A property expert has been looking at what’s in store for the South Wales commercial property market in 2021.
Rob Ladd, partner at Cushman & Wakefield, covering South Wales, said: “The economic impact of the Covid-19 pandemic and the uncertain outcome of Brexit negotiations remains a challenge and makes for an uncertain start to 2021.
“During 2020, the South Wales’ industrial sector saw the closure of Bridgend Ford and the failure of Quinn Radiators (Newport).
“The Welsh Government made two high profile positive announcements concerning Ineos (Bridgend) and Britishvolt (St Athan) but unfortunately both significant projects were eventually lost to France and Northumberland respectively. The Welsh Government’s focus must remain on continuing to aid the recovery of the economy and to minimise the rise in unemployment.
“Notwithstanding this, the logistics and industrial sectors have fared well during the last 12 months and, while we expect statistics to show that availability will increase in 2021, this will be heavily skewed by the previously mentioned two significant closures which will account for circa 2.6 million sq ft.
“Stripping these from the stats, the underlying trend remains very much one of reducing availability as supply levels fail to keep pace with take-up.
“Logistics and e-fulfilment in particular continues on its steep growth trajectory both in terms of take-up and rents and we expect this to continue into 2021 with some significant announcements of expansion in this sector.
“The one concern is the lack of high-quality modern facilities and the dearth of suitable sites for development, with the only notable speculative development under construction being 130,000 sq ft across two buildings at St Modwen Park in Newport.
“Last year brought a rapid change to how we will work in the future. Improvements in technology facilitated far more agile working.
“While we expect occupiers to review the amount of office space they occupy, it is acknowledged that the collaborative and social benefits of the physical office are important and we expect numbers to increase once it is again safe to commute.
“Better quality properties should be well placed to capitalise as occupiers crystallise their requirements and seek to ensure they secure the best available accommodation.
“The retailing sector will continue to be challenged. More CVAs are likely to be announced in the New Year and there will be a need to focus on the repurposing of some retail assets and improving the customer experience in physical shops to ensure the survival of town centres.”