Industrial property take-up across Wales improved in the final quarter of 2025, with Cardiff continuing to play a central role in rental growth despite ongoing shortages of Grade A space.
New data from Knight Frank shows that Q4 take-up of large industrial units reached approximately 675,000 sq ft, an increase on the previous quarter but still below levels seen a year earlier.
The uplift contributed to annual take-up of just over 1.7 million sq ft across Wales, compared with 2.7 million sq ft in 2024.
Neil Francis, Head of Logistics & Industrial at Knight Frank in Cardiff, said constrained supply remains the key limiting factor.
“This drop from last year is at least partly accounted for by there being no available Grade A space in South Wales of this size throughout 2025.”
Availability across South Wales stood at 3.7 million sq ft at the end of the year, although much of it is secondary stock with limited redevelopment potential.
Despite this, confidence is returning to parts of the market. Francis said stalled enquiries and growing interest in pre-lets are encouraging new development, including further phases at major industrial parks in the region.
Cardiff’s position was further strengthened by a record headline rent achieved at the new 36,000 sq ft Axis 32 logistics warehouse at Junction 32 of the M4. The building, developed by LondonMetric Property Plc, was pre-let to FPS Distribution on a 15-year lease.
Knight Frank Associate Rhys Price said Cardiff is also among the UK’s strongest-performing locations for Industrial Outdoor Storage land.
“Our research shows that Swansea, Newport and Cardiff took the first three places in the latest national league table of annual rent increases for this category of land.”
Cardiff recorded annual IOS rental growth of 17 per cent, reflecting rising demand for flexible industrial and storage space close to the M4 corridor.
Price added that the outlook for smaller business units is improving, with several new schemes planned across South Wales in 2026.
Reflecting on the year, Francis said Knight Frank’s industrial team had completed more than 1 million sq ft of transactions for the second consecutive year, despite limited Grade A availability.
During 2025, the team handled over £13 million in sales and lettings generating more than £2.75 million per annum, underlining the resilience of the Welsh industrial market.