Booming of­fice mar­ket hits a 15-year high

South Wales Echo - - NEWS -

CARDIFF’S com­mer­cial prop­erty mar­ket is booming with 2016 see­ing the high­est take-up of space for 15 years.

Ac­cord­ing to prop­erty ad­vi­sory firm Sav­ills, some 670,000sq ft of let­ting deals were struck.

The level ex­ceeds the 615,000sq ft in 2015 and is 34% above the 10-year av­er­age of 500,000sq ft for the city.

The firm notes that the high level of take up was driven by an above av­er­age num­ber of large deals and pre-lets, in­clud­ing:

Law firm Hugh James tak­ing 100,000sq ft at Two Cen­tral Square

Motonovo Fi­nance tak­ing 71,000sq ft at One Cen­tral Square

HMRC tak­ing 54,000sq ft Brunel House

De­mand for Grade A space pushed rents up in 2016, with av­er­age head­line rents ris­ing by 14% over the year from £22 to £25 per square foot. It is an­tic­i­pated that Grade A rents will re­main at £25 per square foot in 2017.

Gary Carver, di­rec­tor of the busi­ness space team at Sav­ills Cardiff, said: “Take up of of­fice space in Cardiff reached ex­cep­tional lev­els in 2016.

“The at city ben­e­fited from many high-pro­file deals through­out the year and the emer­gence of the city as a tech­nol­ogy, me­dia and telecom­mu­ni­ca­tions hub.

“Look­ing ahead to 2017, One Canal Pa­rade and 3 Cap­i­tal Quar­ter are due to com­plete – re­duc­ing the de­mand pres­sure on Grade A space.

“The pro­posed 270,000sq ft prelet to HMRC in Cen­tral Square and two deals over 30,000sq ft which are ex­pected to com­plete in Jan­uary, will en­sure take up lev­els in 2017 re­main at the same high lev­els we saw in 2016.”

Sav­ills pre­dicts in­vest­ment into Cardiff of­fices reached £150m for 2016, against £136m in 2015, with over­seas buy­ers tak­ing par­tic­u­lar in­ter­est in larger lot sizes such as No 1 Cap­i­tal Quar­ter ac­quired by Golden Gate Cap­i­tal and the BT Data Cen­tre ac­quired by Kep­pell.

De­spite a slower sec­ond half of the year, prop­erty com­pa­nies and pri­vate in­vestors re­mained ac­tive, but were care­ful in stock se­lec­tion.

Ross Grif­fin, di­rec­tor in the in­vest­ment team at Sav­ills’ Cardiff of­fice said: “The Cardiff in­vest­ment mar­ket had a ro­bust year in 2016 with the city be­ing of in­ter­est to a broad cross sec­tor of in­vestors.

“Sen­ti­ment for the year ahead re­mains pos­i­tive and there is a per­cep­tion of greater value to be sought out­side of Lon­don and the South East.”

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