Wales’ commercial property: A market of divergence and opportunity

Scott Keddle - Head of Commercial Property, Harding Evans

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The commercial property market in Wales has experienced a period of fluctuation in recent years, reflective of the wider economic conditions across the UK alongside regional structural changes. While some sectors face subdued demand, others, particularly industrial and logistics, continue to demonstrate resilience, shaping a mixed but gradually stabilising landscape. Scott Keddle, Head of Commercial Property at Harding Evans, takes a closer look.

A defining feature of the Welsh commercial property market is the divergence between property sectors. Industrial property has emerged as the strongest performer, driven by sustained demand for logistics, distribution, and manufacturing space.

Survey data from the Royal Institution of Chartered Surveyors (RICS) indicates that industrial assets have consistently outperformed office and retail properties in both occupier and investor demand.

In early 2025, a net balance of surveyors reported rising investor demand for industrial space, highlighting its attractiveness in comparison to other commercial property classes.

The strength of the industrial sector is particularly evident in South Wales, where the majority of commercial property stock is industrial in nature.

Industrial assets account for significant proportion of the region’s commercial property inventory, and vacancy rates remain relatively low compared with other sectors.

These properties benefit from their proximity to transport corridors such as the M4, supporting logistics operations and manufacturing activity.

In contrast, the office sector has faced ongoing structural challenges. The shift toward hybrid and flexible working patterns since the COVID-19 pandemic has reduced demand for large office footprints, particularly in secondary locations.

Survey evidence shows that occupier demand for office space in Wales has often remained flat or declined in recent quarters.

However, there remains a degree of resilience for high-quality, Grade A office space in major centres such as Cardiff, where businesses continue to seek modern, well-located premises but a shortage of available prime stock continues to constrain the market.

Retail property has also experienced mixed performance. The decline of the High Street is well documented and is no different across Wales, where it has been affected by long-term structural pressures, including the growth of online retail and changing consumer habits.

As a result, demand for retail space has been weaker than other sectors, and some locations have struggled with vacancy and declining footfall.

Nevertheless, certain segments such as convenience retail, leisure-led developments, and areas with a higher number of independent businesses, have shown greater stability and occupancy levels.

More recently, overall demand across the Welsh commercial property market has softened amid economic uncertainty, rising costs, and cautious investment sentiment.

By late 2025, surveyors reported a decline in occupier demand across all sectors, with expectations of weaker rental growth in the short term.

Despite this, the longer-term outlook appears more stable, with many market participants anticipating gradual recovery as economic conditions improve.

As the Welsh commercial property market continues to evolve, opportunities increasingly lie in understanding local dynamics, anticipating occupier behaviour, and navigating change with confidence. #

Whether advising investors, developers or occupiers, success depends on combining market insight with practical, commercially focused advice.

With a strong understanding of the Welsh market and a proactive, solutions‑driven approach, well‑advised clients remain well placed to identify opportunities and achieve their objectives in an increasingly selective environment.