City office lettings continue to soar

OFFICE lettings in Cardiff have soared this year thanks to major deals struck in the city.

In the first three months of 2017, new figures show commercial office lettings were up 57% on the same period last year.

The rise – from 95,000sq ft in the first three months of 2016 to 150,500sq ft this year – was largely fuelled by two major deals in the Welsh capital.

These included Cardiff University’s School of Journalism move to its new HQ at Two Central Square, which will be completed in summer 2018.

And Network Rail has agreed a letting of newly-refurbished space at St Patrick’s House, at the rear of Cardiff Central Railway Station.

Tim Lawley, associate director at Cooke & Arkwright – the property agents who released the data – said commercial office deals should continue to rise for the remainder of the year. This would be thanks to deals such as the Government Property Unit, which could see a new £100m tax office built in the centre of Cardiff, on the derelict site of the Echo’s former Thomson House offices on Havelock Street.

He added: “With the impending Government Property Unit deal, 2017 should be a strong year.

“Quarter-on-quarter, the performance in 2017 is ahead of 2016, which itself was an outstanding year for commercial lettings.

“While the 2017 increase so far is less dramatic than in several quarters in 2016, it nonetheless shows that the market is not slowing down.

“The pre-let activity at Central Square, and the development at Capital Quarter, are evidence of the continued demand for high-specification ‘Grade A’ space.

“This strong demand is steadily driving up Cardiff’s rent per square foot.

“But while the latest figures are encouraging, they are largely a result of companies already residing in Wales moving to bigger premises.

“Cardiff must continue to position itself as an attractive office location for companies outside of Wales, in order to reach the high levels of growth experienced in other outward-looking cities like Birmingham and Bristol.

“In addition, the figures show the importance of ‘Grade B’ stock in the market. There continues to be strong demand for this quality of office space, particular for smaller requirements.”

Cooke & Arkwright was recently named the overall winner for Wales in the Estates Gazette most active agent competition 2016, having advised on a number of high-profile deals, including the acquisition of House of Fraser in Cardiff by Rosette Merchant Bank on behalf of Middle Eastern investors.