The take up of large industrial space in Wales grew sharply in the first quarter of 2023.
Latest research from property advisory firm Knight Frank saw take up of industrial property over 50,000 sq ft in Wales bounce back in Q1 2023 following a subdued three months, with transactions totalling 412,000 sq ft over six deals.
The level of activity was four times more than the final quarter of 2022 and almost 100,000 sq ft more than the same period the previous year.
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Neil Francis, head of logistics and industrial at Knight Frank in Cardiff, said: “The figures comprised two sales and four leasehold deals, highlighting the lack of freehold opportunities within the market, especially in south Wales.
“Two of the lettings were properties purchased and refurbished to a high standard by developer PMG, reflecting the increasing role national operators are playing in keeping the industrial sector buoyant in Wales.”
In terms of availability of large units, the research showed that, excluding the 1.6m sq ft former Ford engine plant where a sale is due to be announced, around four million sq ft was available over 40 properties.
“Pleasingly though, almost 300,000 sq ft of this is in the three new build units at St Modwen Park, Newport, where the 116,000 sq ft unit is under offer and terms have been proposed for the 52,500 sq ft unit,” said Mr Francis.
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“This all follows success on the estate in January where a new headline rent was set in the letting of 17,000 sq ft unit 5 to Ureka Global in January. With two of the three remaining units also under offer, further lettings are expected in Q2.”
Much needed new space north of the M4 is also being developed in Ebbw Vale, close to the Heads of the Valleys Road, where the Welsh Government are on site with their 50,000 sq ft unit, due to complete late in the year.
“Looking ahead to quarter two, Knight Frank has two units under offer over 100,000 sq ft so we expect the strong levels of take up to continue,” said Mr Francis.
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He added: “The announcement that two new freeports are set to be established in Wales, at Celtic Freeport covering Milford Haven and Port Talbot, and at Anglesey Freeport in North Wales, is potentially very exciting and it will be very interesting to see how this progresses, and the opportunities it presents.
“Finally, while our research specifically focuses on larger industrial property it is worth acknowledging the progress being made to satisfy the appetite of growing smaller local businesses keen to move to more efficient properties, having expanded as far as they can in ageing buildings and appreciating the benefits a new building brings.
“Key schemes include Whitebeam Court at Ty Du near Nelson, where all 11 units have now been let and occupied by growing local businesses. In addition, at developer FABCO’s Felindre Court on Pencoed Technology Park near Bridgend, 18 speculatively-built small units have been pre-sold.
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“Fabco are now progressing with a second phase on the adjoining site, while following the success of their two schemes in Barry, Dawan Developments are now progressing a similar scheme at Waterton in Bridgend Cwm Cynon in Mountain Ash.”
“With all these new developments, regardless of size, we are seeing occupiers demand more from their units in terms of their sustainability and energy efficiency. The increase in rents and investor appetite for industrial property is helping ensure these requirements are being met and high quality development is being delivered.”
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