South Wales Industrial Market is Growing
The slow down in property prices and retail spending during the first part of 2008, has not prevented strong demand for new warehouse space in south Wales, according to leading national commercial property consultancy Lambert Smith Hampton. Its south Wales industrial property division has expanded from two to five members in 2008 to cope with demand with 5.8 sq ft of industrial property space taken up in the region during 2007.
It is distribution property that is mainly driving speculative industrial property development according to LSH’s head of south Wales industrial division, Jason Thorne: “In east Cardiff, Aldi is shortly to develop a new 340,000 sq ft regional distribution centre on 28 acres. This development, in addition to Amazon’s 800,000 sq ft and Home Retail Group’s 750,000 sq ft warehouses, confirms that south Wales and Cardiff have the ability to supply new distribution capacity for big names.”
At Severn Crossing Distribution Park near Newport, Frontier Estates is speculatively building a 180,502 sq ft distribution facility to complete with schemes on the Bristol side of the River Severn.
In Swansea, however, market growth has come from a mixture of both new warehousing and industrial property refurbishment. Rob Camm from the LSH Swansea office explained: “Large scale buildings for refurbishment such as the Alcoa premises and the Walkers Crisps Factory on Carmarthen Road, as well as the Visteon premises have been attracting considerable interest to the area, but good quality new buildings are badly needed. This will be partly addressed by pipeline developments at Swansea Vale, Baglan and Swansea West Business park, but these sites alone with not satisfy demand and we’re confident further speculative schemes would easily find occupiers.”
The growth of industrial and warehouse developments in regions such as South Wales is explained in LSH’s new National Industrial and Distribution Report 2008. LSH’s head of research Dr Arezou said: “ New corridors of industrial activity are emerging as supply pressures tighten in the ‘Golden Triangle’, opening up parts of the country where land proximity to the motorway remains key but the industry is increasingly on the look out for sites with good access to the rail network and port connectivity. This trend is set to continue as occupiers seek to avoid congestion on the road network, escalating fuel costs and to reduce the carbon footprint of their supply chain. Environmental standards for buildings are also on the up, partially in response to new legislation, but also as demand for ‘green sheds’ intensifies.”

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