30th July 2025
Commercial Property Market Outlook: South West & South Wales H1 2025
Agency & Commercial Development • Office Agency • Industrial & Logistics Agency • Trade, Roadside & Automotive Agency • Retail & Leisure Agency
Demand from defence, energy, logistics and high-quality office occupiers continues to drive growth across the region.
The South West and South Wales commercial property markets remained resilient and active through the first half of 2025, according to our latest Market Monitor report. Demand continues to be driven by key sectors including defence, security, energy and logistics, which are underpinning performance across the region’s industrial, office and retail markets.
Industrial Market: Supply Tight, Demand Growing
The industrial and logistics sector saw significant activity across both big-box and mid-box formats in H1 2025. Key regional developments reported strong take-up, with many buildings now let or under offer.
Despite this, supply remains constrained. One example is the recent completion and sale of the 22,400 sq ft Building C at Ashville Business Park in Staverton – a prime example of how quickly new, speculative space is being taken up.
“We’re seeing growing demand for larger format industrial buildings,” said Adrian Rowley, head of agency at Alder King. “While supply is tight, upcoming speculative developments are beginning to provide the larger buildings occupiers need.”
This supply-demand imbalance continues to push rents upward, particularly for both Grade A and high-quality secondary space in Gloucester, Bristol and Exeter.
Office Market: Polarisation Around Quality
In the office sector, demand is focused squarely on high-quality, ESG-compliant Grade A space. Occupiers are seeking better amenities, smarter layouts and sustainability credentials — and are prepared to pay for it.
“We expect prime city centre office rents in Bristol to rise to the early-to-mid £50s per sq ft,” added Rowley.
A landmark example in H1 was the completion of The Welcome Building — the largest speculatively-built prime office scheme in Bristol city centre for more than 30 years.
At the same time, good quality secondary office space is seeing increased take-up, especially in areas where new office development has stalled due to viability. This two-tier market is reshaping occupier behaviour and leasing strategies across the region.
Retail Market: Repositioning & Repurposing
The retail market continues to evolve. While High Street retail faces challenges, food and beverage operators remain active in the market. Both city and out-of-town retail schemes are increasingly being repurposed for alternative uses.
One standout scheme is the University of Gloucester’s city campus, where the former 215,000 sq ft Debenhams store is being transformed into a vibrant learning environment, set to open partially in Q3 2025.
Outlook for H2 2025 and Beyond
Looking ahead, we expect strong sectoral demand, limited new supply and a growing focus on ESG performance to maintain pressure on rents across all asset types. Meanwhile, repurposing under-used or outdated stock will become an increasingly important trend.
The region’s diverse occupier base and economic resilience continue to underpin a positive long-term view for commercial property across the South West and South Wales.
