Dan Smith, director of Newport based M4 Property Consultants, explains that in the commercial property industry, a ‘shed’ is a slang term for an industrial / warehouse building and has outlined below the current dynamics of the local industrial property market.

Given the much-reported global impact of Covid on the economy, you could be forgiven for thinking that us industrial letting agents have been pretty quiet.

However, that is certainly not the case, and demand for these buildings has been astonishing over the last 12 months. Commercial property agents across the region have been experiencing very strong demand for industrial space of all sizes and from a diverse range of companies operating in the industrial and logistics sectors.

It was pleasing to note recent figures produced by the Industrial Agency Society for South Wales backed up our experience. IAS recorded industrial take up across South Wales for quarter one of 2021 reached a total of 959,917 sq ft over a total of 84 deals.

To put this into perspective, take up represented an approximate 270 per cent increase on the same period last year (Q1 2020) and circa 57 per cent of the H1 2020 take up, albeit this period last year included the Orb Works in Newport (762,485 sq ft) which significantly boosted H1 figures. There were a total of five deals over 50,000 sq ft, with the majority of deals being in the sub 10,000 sq ft bracket.

M4 Property Consultants were involved in the second largest deal of the quarter, selling the former Tinmasters property on Severnbirdge Industrial Estate, Caldicot. The unit is circa 87,000 sq ft and was sold and completed within four months of instruction, achieving a higher selling price than several other agents had suggested was possible.

We also finalised and completed the sale of the former Sebden Steel on Felnex Industrial Estate in Newport during the first quarter. More than 15,000 sq ft on an acre of ground, the unit was always likely to secure significant interest. The unit was put under offer after the first day of viewings with multiple offers in excess of asking price received from cash rich buyers.

It’s not just larger units for sale that are generating interest. The busiest part of the market is for those seeking industrial space of less than 5,000 sq ft to rent. We are averaging between five and 10 enquiries a week for this size space in Newport, Cwmbran or Chepstow areas. However, having completed numerous deals over the last few months in this size bracket, unfortunately we have very little, if anything, to offer would be tenants.

Developers are now looking at the local market forces and recognising the lack of available stock and continued demand is resulting in increased rents. As a result, this is now making industrial development a more realistic prospect. Hopefully, we will see some of this come to fruition in the next six months. We are also working with farmers who are seeking to repurpose agricultural buildings to meet the needs of industrial property occupiers.

There is no doubt that the industrial sector is the busiest within the commercial property field and we would suggest it is booming. However, the lack of available units is already a major issue and one that needs to be addressed if we are to continue to grow the local economy and provide jobs for local people. We desperately need more sheds!