Take-up of large industrial space in Wales slowed in Q3 (quarter three) but remains ahead of the same period in 2020, according to new research from global property consultancy Knight Frank.
For industrial units of 50,000 sq ft and over, five deals totalling 440,000 sq ft were transacted in the quarter – down compared with the 720,000 sq ft in Q2, but significantly ahead of the 69,000 sq ft transacted in the same period in 2020.
Neil Francis, head of logistics and industrial at Knight Frank in Cardiff, said: “As expected, the summer was quieter in terms of general market active as restrictions eased and people took advantage of much needed downtime.
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“Of the five transactions that took place, three were in the storage and distribution sector, where the trend and demand for warehouse increases month by month.”
E-Warehousing continued its expansion within the area by acquiring 114,000 sq ft at Avondale Industrial Estate, and Top Regal acquired 100,000 sq ft in Crumlin.
The only freehold sale was of a 65,000 sq ft unit in Barry. Mr Francis said: “This highlights the lack of good quality freehold space within the market, with occupiers having to consider leasehold solutions as opposed to waiting for the ‘right opportunity’ to come to market. Businesses cannot wait for this and are acting now.
For the quarter the availability of units over 50,000 sq ft stood at 5.7 million sq ft in the quarter. Mr Francis said: “With Ford at Bridgend and Imperial Park at Newport accounting for 2.6 million sq ft of this space it is clear that stock levels are reducing.
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“Interestingly Imperial Park, Newport is under offer and due to complete soon so Q4 will not only have a significant level of take up – it will also reduce availability.
“In terms of new stock, St Modwen has completed its 100,000 sq ft new build in Newport, and demand for this property has been strong, with a number of viewings and terms proposed.
“A letting to the preferred occupier is due to be finalised in October at what would be a new record headline rent in South Wales for a unit of this size.”
On the outlook M Francis said: “As we look to Q4 the picture remains the same, with good levels of interest and many units under offer. We expect another strong quarter which could see take up for the year in Wales reach three million sq ft.”