There has been a rise in take-up of large industrial and logistics space in Wales, according to new research from property advisory firm Knight Frank. In the first half of 2026, based on units of more than 50,000 sq ft, total take-up exceeded 600,000 sq ft, up from 540,000 sq ft recorded in the first half of 2025.
Second Quarter Activity
Activity in the second quarter reached approximately 270,000 sq ft across three transactions, comprising two sales and one letting. While this represents a slight increase on Q2 2025, where 239,000 sq ft was transacted, it marked a slowdown compared with the first three months of 2026. The research said the decrease in deal volumes reflects ongoing uncertainty within the market. Notably, around 800,000 sq ft of space that was under offer in the previous quarter has yet to complete, highlighting extended due diligence processes and a general slowdown in transaction timelines.
Market Commentary
Knight Frank partner Neil Francis, who heads up the industrial and agency team at its Cardiff office, said: “While we have seen a softer second quarter in terms of completed transactions, this is not a reflection of demand. There remains a significant volume of space under offer, but increased scrutiny and longer due diligence periods are undoubtedly slowing the pace at which deals are concluding.”
Development Pipeline
Despite these headwinds, Knight Frank said there are signs of positive momentum within the development pipeline. At Indurent Park Newport, levels of occupier interest have already been recorded, with discussions underway on two units before steel frames have been erected — an indicator of sustained demand for modern, high-quality industrial space. Further west, Fabco are progressing plans for a mid box scheme at Pencoed, while Deeside Regeneration are advancing similar plans there. Knight Frank said these projects are expected to contribute much needed new stock into a marketplace that continues to experience supply constraints, particularly for well-specified units.
Government Investment
In addition, the Welsh Government are advancing plans to refurbish the 100,000 sq ft unit at Hirwaun which they acquired last quarter. This investment is set to enhance the quality of available space along the Heads of the Valleys corridor, supporting both regional regeneration and occupier demand. Mr Francis said: “The encouraging aspect is the strength of the development pipeline and the level of early-stage interest we are seeing, particularly for high-quality, well-located space. This underlines a market that remains fundamentally robust, even if transactions are taking longer to complete.”
Investment Trends
On investment trends for industrial units over 50,000 sq ft, the report says there remains strong demand for well-located industrial property across South Wales. Tom Griffiths, associate in Knight Frank’s capital markets team, said: “Long-medium term investments are particularly attractive to French real estate investment funds, which are drawn to the South Wales’ favourable yield profile, especially those assets requiring minimal asset management. This is demonstrated by Alderan’s acquisition in Q2 of Kestrel House in Cwmbran which extends to circa 83,000 sq ft.”
