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News Release

Cardiff

Strong growth of industrial property take-up in Wales leaves shortage of stock

JLL report says demand remains high for re-shoring of manufacturing to Wales


CARDIFF, April 22, 2015 – Take-up of industrial space in Wales saw its strongest growth for some years in 2014, a new report by JLL shows, as the leading property consultancy warned there is now a real shortage of new and modern stock.

Chris Sutton, head of the Cardiff office of JLL, said that a lack of new and modern stock in the industrial sector in Wales is putting pressure on rental and capital values.

Pinewood Studios WalesTotal industrial take-up in Wales was around 4.6 million sq ft in 2014, 5% up on 2013. At the end of December 2014, there was some 12.7 million sq ft of industrial floorspace available across Wales, 14% down on December 2013.

Sutton said: “2014 saw the strongest growth in the industrial sector in Wales for some years. The key driver of activity has been the growth in demand for larger units with 61% of take-up last year involving units over 100,000 sq ft.”

“There have been a series of large inward investment transactions including Tenneco Walker Automotive, Pinewood Studios Wales and Raytheon and there remains strong demand for the re-shoring of manufacturing to Wales.”

In the logistics sector, Aldi announced that it would start the development of a 450,000 sq ft regional distribution centre in Cardiff whilst Bidvest 3663 is developing an 180,000 sq ft facility in Chepstow.

Industrial take-up involving units from 1,000 sq ft to 99,000 sq ft totalled 1.8 million sq ft in Wales in 2014, 37% down on 2013. However, floorspace transacted in large units of 100,000 sq ft and over rose sharply, posting an 82% increase on 2013.

The available supply in units below 100,000 sq ft totalled 8.2 million sq ft, 12% lower than a year earlier. At the end of December 2014, availability in units 1,000 to 99,000 sq ft represented around three years of supply compared with the annual average take-up rate over the past five years (2010-2014).

Research from JLL indicates that there is now a clear lack of new and modern floorspace currently available in the industrial market. 
Sutton said: “The availability of the right site, or building, can be fundamental to Wales winning, or retaining, a project in competition with other regions of the UK or, indeed, international competitors. There are now significant gaps in the supply of new floorspace across a wide range of property types and locations in Wales.

“The recent inward investment wins illustrate the value of modern floorspace being immediately available and, for many projects, an 18 month wait for a bespoke development is simply not a viable option.”

Sutton added: “Whilst the past twelve months have seen a continued economic recovery, there is still little or no speculative development of new floorspace by the private sector.
“Therefore, our priority should be to focus upon capacity building, through a twin track approach of reformed spatial planning whilst also addressing viability, potentially through gap funding from the Welsh Government.” ​