The take-up of large industrial space in Wales reached 344,882 sq ft in the first quarter of this year, a figure that underscores a market of contrasting signals as it charts its path through 2026.
According to research from global property consultant Knight Frank, this quarterly volume represents an increase of approximately 50,000 sq ft on the same period in 2025. However, it marks a significant drop from the 675,000 sq ft of activity recorded in the final quarter of last year. The figures pertain to units defined as large, meaning they exceed 50,000 sq ft in size.
Significant Deals Drive First Quarter Activity
The quarter’s total was comprised of two lettings and two sales. The largest transaction was the sale of the 111,000 sq ft former Liberty Steel facility in Tredegar, which was purchased by an existing South Wales-based manufacturer for use as a second site in the region. Liberty Steel Tredegar had specialised in steel tubes and sections, and while restructuring was announced in 2021, the site was not initially believed to be among those for sale.
The second major sale saw the Welsh Government acquire Unit 1 at Hirwaun Industrial Estate for £3.15m. The Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, oversees a government that purchased the surplus 97,300 sq ft distribution warehouse from stationery business IG Design Group. IG Design Group stated the sale was part of a strategy to monetise non-core assets and is expected to generate a profit of approximately £2.9 million.
The Welsh Government now plans to invest an additional sum, stated to be just over £6m, to upgrade the facility, which includes six acres of development land. This investment falls under the Tech Valleys programme, aiming to create modern industrial space to attract inward investment and aid local business expansion. The estate benefits from improved transport links following the £2 billion upgrade of the A465.
Neil Francis, head of Knight Frank’s industrial team in Cardiff, pointed to a similar refurbishment project by local investor Gevrey on a 120,000 sq ft property in Tredegar. That site, acquired last year, has been upgraded with a new roof and internal refurbishment, and currently has 60,000 sq ft under offer.
Major Availability Shift with Wilko Facility
A key development reshaping the market landscape is the substantial rise in available industrial stock. Availability in Wales now stands at 4.6 million sq ft, a sharp increase from 3.7 million sq ft at the end of 2025.
This surge is overwhelmingly impacted by the return to the market of the 900,000 sq ft former Wilko distribution facility in Magor. The property’s reintroduction single-handedly adds a significant volume of empty space. It is understood that the facility has been earmarked for a major data centre investment, a sector examined in Knight Frank’s own global reports.
This comes against a backdrop where a shortage of large, high-quality Grade A units in South Wales had constrained the market in 2025, contributing to a 37% annual decrease in annual take-up that year. The current inconsistency is noted by Neil Francis, who said general activity levels are better than the take-up figures suggest, with over 800,000 sq ft of space currently under offer to occupiers. “Q2 will be a significant quarter for the market if legals progress successfully,” he added.
New Builds and Future Supply
Looking ahead, new construction is beginning to address the supply shortage. Indurent is leading the way with 350,000 sq ft under construction at Indurent Park in Newport, a 100-acre business park on the site of the former Llanwern steelworks. The development, which offers units from 45,000 to 115,000 sq ft and focuses on sustainable credentials, will start becoming available from the fourth quarter of 2026. There is reported good early interest, and the quoting rents are anticipated to set new benchmarks for the region.
Furthermore, an 85,000 sq ft high-bay warehouse project at Blackwood Business Park in Caerphilly is close to completion, expected after Easter. Blackwood offers strong access to major road infrastructure including the M4.
These developments are emerging within a broader Welsh economic strategy that includes the Tech Valleys programme, the net-zero aims of the South Wales Industrial Cluster, and the recent designation of the Celtic Freeport, which offers customs and tax benefits to attract new industrial and logistics investment. The region’s manufacturing base has diversified from its mining roots to encompass automotive, aerospace, and a significant compound semiconductor cluster.
Surveyors in Wales anticipate industrial capital values to rise marginally in the first quarter of 2026, while Knight Frank forecasts average rental growth in Wales at 2.6% for the year, with Cardiff projected at 2.7%.
