Wales Industrial Market Take Up Falls by Almost Half
This brought the total take up for H1 2025 to 538,900 sq ft, 48 per cent lower than the same period last year.
Neil Francis, who heads Knight Frank's Logistics & Industrial division in Cardiff, said:
'It has been another challenging quarter with transaction for units over 50,000 sq ft significantly down on previous years. On the one hand, the dip in volumes reflects the shortage of high quality stock available, which is resulting in steady rental growth, but is also partly due to increasingly elongated deal timelines.
'However, the sizeable amount of space under offer provides a strong indication of the underlying strength of demand. Nearly 850,000 sq ft – 22 per cent of supply – was under offer at the end of June, including three units over 100,000 sq ft in size. If progressed, these deals could significantly lift take up in the second half of the year.'
Activity so far this year has been dominated by owner occupiers with four of the five H1 transactions being freehold purchases. The largest transaction in Q2 was Euro Clad Limited's acquisition of their three units at Wentloog Corporate Park in Cardiff that totals around 170,000 sq ft.
Manufacturers remained the most dominant source of industrial property demand in Wales. Their 62 per cent share of take up over the past four quarters to Q2 2025 was up from 46 per cent in the same four quarter period last year.
Retailers also re-entered the market after being largely absent over the past year. During Q2, online catering equipment reseller Adexa Direct purchased the 75,190 sq ft Unit E at Treorchy Industrial Estate, Treorchy for storage purposes.
According to the Knight Frank research, the availability of 50,000 sq ft plus units across Wales edged up slightly in Q2, by 3.7 per cent to 3.9 million sq ft. However, it remains 25 per cent lower than a year ago, reflecting a broader trend of tightening supply.
Neil Francis said:
'Crucially, the entire pool of available space is second hand, and 96 per cent of this is Grade B or below. This underlines the growing mismatch between supply and the new, modern requirements of occupiers. At the larger end there are only two available units over 250,000 sq ft, one of which is under offer.'
The speculative pipeline for industrial property in Wales remains thin, with just the 55,000 sq ft Unit 1 at Leftfield in Deeside, North Wales breaking ground in Q2, with practical completion expected in Q3 2025.
'There is currently no 50,000 sq ft plus industrial speculative development activity in South Wales,' said Neil Francis.
Prime industrial rents in Cardiff for units over 30,000 sq ft reached double digits in Q2, rising by 2.6 per cent to a new headline rent at the 36,000 sq ft Unit 32 at Coryton, Cardiff where FPS Distribution has taken a 15 year lease. The unit is arguably in one of the best located sites in the region, being on the M4/A470 Junction.
This rental increase represents 14.3 per cent growth year on year. Average rental growth of 3.3 per cent is forecast for Wales for 2025, with 3.4 per cent expected for Cardiff.
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