The latest Logistics and Industrial Research from the Cardiff office of Knight Frank shows that the market for units of over 50,000 sq ft continues to be as active as witnessed last year. In the first half of 2015 there were eight recorded transactions for such space with approximately 800,000 sq ft either let or sold.
Neil Francis, associate at Knight Frank comments: “The level of take up for the first half of the year was similar to that recorded for the second half of 2014 and as per recent trends there was an equal split between leasehold and freehold transactions.”
He adds: “Two of the larger leasehold transactions were secured by Associated British Ports, which attracted Travis Perkins to 81,000 sq ft at Cardiff Docks, and Speedy Hire to 170,000 sq ft at Newport Docks. These transactions highlight that the specialist Port Operator has the land availability and infrastructure in place to become a significant regional landlord in the ‘big shed’ market.
“Purchases in the Heads of the Valleys region by Cwmtillery Glass (54,000 sq ft at Festival Drive, Ebbw Vale) and Gerry Jones Transport (105,000 sq ft at Tafarnaubach Industrial Estate, Tredegar) shows continued growing confidence within the area. It is pleasing to see both these local companies expanding their operations into these factories.”
The Knight Frank research also highlights that for units above 50,000 sq ft there remains approximately 5.5 million sq ft available in Wales with Grade A space still accounting for less than 10 per cent.
Neil Francis continued: “With 220,000 sq ft of Grade A space rumoured to be under offer at Imperial Park in Newport, this figure is going to diminish even further in H2 2015 which will limit the good quality options for occupiers in the market. On a positive note though, St Modwen has started construction on its speculative development of a detached warehouse at Celtic Business Park, Llanwern which is close to Junction 23a of the M4 Motorway. Measuring 50,000 sq ft it is due for completion by the end of the year and is the first build of its type for a number of years.”
In terms of the outlook for the remainder of the 2015 Neil remains confident that market activity will continue to improve and finishes: “As we head towards the summer period there are a number of units over 100,000 sq ft that are under offer and due to complete shortly. I fully expect that take up for units of 50,000 sq ft plus will pass 2 million sq ft by the end of the year.
“With a number of requirements still outstanding those that cannot identify suitable opportunities may need to consider new build options which can only assist in given confidence for the much needed speculative development the market requires.”