Welsh industrial property take up drops in the second quarter of 2023
Global property consultancy Knight Frank found that take up of large industrial property across Wales was down significantly in the second quarter of 2023 compared to this time last year.
The level of activity for properties over 50,000 sq ft was 177,000 sq ft lower than during Q2 2022 and less than half the number of transactions witnessed in Q1 this year.
Neil Francis, head of Logistics & Industrial at Knight Frank in Cardiff, said: “The figures comprised one sale in North Wales and two lettings in South Wales, with the stand out deal being the letting of the newly constructed 50,000 sq ft unit at Junction 35, Pencoed by Deeside Regeneration.
This was let to Sainsbury’s Supermarkets Limited on a 10 year lease and the investment is now being sold in the market with good levels of interest in acquiring this opportunity.”
He added: “I would describe the market as inconsistent this quarter and we have a number of large units under offer which we had hoped would have completed by now. With a push towards getting these completed before summer we do expect Q3 to record higher take up.”
The Knight Frank research showed that availability in Wales for the quarter stood at 5.7 million sq ft, up by 600,000 sq ft on Q1. Of this, 450,000 sq ft can be classed as Grade A space with St Modwen Park, Newport offering two units of 106,000 sq ft and 116,000 sq ft, both of which are attracting strong interest at the quoting rent of £8.75 per sq ft.
In addition construction work is progressing well at the 52,582 sq ft RYB1 at Rhyd y Blew in Ebbw Vale with good levels of interest received from a range of occupiers
Neil Francis commented further: “Of the 5.7 million sq ft availability, 1.6 million sq ft is the Ford site and we still wait to understand who is acquiring this and the plans for this site in the future.
In my review of 2022 I said that the wider UK economic pressures could impact on business viability and could in turn increase availability levels as 2003 progresses. We have seen this in Q2 with a number of closures announced and with further business failures rumoured we expect the availability of second hand stock to increase.”
He added: “Positively though we are still seeing demand from occupiers keen to own property. For example, Knight Frank is marketing a 55,000 sq ft unit that had two parties bidding, both had cash, and the price secured is close to asking. With a number of freehold properties likely to become available we expect similar sentiment into Q3.”
