Take-up has surpassed the long-term average by 29%
Supply
Arguably, the most positive supply and demand dynamics are within the South West and Wales, with supply falling by 21% over the last twelve months, now standing at 6.17 million sq ft across 22 units. Of this, 3.8 million sq ft is available in the South West, and 2.3 million sq ft in Wales, representing vacancy rates of 8.98% and 2.92%, respectively.
An analysis of available supply by grade shows that 38% is newly built speculatively developed grade A space, 4% is second-hand grade A space, 14% is grade B space, and 44% is low-quality grade C space. A significant portion of grade C space is attracting interest from data centre occupiers due to its large power availability, despite being less suitable for many modern occupiers. The largest unit available, the former Wilko Distribution Centre in Caldicot, comprising 920,000 sq ft, is under offer to a data centre occupier.
In terms of unit sizes, there are ten units available in the 100,000–200,000 sq ft size band, six in the 200,000–300,000 sq ft size band, three in the 300,000–400,000 sq ft size band, one in the 400,000–500,000 sq ft size band, and two over 500,000 sq ft.
Currently, 27% of the available supply is under offer and is expected to exchange in H1 2025.
Take-up
Take-up in the South West and Wales has surpassed the long-term annual average by 29%, totalling 3.39 million sq ft across twelve transactions. Typically, the region sees 2.64 million sq ft transacted across eleven units annually. Transactional activity in Wales has reached 2.17 million sq ft, while in the South West, it stands at 1.22 million sq ft.
In terms of specification, 76% of space transacted this year has been second-hand space, 7% has been new speculatively developed space, and 17% has been built-to-suit space. By grade, this equates to 24% grade A space, 5% grade B space, and 71% grade C space.
In 2024, there have been seven transactions within the 100,000–200,000 sq ft size band, four in the 200,000–300,000 sq ft size band, and one unit over 500,000 sq ft. According to the long-term average, the region typically sees seven transactions in the 100,000–200,000 sq ft size band, three in the 200,000–300,000 sq ft size band, one in the 300,000–400,000 sq ft size band, and one over 500,000 sq ft.
The alternative sector, which includes data centres, film studios, and other unique occupiers, has acquired the majority of space this year, accounting for 61% of total activity. Third-party logistics firms have accounted for 16%, and manufacturers have accounted for 14%.
Development pipeline
There are currently two units under speculative development within the South West, totalling 450,362 sq ft. Both of these units are being constructed in the 200,000–300,000 sq ft size band.