Commercial property in Wales had a significant boost during Q3 in 2012. The second quarter saw the deal value in this part of the country at a total of £37 million. Yet in the next quarter this had shot up to £90 million. This amounts to an increase of a huge 143% from one quarter to the next.
Most of the deals which took place in the commercial sector were relating to retail deals and properties. Indeed the retail sector alone saw a rise from £36 million worth of deals to £77 million. This amounted to a rise of 114% overall. Interestingly – and perhaps predictably – the same could not be said of the industrial property market, which remained fairly steady over the same period of time.
But while the overall picture for commercial property in Wales was incredibly positive, a closer look at the figures reveals the rise was due to a mere handful of specific deals. These concerned sites in Pontyclun, Cardiff and Swansea. Yields for these sites ranged from 5.5% to a little less than 19% for one site in Cardiff.
It will be interesting to see if these figures hold up over the next quarter, particularly as the most successful area for development is of course London in the South East of England. Wales is not the first place you would think of when it comes to a buoyant property market at present. Indeed aside from London and the South East the rest of the UK is struggling to produce good results in this respect.
One key factor to bear in mind – and one that could see a drop in the commercial property market in Wales in the future – is that the huge rises were created by several specific deals. This is in contrast to being driven by lots of smaller deals, which would be an easier situation to maintain for the short term. In reality, if no large deals are made in the next three month period, the picture next time could be a very different one indeed.
However we must remain positive and hope that Welsh commercial property owners (and those looking to buy) are able to secure the deals they want. For those with the funds to invest in a significant property or site, the Welsh property market is still looking rather promising.