If you’re eyeing the property market in Wales, especially in the industrial sector, the recent trends have some interesting implications for your investments. Business Wales shared some numbers and looked at what this means for potential investors.

A Significant Q3 Upswing

The third quarter (Q3) of the year showcased a promising surge in the uptake of large industrial properties in Wales. Specifically, the take-up soared to 800,000 sq ft, marking a dramatic increase. How dramatic, you ask? This figure is a whopping four times the take-up seen in the second quarter (Q2) of this year.

However, when we take a step back and compare this with the third quarter of the previous year, the take-up was a commendable 1.3 million sq ft. This implies that while Q3’s figures are promising, they still fall short of the record set last year. For a broader picture, the total take-up for the first nine months of 2023 is lesser by 300,000 sq ft compared to the same period in 2022.

Breaking Down the Transactions

Out of the total Q3 take-up:

• Six transactions were recorded.
• South Wales dominated the transaction list with three lettings and two sales.
• North Wales chipped in with one sale.

Spotlight Transactions

Neil Francis, who heads Knight Frank’s Logistics & Industrial team in Cardiff, highlighted a few key transactions from this quarter:

• The biggest sale was the Toyoda Gosei site in Gorseinon, Swansea. This property, measuring 255,000 sq ft, was sold to Jayplas.
• The Creative Industries sector stood out, with significant acquisitions by Great Point Media and Bad Wolf in South Wales. This underscores the booming growth of this sector in the region and its pivotal role in boosting South Wales’ profile and contributing to employment.

Concerns and Realities

Although the Q3 figures are a marked improvement over Q2, it hasn’t been all roses. Neil lamented that ten different occupiers had either announced closures or shared plans to rationalise their property portfolios.

Current Availability

The property availability in Wales for Q3 stood at an expansive 6.5 million sq ft. This is a significant leap from the 4.4 million sq ft recorded at the same time last year and 1.2 million sq ft more than the previous quarter.

A notable portion of this availability is the 1.6 million sq ft Ford site. The market is rife with rumours about its potential sale, but there’s no clear timeline in sight. Moreover, with Wilko’s unfortunate decline, an 850,000 sq ft distribution facility has also entered the market.

Silver Linings

On a brighter note:

• St Modwen has wrapped up the construction of three units in Newport. A 52,000 sq ft letting was completed in October, and discussions are underway for the remaining units.
• The Welsh Government’s 52,582 sq ft unit at Rhyd y Blew in Ebbw Vale has seen significant interest, with expectations of offers in the upcoming quarter.

The Road Ahead

The market’s trajectory, though positive in Q3, carries a cloud of uncertainty. There’s a discernible trend of investors favouring prime locations and well-maintained properties, leading to increasing rent rates with every new letting.