The take up of industrial property over 50,000 sq ft in Wales reached 1.87 million sq ft in 2023, up slightly on the 1.8 million sq ft in 2022, according to research from Knight Frank.
The global property consultancy reported that five deals totalling 416,000 sq ft were transacted in Wales in Quarter 4 (Q4), compared with 103,000 sq ft in the final quarter of last year.
Neil Francis, head of Logistics & Industrial at Knight Frank in Cardiff, said: “Of the five deals in the quarter, the 52,000 sq ft letting of Unit 9, St Modwen Park, Newport to JLI Trading was a highlight in that it set a new headline rent of £8.75 per sq ft for mid-box units in Wales.
“The largest transaction was the sale of 130,000 sq ft at Llandow Trading Estate to an owner occupier.”
According to the research, the middle part of the year was dominated by a number of closures within South Wales which released over 1 million sq ft of secondary-located industrial stock into the market.
“Positively though following the sad demise of UK Window Group, Knight Frank has managed to secure offers on all three properties in Rhondda Cynon Taff, totalling circa 200,000 sq ft, with completions expected in January,” Neil Francis said.
Availability stood at 6.6 million sq ft at the year end but that does include the 1.6 million sq ft at Ford, Bridgend. He added: “With regards to Ford, rumours persist that a deal has finally been agreed to sell this 1.6 million sq ft facility which will clearly impact take up next year.
“At the time of writing our research we understand that contracts have been exchanged but no formal announcement on completion made, so we can only assume that it will be some time in H1 2024.
“In addition, the 850,000 sq ft Wilko site at Magor is being formally launched to the market in February 2024 and is already attracting both occupier and investor interest.”
The Knight Frank research showed that at St Modwen Park in Newport the 116,000 sq ft Unit 8 was under offer and due to exchange this quarter with just the 110,000 sq ft Unit 10 still available of the larger units.
Contracts are due to be exchanged this month on the 34,000 sq ft Unit 4 at St Modwen Park, leaving only 43,000 sq ft remaining available, with a number of interested parties.
Other new developments include the 52,582 sq ft RYB 1 unit at Rhyd y Blew which completed in October and is attracting strong levels of interest with a letting due to be concluded in Q1 2024.
On the Bridgend Industrial Estate Robert Hitchins has been proactive with its remaining two sites at Central Park. Unusually for the South Wales market, the company has secured two pre-lets this year. With a builders merchant signed up for a 20,000 sq ft unit and construction started on a pre-let purpose-built 80,000 sq ft Distribution Centre, the estate will be fully developed and let by the end of 2024.
Meanwhile, the remaining plot at Junction 35 continues to attract interest with discussions ongoing with developers seeking to build between 30,000 sq ft and 60,000 sq ft self-contained units.
Neil Francis said: “Looking forward, 2024 is set to continue where 2023 left off, with good levels of interest mixed with a fair degree of caution. There will continue to be a focus on a flight to quality, meaning properties with strong ESG credentials and good M4 connectivity will become increasingly attractive.
“It will be interesting to see progression of the Cubex 67,000 sq ft unit in Wentloog Cardiff, London Metric’s 37,000 sq ft at Junction 32, Cardiff, and Curtis Hall at Pentwyn. In addition, Studwelders has planning approval for a 200,000 sq ft unit in Magor and St Modwen is pushing ahead with Phase 5 at St Modwen Park, which will include two large-box units of 120,000 sq ft and 160,000 sq ft.”
