By Liza Helps, Property Editor, Logistics Matters

SECURING THE right space, of the right grade, in the right location in the Southwest, is likely to be a challenge. According to the latest Knight Frank LOGIC report looking at industrial and logistics space in units over 50,000 ft2, availability is constrained by stock quality.

Knight Frank Partner and Head of UK & European Industrial Research Claire Williams says that while there is 4.5 million ft2 of existing space: “Availability remains heavily skewed towards lower quality second hand accommodation, with approximately 2.6 million ft2 comprising Grade -B or worse facilities.

“This underscores both the acute shortage of readily available, high quality fitted space and the growing volume of stock that is increasingly at risk of functional and ESG related obsolescence.”

Figures from property analyst CoStar bear this out especially when it comes to units over 100,000 ft2. Director of Market Analytics Grant Lonsdale notes there are only seven buildings available over 100,000 ft2 that have been built in the last three years out of a total of 26 units.

The vast majority of space, as well as being made up of older stock, is also smaller with more than 1,000 units sub 50,000 ft2.

The availability of Grade A big box floorspace space is skewed by the fact that a single property makes up nearly 20% of the offer. This is Panattoni’s massive 915,000 ft2 plus Unit S915 at its 370-acre Panattoni Park Swindon, which is due to hit practical completion shortly.

The 916,982 ft2 cross dock warehouse comprises an 890,444 ft2 warehouse with 21m eaves and 125 dock and eight level access doors served by yards of up to 115m. In addition, the facility will have 240 trailer spaces. There will be 24,310 ft2 of Grade A office space which includes a 1,928 ft2 entrance area and hub offices totalling 5,295 ft2. There is a also a separate 300 ft2 gatehouse and car park for 700 plus cars.

It has been constructed by contractor Winvic to BREEAM Excellent and EPC A+ ratings unit and will be delivered to a Net Zero Carbon in Construction standard (aligned with the UK Green Building Council 2019 Framework Definition).

As well as a 7.3Mva power supply the building features a PV roof-mounted array capable of providing 315kwh/year at base build with potential to increase. Joint agents on the scheme are Savills and DTRE.

There are two other very large properties on the market or due to shortly reach practical completion. These include Equation and BGO’s Matrix586 totalling 586,288 ft2. The cross dock property has 21m eaves, as well as 71 dock and eight level access doors served by yard ranging from 50 – 65m deep with parking for up to 95 HGVs. It has 5.5 MvA of power availability. The property has been built to target BREEAM Excellent and an EPC A rating. Joint agents are JLL and DTRE.

Then there is also Panattoni’s 407,467 ft2 warehouse at its two unit Panattoni Avonmouth scheme. The property known as Avonmouth 410, is on the market at a rent of £10.25 per ft2. It has achieved a BREEAM Excellent and EPC A+ rating, and benefits from standard sustainability features such as a roof-mounted solar PV array, 15% warehouse rooflights and EV charging points. Joint letting agents are Colliers, JLL, DTRE and Lambert Smith Hampton.

For some the distinct lack of available buildings of the right quality has meant that the stellar take-up figures of 2025 have not materialised in 2026. Indeed, according to Knight Frank there were no lettings over 50,000 ft2 in the first quarter of the year. Williams notes: “Enquiry data indicates this is not demand-driven. Knight Frank’s Bristol office is currently tracking over 4 million ft2 of active, identifiable occupier demand across the region. Instead, the slowdown reflects the South West’s position in the development cycle, with recently delivered speculative space largely absorbed and further supply still under construction, resulting in limited availability of high quality, immediately deliverable stock.”

Panattoni’s Southern England & London Head of Development, James Watson says: “There is space in the market, but there is not always enough of the right space in the right locations. Large-scale, high-quality, immediately available accommodation remains limited, particularly for occupiers with specialist requirements around power, security, yard depth, building height, resilience, or proximity to strategic infrastructure.”

As one of the very few currently building speculatively in the region that is why he feels speculative development remains important. “Occupiers increasingly need certainty of delivery, and in many cases they cannot wait several years for a bespoke scheme to come through planning.”

Panattoni is currently underway with a further 1.2 million ft2 of speculative space at its Panattoni Park Swindon scheme which is scheduled for completion in Q2 2027.

While not much take up happened in the first three months of 2026, Russell Property Consultants, Industrial & Logistics agent Josh Gunn says: “There’s some good deals being done but have we got the frequency and number of them that we had – no we haven’t.”

He adds this is probably a combination of a lot of factors not least that a lot of space was taken up in 2025 but also alluding to macro economic issues and geopolitical events which may or may not have given occupiers a pause for thought.

That being said, JLL Director Chris Yates notes: “We’ve seen a reinvention of certain geographies like Swindon over the past 2-3 years, where the loss of Honda and its supply chain have been replaced with a number of defence-related occupiers taking space.”

Watson adds: “Swindon has a compelling combination of attributes. It has strong M4 connectivity, a skilled industrial workforce, proximity to Bristol, Reading, London, and the wider South West, and access to important defence infrastructure, including Salisbury Plain and MOD activity across the region. It also has a growing ecosystem of drone, autonomy, and defence technology businesses. TEKEVER, Flyby Technology, STARK and Munn Dynamics have all been associated with the town’s emerging drone and uncrewed systems cluster, while Government has previously highlighted TEKEVER’s plans for a major UK drone production facility in Swindon.”

The recent 15-year letting of Panattoni’s S545 unit totalling 545,414 ft2 to the MOD at its 7.2 million ft2 Panattoni Park Swindon scheme as a drone testing facility, has only added weight to demand.

Gunn says: “There are quite a few more drone related deals looking to land in that Swindon cluster and I think we will see more defence related requirements coming round. Obviously the delay in publication of the Defence Investment Plan is not ideal.”

However, there is no doubt that defence spending is something that will have to be dealt with by Government very soon whether in an announcement prior to the early July NATO summit in Ankara, Turkey, or swiftly thereafter by Prime Minister-in-waiting Andy Burnham.

Gunn notes: “These [defence] companies are big corporate businesses, they’ve got to go through and make sure all the numbers work, ultimately if they’re not getting anything back from procurement to the MOD, then they are not going to pull the trigger.”

It is interesting to note that many of the defence related occupiers particularly those supplying defence components are not in fact looking to occupy the large XL warehouses. They instead are looking to midbox opportunities close to a major defence contractor and are clustering – as has been seen in Swindon.

According to Savills new Prime Midbox report transactional activity for prime midbox units in the South West and Wales, in Q1 2026 totalled 295,000 ft2 across six transactions, up 59% year-on-year and 36% above the pre-pandemic average of 216,000 ft2. 

Savills Bristol Industrial Agency Director, Jack Davies says: “We are witnessing increased demand across the whole spectrum of mid-box sizes, with occupiers becoming increasingly sophisticated in terms of demands for functionality and flexibility built in at design.”

While speculative big box schemes are not exactly prevalent across the region, companies such as developer Indurent are locking onto the midbox demand piece. At its 78.2 acre Indurent Park Chippenham at junction 17 of the M4 motorway, the developer has six units, five of which range from 23,828 ft2 to 111,878 ft2 as well as one of 343,754 ft2. The scheme is targeting BREEAM Excellent and an EPC A rating. Joint agents are DTRE and Alder King.

Recently NFU Mutual acquired a development site in Swindon for an 80,000 ft2 midbox scheme. THE SITE, totalling 5.3 acres, was acquired from Marq Logistics for £2.7 million and will be built speculatively with newly appointed development partner Graftongate.

Construction is due to commence shortly with practical completion targeted for Q1 2027.

NFU Mutual Property Fund Manager Alex Pocock says: “This acquisition offers a compelling opportunity to deliver a prime logistics asset in a well-established location, underpinned by strong occupier demand.”

The site is located on the A419, near Junction 15 of the M4 motorway. It has planning permission for an 80,927 ft2 BREEAM Excellent and EPC A rated facility with 68,516 ft2 warehouse with 12.5m eaves and 16 dock and two level access doors served by a 33.8m yard with parking for seven HGVs. Planning details include 6,803 ft2 of office space as well as a 1,269 ft2 office under croft. NFU Mutual was represented by Newmark, with Cogent Real Estate acting on behalf of Graftongate.

Wales in Focus

According to Knight Frank research, availability of industrial and logistics warehouse space in in Wales now stands at 4.6 million ft2 – compared to 3.7 million ft2 at the end of 2025. Although almost 900,000 ft2 is available in one building: the former Wilko facility at Gwent Europark in Magor which is being marketed by M4 Property Consultants.

Developer Indurent is leading the way with its 350,000 ft2 speculative mid box scheme in South Wales known as Indurent Park Newport offering five units from 44,071 to 115,045 ft2. The properties are being built to target BREEAM Excellent and EPC A ratings with 12.5m eaves and 10% roof lights. Ther is up to 8MvA of power available across the wider scheme.

Knight Frank partner Neil Francis says: “This new space will start becoming available from Q4 2026 and there is good early interest. Once secured, the quoting rents will set new headlines in the region.” There is also 85,000 ft2 of high-bay warehousing in Blackwood Business Park, Caerphilly being brought forward consisting of a unit of 59,287 ft2 with 10m eaves and 12 level access doors with adjoining units that could be amalgamated. Joint agents are Jenkins Best and Knight Frank.

Looking at take up in the market, first quarter take up for industrial units over 50,000 ft2 reached 344,882 ft2 comprised two lettings and two sales, with the largest deal being the sale of the 111,000 ft2 former Liberty Steel facility in Tredegar which was sold to an existing South Wales based manufacturer which is going to use it for a second facility in the region.

The second sale was the disposal of Unit 1 on Hirwaun Industrial Estate with Cooke & Arkwright acting for the vendor. The 97,300 ft2 industrial facility was acquired by the Welsh Government for refurbishment and future high‑quality manufacturing facility and distribution.

Francis adds: “The market can currently best be described as inconsistent, with the general levels of activity being better than the take up figures suggest.” The research said the take up was around 50,000 ft2 higher than the same period last year, but down from the 675,000 ft2 achieved in the final quarter of 2025.

It is the smaller end of the market where activity has been most concentrated, according to Cooke & Awkwright’s director of Office and Industrial Agency Ben Bolton.

Total take‑up across Wales during the first quarter reached 677,154 ft2, in 69 transaction with 57% of all deals below 5,000 ft2, highlighting the continued importance of SME occupiers and regional businesses in driving market momentum.

At the end of the first quarter there was some 800,000 ft2 under offer in units over 50,000 ft2 as well as a considerable number of smaller units also going under offer. Bolton says: “These figures reinforce the market’s resilience despite a more selective trading environment.

“While overall take‑up was 29.4% lower than the final quarter of 2025 (959,493 ft2), volumes remain 26.1% higher than the first quarter of 2025, underlining the strength of demand when viewed against longer‑term trends rather than a single, unusually busy quarter.”