The Welsh Government is investing millions of pounds in building a huge new industrial unit in Ebbw Vale.
Work will start later this year on the 52,582 sq ft project at the 30-acre Rhyd y Blew site the Welsh Government owns in the town.
The £8.5m funding for the project comes from the £100m it committed back in 2017 for its decade long Tech Valleys initiative, after opting not to back the proposed Circuit of Wales project in Ebbw Vale.
To date some £39m of funding, including the latest project, has been committed to Tech Valleys - which aims to capitalise on the opportunities arising from the fourth industrial revolution, particularly in the areas of 5G, battery technology, digital and cyber research and application.
While there is a lack of quality grade A industrial space in South Wales for tenants, should the Welsh Government be intervening in the marketplace and displacing potential private sector activity?
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A spokesman for the Welsh Government said: "It is part of our commitment to help create employment opportunities for people in all parts of Wales, we have an important role to play in ensuring a supply of commercial property is available across the country. This helps meet demand from indigenous businesses and inward investors who want to invest here and create jobs in our communities.
“We do not seek to compete with the private sector. Rather, we seek to engage them through the preparation of investment-ready sites for development and grant support to deliver buildings. However, our economic action plan sets out the commitment to intervention to bring forward commercial sites and premises, where it’s considered necessary to achieve Welsh Government policy objectives.”
Leading industrial property chartered surveyor, Chris Sutton, believes the Welsh Government is right to intervene pointing to market failure to develop new industrial space away from the M4 corridor in South Wales. He said while rents were rising, this was not enough to encourage speculative private sector development due to rising construction costs.
He added “I think this investment(Welsh Government) is good news as firstly there is strong demand, but a lack of quality grade A industrial space. Away from the M4 corridor there has been an absence of private sector speculative development over the last 20 years north of Taff’s Well.”
However, he said that potential tenants would also be looking for the right skills base and infrastructure, from transport to digital, before committing to space.
The contract to build the industrial unit, currently known as RYB1, has been awarded to Jones Bros. It will be built to BREEAM excellent standards with the intention of being carbon neutral when operational in 2023. It will comprise manufacturing or production space with two-storey open-plan office accommodation and a dedicated secure service yard and loading area.
Acting on behalf of Welsh Government commercial property consultancy, Knight Frank, is marketing the speculative building and the wider Rhyd y Blew land site on behalf of the Welsh Government. Funding of £1.6m has enabled the construction of infrastructure including roads and services to be completed. The site sits within the Ebbw Vale Enterprise Zone.
Neil Francis, head of logistics and industrial division at Knight Frank in Cardiff, said: “The RYB1 unit should be attractive to a wide range of businesses, with its modern design, green credentials and location close to the Heads of the Valleys road.
“It will deliver much needed grade A accommodation to help meet the very strong levels of demand in the market, and Welsh Government is to be commended for having the confidence to speculatively develop the building.”
Knight Frank said companies in the automotive and food sector have already expressed an interest in the development, which also sits within the Ebbw Vale Enterprise Zone.
It is seeking purchasers for a range of plots at Rhyd y Blew. Mr Francis said: “Rhyd y Blew is one of the largest development sites immediately available in South Wales and is designated as a mixed-use site.
“While it is envisaged that the land would be developed as a manufacturing site it could also be used for other employment purposes such as distribution and warehousing – or could provide an ideal site for an office park.”
Economy Minister Vaughan Gething said: "The Welsh Government is committed to creating a fairer, greener and more prosperous Wales. A key part of that is sharing prosperity more equally with better jobs closer to home.
“Our support for this investment ready unit on a strategic industrial site is a clear example of us delivering on that ambition. We will continue to drive and support more high quality employment opportunities and skills development for local communities.
“We are exploring every opportunity to support the growth of our economy as we continue to rebound post-pandemic. The development of these new premises will compliment the huge Welsh Government investment in the dualling of the A465 Heads of the Valleys road.
“This further investment should help provide confidence for further developments in the Tech Valleys area. We believe that this can become a globally recognised centre of excellence for new technologies and the advanced manufacturing sector together with the wider South East Wales region that is also rich in potential.”
Blaenau Gwent County Borough Council’s executive member for place and regeneration, John Morgan, said:“This is very welcome news. We have worked hard to attract investment in Blaenau Gwent and I am very pleased to welcome this major investment in the area.
“I am certain it will provide a great base for any businesses looking for premises on a modern strategic site and I am equally confident it will generate local employment opportunities in high-value businesses.”
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