GUEST COLUMN:
Phil Jardine
Partner
Blake Morgan
As we start 2025 there is real potential for growth in the Welsh commercial property market.
The demand is certainly there, much of it pent up, and Cardiff is among the UK’s fastest-growing cities.
However, to realise this growth, we must also face some hard truths: government intervention will likely be required to bridge the gap between Wales and other regions, both in terms of infrastructure investment and market competitiveness. We also need radical intervention to liberalise the planning logjams delaying investment and development. This is not purely about money but resource, skills and procedures.
Wales has historically lagged England in terms of commercial property development and rents. For example, while prime office rents in Wales hover around £27 to £28 per square foot, regions such as Oxford are commanding figures closer to £50. This disparity is a stark reminder of the challenges we face, but it also highlights the untapped potential in the Welsh market.
The opportunities for growth are undeniable. Cardiff is seeing increasing demand for commercial office space, driven by its growth as a city and its appeal as a business hub. On the industrial front, there is significant demand for warehouse and logistics space. Yet the supply of both land and suitable buildings is insufficient to meet these needs. For Wales to fully capitalise on these opportunities, investment in infrastructure and modernisation is critical.
The quality of existing stock is a major hurdle. Across almost every sector—whether high streets, city centres, or out-of-town commercial developments—we see deteriorating and, in some cases, near-derelict landscapes. In a market where ESG (environmental, social, and governance) requirements are becoming non-negotiable, ageing infrastructure is holding us back. This isn’t just a commercial issue; it affects housing and broader regional growth as well.
Interest rates are finally starting to fall, which brings some relief. Cheaper money creates opportunities for development and modernisation, but we’re not yet seeing sufficient private appetite to match the scale of what’s needed. Unfortunately, past missed opportunities for investment during years of lower borrowing costs have left us with a legacy of underfunded projects and outdated assets.
This is where government intervention becomes vital. The largest office deal in Wales in 2024 was not driven by private enterprise but by Welsh Government investment in Cardiff Gate Business Park, taking over the former Lloyds building. Such moves demonstrate the necessity for public-sector involvement, not just to stimulate the market but also to ensure that Wales doesn’t fall further behind other regions. Without intervention, the gap between Wales and comparable areas will only widen.
We must acknowledge that intervention doesn’t just mean spending—it means strategic investment to create an environment where private developers and investors feel empowered to step in. This could involve infrastructure development, subsidies for modernisation projects, or public-private partnerships to rejuvenate key sites. The challenge is to do this in a way that doesn’t discourage private investment but instead works alongside it to build confidence in the Welsh market.
As we head into 2025, I remain optimistic about the future of commercial property in Wales. The demand for modern, high-quality spaces—both commercial and residential—is there, and the economic potential of regions like Cardiff is undeniable. However, this growth will not happen in isolation. It will take a concerted effort, with government playing an active role in enabling the market to thrive.
Strategic interventions into the market to enable fast-growth, hi-tech and AI businesses to enter and thrive in Wales is one thing. Addressing the poverty of resource in over-stretched planning authorities is another. Training and developing a new generation of public sector planners will take a generation but we cannot wait that long.
The available well-trained private sector skills and resources can help now in bringing temporary to mid-term relief enabling progress to be made, as will a shortening and liberalising of the processes holding up much needed developments and investments. Wales cannot afford to slip further behind the rest of the UK.
If we can strike the right balance between public and private investment, there is every reason to believe that the Welsh commercial property market can reach new heights. Growth is achievable—but only if we all pull in the same direction.
