New city centre building is sold in £56.5m deal

A LANDMARK new city centre building has been sold in a £56.5m deal.

The sale of 2 Central Square, part of the massive regeneration taking place in front of Cardiff Central Railway Station, marks one of the biggest property deals struck in Wales this year.

Property developer Rightacres and Legal and General (L&G) have sold the office block to banking giant Credit Suisse.

The building, which is currently under construction next to the site of the next BBC Wales HQ, will be occupied by law firm Hugh James and the Cardiff School of Journalism, Media and Cultural Studies.

It is expected to be completed next summer.

The deal represents the latest milestone in the wider Central Square regeneration scheme, which eventually will see one million sq ft of new office, residential and retail space built.

Rightacres is developing the scheme in partnership with L&G, which is backing the project to the tune of £400m.

Earlier this year L&G sold the neighbouring 1 Central Square office block to European real estate and fund manager Aerium in a £51m deal.

The deal comes as work is now under way on the next phase of Central Square – a new tax office headquarters building for HMRC in Wales.

HMRC, which currently has its main Welsh tax office in Llanishen, has signed up to a new 266,000 sq ft building at 6 Central Square in a major pre-let deal,

It is scheduled for completion in late 2019, with HMRC moving into its new offices – which will be home to around 3,600 staff – from 2020.

Also joining them will be the Wales Office, with its current Cardiff Bay office moving into what is being described as a new public sector hub.

It opens up the prospect of the hub being used for cabinet meetings of the UK Government.

A number other non-devolved civil service operations in Wales could join HMRC – taking staff numbers to around 4,000.

Other departments that could join HMRC and the Wales Office at the hub, include the likes of the Ministry of Justice and the Department for Work and Pensions.

Rightacres also has plans for a further 180,000 sq ft office building next to the HMRC building, which could also house other public sector departments.

Laura Mason, director of direct investments, Legal & General Capital, said: “The transformation of Cardiff Central [Square] has been phenomenal and Legal & General’s continued funding commitment alongside the development expertise of our partner Rightacres will see the project evolve at an extremely impressive rate.”

Chief executive of Rightacres, Paul McCarthy, said: “Getting a global player like Credit Suisse to invest at this level in Wales is great recognition of the Central Square development and Cardiff as a prime real estate location. The development momentum continues to build and the level of interest from both occupiers and investors continues to grow.”

Gareth Lloyd, partner at Knight Frank, who acted for Credit Suisse, said: “The acquisition of 2 Central Square by Credit Suisse is further evidence that Cardiff is now one of the most sought after destinations the regions for both domestic and overseas investors.”