The take up of large industrial property space in Wales doubled in the second half of this year, according to new research from property advisory firm Knight Frank.
Its analysis of deals for properties of more than 50,000 sq ft showed a total 680,000 sq ft was let or acquired, compared to 340,000 sq ft in the first quarter of the year. This brought the total take up for the first half of 2024 to just over one million sq ft - some 400,000 sq ft more than in the same period in 2023.
Neil Francis, head of the logistics and industrial division at Knight Frank in Cardiff, said: “Q2 2024 was different to recent years due to the sale of the 1.6 million sq ft Ford site at Bridgend.
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“As the purchaser is planning to use the site for a data centre the facility is no longer classed within the industrial/warehouse use category, and so can be stripped out of the Wales industrial figures.”
The Knight Frank report revealed that while Q1 was dominated by freehold sales, two thirds of the Q2 transactions were leasehold, with the largest being the letting of unit 8 St Modwen Park in Newport to aviation services company Aerfin.
Mr Francis added: “This 110,000 sq ft unit was speculatively built last year and the new 10-year lease has been secured at a headline rent for a unit of this size within the region.
“The largest sale of the quarter was 230,000 sq ft at Reevesland Industrial Estate, Newport to Kwan Yick, which acquired the property including vacant space that they will now occupy themselves.”
Availability now stands at 5.2 million sq ft of which 16 per cent is represented by the 850,000 sq ft Wilko portfolio at Magor, which is rumoured to be under offer again.
Mr Francis added: “Looking forward to Q3 the market for units larger than 50,000 sq ft still looks positive. At St Modwen Park in Newport the last two built-out units are under offer, with the 43,000 sq ft unit 7 due to complete in July and Unit 10 expected to complete in October. Both will continue the trend of setting new headline rents.”
In addition, the new 52,582 sq ft RYB 1 unit at Rhyd y Blew in Ebbw Vale, where construction was completed in October, is now under offer to a local occupier which is expanding its operations within the region.
Whilst under the 50,000 sq ft size category, the 36,705 Axis 32 unit at Coryton, Cardiff is under offer for a build to suit letting, with lease completion expected in July, and with building works commencing immediately for a Q1 2025 occupation. This letting will create a new headline rent for South Wales once completed.
Mr Francis said: “The upturn in letting this quarter is encouraging but sadly much of the larger industrial stock released onto the market recently is in poorer condition in secondary locations. There are only two grade A buildings in South Wales and one in North Wales currently available and they are all under offer – which again highlights the ongoing flight to quality by occupiers.”
