Build-to-suit transactions return to the market
Despite lower take-up figures, strong occupier demand remains for large-scale, high-quality logistics space in South Wales’ key cities and principal motorway networks. The current availability numbers highlight redevelopment opportunities, though build costs continue to challenge the financial viability of new speculative development
Jack Davies, Director, Industrial
Indurent Park Newport, which is now 100% let
Supply
Over the past twelve months, the availability of warehouse space has increased by 17%, now totalling 2.71 million sq ft. This is reflected in an increase in the vacancy rate, which now stands at 3.4%. Based on the average five-year annual take-up, there is currently 1.68 years’ worth of supply in the market.
There are seven available units in the 100,000–200,000 sq ft range, one unit in the 200,000–300,000 sq ft range, two units in the 300,000–400,000 sq ft range, and one unit over 500,000 sq ft.
By grade, 6% of space is Grade B and 94% is low-quality Grade C. Of those available units, 1.42 million sq ft is currently under offer; if this space completes, this will help taper further outward movement in the vacancy rate, in addition to an absent speculative development pipeline. There is an occupier preference for best-in-class assets, therefore, the current available supply in Wales presents opportunities for redevelopment of existing low-quality sites to meet this occupier demand.
Savills’ in-house rental growth projections suggest that in our baseline scenario, the region is expected to see an average rental growth of 4.6% per annum over the next few years.
Take-up
Transactional activity has fallen by 86% over the last twelve months, totalling c.314,000 sq ft in H1 2025, across two transactions. However, the fall in take-up is distorted by a record-breaking H1 2024, where take-up totalled 2.27 million sq ft, with 1.6 million sq ft transacted in one deal, reflecting how the size of the market can impact on transactional activity.
When looking at unit count, both transactions involved units in the 100,000–200,000 sq ft range. This is on par with the H1 long-term deal count average for the 100,000–200,000 sq ft range.
By specification, 46% of the space transacted was BTS and 54% was second-hand. By grade, this equates to 46% second-hand Grade A space and 54% Grade B space. H1 2025 has seen a resurgence in BTS transactions since 2023, which can be attributed to the space taken by Amazon at ABP Business Park.
By occupier sector, 54% of space transacted was for manufacturing companies and 46% of space was taken up by online retailers. The market has seen a return of manufacturing companies taking up the most space.
Development pipeline
There are currently no units under construction, however, early site preparations have started on the upcoming new speculative development at Indurent Park in Newport. This indicates the uptick in activity set to occur in the Wales market, together with significant land available for BTS opportunities at multiple ports across South Wales.