The latest LOGIC research from Knight Frank shows that the industrial and logistics market for units over 50,000 sq ft has demonstrated underlying resilience in the first half of 2026, with total take-up exceeding 600,000 sq ft and outperforming the 540,000 sq ft recorded at the same point last year.
Activity in the second quarter reached approximately 270,000 sq ft across three transactions, comprising two sales and one letting. While this represents a slight increase on Q2 2025, where 239,000 sq ft was transacted, it marks a slowdown compared with Q1 2026.
The decrease in deal volumes reflects ongoing uncertainty within the market. Notably, around 800,000 sq ft of space that was under offer in the previous quarter has yet to complete, highlighting extended due diligence processes and a general slowdown in transaction timelines.
Neil Francis said:
“While we have seen a softer second quarter in terms of completed transactions, this is not a reflection of demand. There remains a significant volume of space under offer, but increased scrutiny and longer due diligence periods are undoubtedly slowing the pace at which deals are concluding.”
Despite these headwinds, there are clear signs of positive momentum within the development pipeline. At Indurent Park Newport, encouraging levels of occupier interest have already been recorded, with discussions underway on two units before steel frames have been erected, an indicator of sustained demand for modern, high-quality industrial space.
Further west, Fabco are progressing plans for a mid box scheme at Pencoed, while Deeside Regeneration are advancing similar plans in the region. These projects are expected to contribute much needed new stock to a market, that continues to experience supply constraints, particularly for well-specified units.
In addition, the Welsh Government are advancing plans to refurbish the 100,000 sq ft unit at Hirwaun which they acquired last quarter. This investment is set to enhance the quality of available space along the Heads of the Valleys corridor, supporting both regional regeneration and occupier demand.
Neil Francis added:
“The encouraging aspect is the strength of the development pipeline and the level of early-stage interest we are seeing, particularly for high-quality, well-located space. This underlines a market that remains fundamentally robust, even if transactions are taking longer to complete.”
The report also comments on investment trends for industrial units over 50,000 sq ft where there remains strong demand for well-located industrial property across South Wales.
Tom Griffiths, Associate in the Capital Markets Team, added:
“Long-medium term investments are particularly attractive to French real estate investors, who are drawn to the South Wales’ favourable yield profile, especially those assets requiring minimal asset management. This is demonstrated by Alderan’s acquisition in Q2 of Kestrel House in Cwmbran, which measures circa 83,000 sq ft.”
