Blew in Ebbw Vale, with good levels of interest received from a range of occupiers
Mr Francis said: “Of the 5.7 million sq ft availability, 1.6 million sq ft is the Ford site and we still wait to understand who is acquiring this and the plans for this site in the future.
“In my review of 2022 I said that the wider Ƶ economic pressures could impact on business viability and could in turn increase availability levels as 2003 progresses. We have seen this in Q2 with a number of closures announced, and with further business failures rumoured we expect the availability of second-hand stock to increase.
“Positively, though, we are still seeing demand from occupiers keen to own property. For example, Knight Frank is marketing a 55,000 sq ft unit that had two parties bidding, both had cash, and the price secured is close to asking. With a number of freehold properties likely to become available, we expect similar sentiment into Q3.”
