Take up of Welsh industrial property across south Wales had a slower start in the first quarter of 2022 compared to positive activity seen in North Wales, according to the latest research from property consultancy Knight Frank.
The five transactions for property over 50,000 sq ft in size in Q1 totalled 326,000 sq ft — down from 492,000 sq ft in Q1 2021 — with four freehold deals and one leasehold.
Neil Francis, head of logistics and industrial at Knight Frank in Cardiff, said: “Encouragingly, three of the five deals were for property in North Wales. In South Wales, it was a slower start than last year as the ongoing high demand continued to reduce availability.
“Overall, total availability across Wales is 4 million sq ft but Ford in Bridgend accounts for 1.6 million sq ft of this. Currently, of the 25 properties in Wales over 50,000 sq ft that are available only seven are openly for sale.”
Earlier this year, Knight Frank reported that the well-publicised shortage of Grade A units had been a key factor in the industrial property market in Wales over the past five years.
But the lack of available Grade A industrial property has been exacerbated by the surge in demand for larger units.
It's a problem which has accelerated dramatically in the last two years, due to the Covid-driven switch to online retailing which has led to companies wanting larger units for warehousing and distribution for e-commerce.
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Mr Francis added: “The strong demand for high-quality industrial property has a dual impact, reducing availability but also encouraging developers to undertake new-build projects.
“In North Wales, this is evident at Wrexham Industrial Estate where online retailer Net World Sports has started work on a new £25m 411,000 sq ft warehouse and office. There are also market rumours of a 144,000 sq ft pre-let on the same estate.”
The new-build projects across south Wales include Trebor’s speculative industrial scheme of 46,100 sq ft on Pencoed Technology Park, and the acquisition by Cubex of a 9.5 acre site at Magor, where it is developing a Grade A 160,000 sq ft logistics unit, already rumoured to be under offer.
The Welsh Government is also to develop a 50,000 sq ft industrial unit in Ebbw Vale.
Mr Francis said: “It is exciting to see new developers such as Trebor and Cubex attracted to Wales for the first time by the buoyant industrial market which now exists.”