Research suggests growing turbulence in the Middle East has influenced perceptions of Wales’ commercial property market.
The Royal Institution of Chartered Surveyors documented reduced interest from tenants and investors in Wales’ commercial real estate segment during the opening quarter.
Richard Baddeley, who runs Richard Baddeley and Company based in Conwy, observed that ahead of the Senedd elections, ambiguity hangs over both the Welsh and national economies. He noted that existing enterprises are reluctant to grow, and incoming investment continues to concentrate in the main urban centres of South Wales, comprising Cardiff, Newport and Swansea, together with Deeside in the northern part of the country. He added that demand for industrial buildings in the north continues to struggle, and supply remains tight, with Wrexham and Deeside being the notable exceptions.
A net balance of minus 17 percent of respondents from Wales reported falling tenant demand.
While industrial real estate saw slight growth, demand for office accommodation remained flat and retail space demand fell sharply.
Sentiment among investors also weakened, with a minus 18 percent net balance reflecting fewer enquiries.
The survey forecasts modest drops in capital values across all sectors, with net balances of minus 51 percent for retail and minus 11 percent for offices.
Rents are also expected to come under pressure in the coming months.