An increase in the final quarter of the year saw the take up of industrial property over 50,000 sq ft in Wales reach just over 2.2 million sq ft in 2024, up from the 1.8 million sq ft in 2023, according to research from Knight Frank.
The global property consultancy reported that 10 deals totalling 850,000 sq ft were transacted in Wales in Quarter 4 (Q4), compared with 420,000 sq ft in the final quarter of last year. Of these, six were leasehold and four were freehold.
Neil Francis, head of Logistics & Industrial at Knight Frank in Cardiff, said: “It was satisfying to see the final quarter of 2024 show an upturn in deals for larger industrial properties and this led to an improved year overall for the Welsh industrial property market.
“The most successful development of the new space has been at Indurent Park (formerly St Modwen) at Llanwern, where over the past three years the company has constructed nine units from 15,000 sq ft to 110,000 sq ft, taking the speculative total build to over 600,000 sq ft.
“The first letting on Phases 3 and 4 secured a headline rent of £8.50 per sq ft and gradually, deal by deal, this has increased to the point where the latest letting achieved was at £9.75 per sq ft.
Plans are being drawn up for Phase 5 and it is hoped that 2025 will see more speculative development on this popular estate.”
The only other speculatively developed mid-box unit in Wales in the past year was the 52,000 sq ft RYB 1 in Ebbw Vale. Constructed to BREEAM ‘Excellent’ standard by the Welsh Government, it has now been let to a local engineering company which has agreed a 10-year lease at £6.50 per sq ft, surpassing any rental in the area. The deal means that there is no Grade A stock currently available in Wales.
Neil Francis commented: “We have also witnessed a number of pre-lets in the past 12 months. These are generally rare in the region, but such is the lack of Grade A space that developers like Robert Hitchins and London Metric have been able to offer attractive packages to occupiers to secure long-term lettings.
Hitchins started this with a 20,000 sq ft letting to builders merchant MKM at its Central Park site in Bridgend Industrial Estate and rapidly followed up with a bespoke offering to Evri for a 82,000 sq ft dock-levelled industrial facility with a larger than standard yard area.”
The Knight Frank report shows that London Metric secured a pre-let to the Alliance Automotive Group for a new 35,000 sq ft distribution unit at Axis 32, Coryton.
“Arguably this site is one of the best located in South Wales being on the M4/A470 junction and being able to service much of the region in under an hour,” said Neil Francis. “London Metric adapted the scheme to suit the occupier and the rent agreed is over £11 per sq ft, which will set a new headline that I am hoping will trigger confidence for more speculative development.
“It is also worth noting in terms of availability that 2024 saw 2.5 million sq ft of industrial space in Ford, Bridgend and Wilko, Magor removed from the availability but not included in the take up stats as both sites are being redeveloped for Data Centre usage.
“Wales currently has 32 units totalling just under 4 million sq ft available – but none of this is Grade A space.
Moving forward, this lack of Grade A space will impact take up in 2025. As a result, we will see owners of second-hand stock who are willing to refurbish reap the rewards of increased rents. We also expect an increase in pre-let activity, with occupiers willing to wait for a new-build unit that suits their requirements.”
