Owner-occupiers drive demand for Wales industrial property

Industrial take up in Wales, for units over 50,000 sq ft, reached approximately 1.4m sq ft for the first six months of 2013 – above the same period a year ago but lower than the second half of 2012.

The figures are revealed in the latest Logic report on the logistics and industrial property market from Knight Frank.

According to the report the majority of the deals in the first half of the year comprised purchases by owner-occupiers. These included buildings at Kenfig and along the Heads of the Valleys, some of which have been vacant for several years.

Neil Francis, head of the Industrial Team of Knight Frank’s Cardiff office, said: “The beginning of 2013 did not start well for the South Wales industrial market as it was dominated by large-scale factory closures releasing over 1m sq ft of space. Since Easter however activity has picked up and there has been an increase in enquiries. Whilst heavy manufacturing is generally considered to be struggling, other sectors such as distribution, warehousing and energy related uses continued to present requirements within the market.”

Looking ahead, Neil Francis said that with a number of active requirements between 50,000 sq ft and 100,000 sq ft, the second half of the year should witness notable transactions.

“We expect the shortage of good quality units to put upward pressure on rental levels for such stock but in contrast, larger properties in secondary locations, and of a poorer quality, will continue to prove difficult to let,” he said. “In order to secure occupiers, we expect that these units will be let at a low rental with, in some situations, the ingoing tenant paying rates only.”

Commenting on the report, Neil Francis said: “While we are by no means out of the downturn that has been so damaging in recent years we can now see a definite upturn in industrial property activity and take heart from these figures and from levels of interest that show Welsh entrepreneurship is alive and thriving.”