Investment in Welsh commercial property reached nearly £72m in the second quarter of 2026, a 67% increase compared to the same period last year, according to new figures from property advisory firm Knight Frank.
The strong performance, which saw deal volumes rise from £43m in Q2 2025, marks the highest quarterly total since £103m in 2020. Private investors, primarily property companies (propcos) and high-net-worth individuals, accounted for 61% of investment in the first half of the year, significantly ahead of international buyers at 21%.
Private investors lead the market
Private investors' market share in the first six months of 2026 far exceeded their average of 24% between 2020 and 2025, according to Knight Frank's analysis. This shift reflects a broader trend where domestic buyers have stepped in as international activity has softened.
Tom Griffiths, associate at Knight Frank's Cardiff office, said: "Private buyers are driving investment in the Welsh commercial property market this year, representing not far off two-thirds of volumes. They have stepped in where international buyers have left off for the moment, as the geopolitical situation softens the appetite for cross-border deals across the UK."
Key deals and international interest
The standout transaction was the sale of the grade A Hodge House office building in Cardiff city centre to SevenCitiesLdn in a deal worth over £30m. Outside the capital, deals totalled just under £22m, largely for industrial and warehouse units in South Wales, including the sale-and-lease-back purchase of the AF Blakemore distribution centre in Talbot Green by a French SCPI.
French open-ended commercial property funds, known as Sociétés Civiles de Placement Immobiliers (SCPIs), accounted for the majority of international investment. They were behind the purchases of Kestrel House in Cwmbran and 5-10 Church Street in Cardiff, home to restaurant chains the Botanist, Honest Burger, and Mowgli.
Outlook for the rest of 2026
Griffiths noted that French SCPIs remain active, attracted by yields of 7% or higher and lean assets with minimal management requirements. In the industrial sector, rents are still behind the curve, and constrained supply of quality space creates a reversionary story for buyers.
"Another emerging trend we are beginning to see is a shift back towards income-focused buyers who want longer, steadier income streams," Griffiths added. "While the geopolitical situation and economic outlook will likely continue to loom in the second half of the year, Wales's market dynamics remain strong. Limited supply, both in Cardiff offices and South Wales industrial, should continue to keep prime rents on a positive trajectory, and we would hope to see that translate into more deal activity in the remainder of 2026."
