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South Wales Dominates Take-Up of Industrial Space in the South West


According to Savills latest Big Shed Briefing, take-up of industrial space (units of 100,000 sq ft +) in South Wales and the South West was just 720,000 sq ft (66,888 sq m) in 2019, a 64% decrease on 2018, due to a chronic lack of available grade A warehouse space.

In isolation, South Wales accounted for 58% of all space transacted throughout the wider region, says Savills. The international real estate advisor says that the removal of tolls from the Severn bridges in December 2018 has materially improved Wales as an option for occupiers through increased connectivity paired with lower property rents and land prices, so the Welsh market has the potential to grow significantly in the coming years if the appropriate space is developed.

Demand from potential occupiers for space in the wider region is not being met by supply, however, says Savills. Second hand space accounting for 79% of all space transacted in the wider region last year and the vast majority (75%) of deals centring on smaller-sized units of between 100,000 and 200,000 sq ft (9,290 – 18,580 sq m). This mirrors the current supply in the market: Savills says that just 7% of current vacant warehouse space being speculatively developed in Wales and the South West is of grade A quality, whilst 64% is grade B or C, and smaller units dominate, with 62% of available units being within the 100,000-200,000 sq ft size category.

Rob Cleeves, director in Savills industrial and logistics team, comments:

“There are only four units currently under construction in the wider region, totalling 535,000 sq ft, all of which are within the small 100,000- 200,000 sq ft size band, and the largest of these is due to be completed in 2019 is in the Bristol Gateway in Sharpness. There is therefore significant potential for anyone looking to speculatively develop industrial space along the strategic road and rail network in South Wales.”

Chris Potts, head of Savills Cardiff office, adds:

“Warehousing space in South Wales is increasingly in demand as the removal of the Severn bridges tolls has brought the area onto the radar of occupiers who wouldn’t consider it before, being put off by the cost of paying for frequent freight trips across the border. With a new National Planning Framework looking at strategic employment opportunities and local authorities such as Cardiff identifying new industrial development strategies this is an ideal time for developers to deliver large scale schemes.”