Industrial property activity across Wales picked up pace in the final quarter of 2025, but a lack of Grade A space continued to restrict overall annual performance, according to new research from Knight Frank.
The firm’s latest report shows that take-up of industrial units larger than 50,000 sq ft reached approximately 675,000 sq ft during Q4. This represented an increase of around 250,000 sq ft compared with the previous quarter, although activity remained well below levels seen in the same period of 2024.
Transactions during the quarter included two lettings and three sales, with notable deals such as 165,000 sq ft at Queensway Way Meadows in Newport and a 200,000 sq ft letting at Swansea Enterprise Park.
Despite the late-year uplift, total industrial take-up across Wales for 2025 reached just over 1.7 million sq ft, significantly down on the 2.7 million sq ft recorded in 2024.
Neil Francis, Head of the Wales Logistics & Industrial team at Knight Frank, said supply issues remain the dominant factor.
“This drop from last year is at least partly accounted for by there being no available Grade A space in South Wales of this size throughout 2025.”
While availability across South Wales stood at 3.7 million sq ft by the end of the year, Francis said much of the space is unsuitable for modern occupiers.
“Again this is an increase on last year but frustratingly much is poor quality accommodation in secondary location where redevelopment or higher value uses are not viable.”
He added that the shortage of new-build accommodation has led to stalled enquiries and increased interest in pre-let discussions, a trend that is beginning to unlock development confidence.
This has supported plans for further investment at Indurent Park in Newport, where a new Phase 5 is expected to deliver 338,000 sq ft of modern industrial and logistics space in 2026.
“Double digit rents are being quoted and will be achieved,” Francis said.
The report also highlighted strength in the mid-box market, with a record headline rent achieved at the new 36,000 sq ft Axis 32 logistics warehouse at Junction 32 of the M4 in Cardiff, developed by LondonMetric Property Plc and pre-let to FPS Distribution on a 15-year lease.
Knight Frank Associate Rhys Price said Wales is outperforming the rest of the UK in rental growth for Industrial Outdoor Storage (IOS) land.
“Our research shows that Swansea, Newport and Cardiff took the first three places in the latest national league table of annual rent increases for this category of land.”
Swansea recorded the strongest growth at 23 per cent, followed by Newport at 20 per cent and Cardiff at 17 per cent.
Price also pointed to improving prospects for smaller business unit developments, with new schemes planned in Pencoed, Bridgend, Abercynon and Nelson.
Reflecting on the firm’s performance, Francis said:
“For the second year in a row we have transacted over 1 million sq ft of space which is a testimony to the strength of the team and our position in the market – and is even more striking given only one of these deals involved Grade A space.”
During 2025, Knight Frank’s Logistics & Industrial team completed more than £13 million in sales and secured lettings worth over £2.75 million per annum.