Wales witnessed a 13% fall in supply of industrial and logistics space in 2018, one of the sharpest contractions of any UK region. The stage was set for speculative development but what will it take to secure success in uncertain times?
While the final impact of Brexit remains unclear, the outlook for industrial property does remain broadly positive. Large retailers have long recognised the need to offer their customers omni-channel fulfilment - consider how Argos and Tu shoppers can now collect items from Sainsbury’s Local stores, for example. Maximum consumer convenience is what matters and that represents opportunities.
In South Wales, one recent development is the 430,000 sq ft purpose-built Aldi Distribution Centre at Wentloog. However, despite Cardiff seeing high demand throughout 2018, it is still suffering an acute shortage of available industrial stock, with less than 3% supply.
Further north, along the A465 Heads of the Valleys Road, the Furnishing Service took 9,287 sq ft at the Pant Industrial Estate and the company is already looking to expand further and increase its vehicle fleet.
The removal of the Severn Bridge tolls will certainly boost the sector, although gains will not be fully realised until the M4 Relief Road is constructed to relieve the pressure on the M4 around Newport. With e-commerce and the need for flexible logistics a constant, there is a clear need for more development.
Opportunities beyond retail exist, evidenced by the recent 165,000 sq ft unit built for CAF trains at Celtic Business Park, Newport. As well as design and builds, owners are refurbishing older industrial stock.
An example of an ongoing conversion is Edwards Industrial Estate in Llantrisant. The 249,253 sq ft former manufacturing site is now owned by Edwards Coaches and is being refurbished into a multi-let industrial estate, with a range of industrial units and offices on site.
Local insight, a close understanding of rents and site potential, as well as the expertise needed to secure good quality lettings, are the factors that will underpin long-term success in the sector.