Industrial space was the only commercial property subsector in Wales to see growth in occupier demand in the third quarter of 2026, according to the Royal Institution of Chartered Surveyors (RICS).
The RICS Commercial Property Monitor for Wales found overall occupier demand was subdued, with a net balance of -4% of Welsh respondents reporting a fall. For industrial space, a net balance of 20% reported a rise.
A net balance of -20% reported a fall in occupier demand for office space, and -11% reported a fall for retail space.
Investor demand fell for office and retail space but rose for industrial space.
Rents in Wales are expected to be broadly flat over the next three months, with office and retail rents expected to fall and industrial rents expected to rise. A net balance of -21% of Welsh respondents expect capital values to fall over the next three months.
Chris Sutton of Sutton Consulting Limited in Cardiff said: “There is a squeeze in the supply of both Grade A office and industrial accommodation, with good quality enquiries struggling for options to accommodate relocation or expansion plans. There is new development in the industrial sector, mainly along the M4 corridor, supported where appropriate by the Development Bank of Wales. In the office market, developer Rightacres has successfully refurbished office floorspace in central Cardiff for several Grade A occupiers.”
Tarrant Parsons, Head of Market Research and Analysis at RICS, said of the UK picture: “The latest survey results point to a more challenging backdrop for the commercial property market, with the investment side bearing the brunt of higher borrowing costs following the recent rise in gilt yields to their highest levels in almost two decades. As financing conditions have tightened, expectations for capital value growth have softened, particularly in the near term.”
