New bus station at heart of grand transport plans
SION BARRY Business editor sion.barry@walesonline.co.uk WORK to build Cardiff’s long-awaited bus station is set to begin early next year, as part of a massive new development that will include new offices and 400 apartments.
The project, in the heart of the city centre, has been beset by delays.
But yesterday it was announced a new joint venture has been forged by Cardiff council, the Welsh Government and developer Rightacres, to finally deliver the Interchange project in the heart of the Welsh capital.
And it could pave the way for the muchneeded redevelopment of Cardiff’s ageing central railway station.
The joint venture is specifically being established to deliver projects related to the South Wales Metro transport scheme.
A new bus station at Central Square, linked to neighbouring Cardiff Central Railway Station, is seen as a key Metro-related scheme.
It aims to create closer links between rail, bus and coach services, as well cycle users, in the city and the wider Cardiff Capital Region.
The joint venture will be known as the Metro Delivery Partnership.
It will look to recoup its investment – with a profit margin – by selling the scheme on to an institutional investor.
Some of the proceeds could then be used to help enable the redevelopment of Cardiff Central Railway Station. The Interchange scheme consists of: The bus station with retail units on the ground floor; 110,000 square feet of new office space; 400 private apartments that will be available for rent; and 250 car park spaces above the bus station. The entire project would take around two years to build.
Cardiff council’s cabinet it expected to give the go-ahead for the joint venture at a meeting on Wednesday.
Cabinet Secretary for the Economy and Transport Ken Skates yesterday confirmed the Welsh Government’s intention to back the venture.
He told the Senedd: “Now is absolutely the right time to enhance the station so it can absorb the growing demand for rail travel, cope with an ever expanding calendar of major events and of course set the tone for the forthcoming South Wales Metro.
“We, along with the council, have a vision for the site around Cardiff Central to become an integrated transport hub, providing seamless integration between trains, buses, coaches and Metro, allowing easy access to pedestrians and storage facilities for cyclists.
“This joint venture can deliver all of these ambitions for the interchange, starting with the redevelopment of the bus station, and for that development to now include high quality space capable of attracting the type of major inward investors who can help us further the ambitions of our brand new economic action plan.”
The leader of Cardiff council, Huw Thomas, and cabinet member for investment and development, Russell Goodway, have played a key role in getting the new venture agreed with Rightacres and the Welsh Government.
Coun Goodway said: “Huw Thomas has been working extremely hard behind the scenes, not only to bring forward a plan which will deliver Cardiff’s new bus station, but to bring forward a plan that will transform and modernise the whole Central Interchange area.
“There is no doubt that the project had
stalled but this new partnership allows the council to progress with the bus station development without further delays and will enable Cardiff’s new office quarter at Central Square to be properly finished off.
“I said from the outset that we will need to be flexible to deliver this project, using a market-led approach to generate the money we need. This is precisely what we are doing.”
The joint venture means that the office part of the scheme has been reinstated into the Central Square project without the need for having a tenant already signed up.
As reported in the Echo at the time, the previous revised scheme had an emphasis on student accommodation above the bus station, with the possibility of a hotel.
In the summer, Cardiff council’s cabinet undertook a review of the scheme and its funding model, culminating with the establishment of Metro Delivery Partnership.
There are a number of leading financial services firms understood to be eyeing Cardiff for major inward investment projects, which could potentially take office space in the scheme.
Starting work on the bus station can use existing planning consent for the Interchange scheme at Central Square. However, the overall new scheme will need a new planning application.
The council has already provided funding of around £20m – which includes acquiring land and buildings required to make way for the new bus station – for the wider Central Square project.
It now stands to secure a healthy return on that investment.
The value of the scheme has not been disclosed, but it is understood it could be in the region of £130m with around £20m for the bus station.
The value of the Welsh Government’s contribution to the delivery of the scheme through Metro Delivery Partnership, has yet to be disclosed.
The funding of the project could also be supported by the scheme being “forward sold” to a financial institution.
Such a model has been successfully used by Rightacres with Legal & General to develop projects at Central Square, including the new UK Government public sector hub which is currently under construction.
But there are other investors that could potentially provide forward funding. These include Credit Suisse, which recently acquired the 2 Central Square office building at Central Square for £60m, and American property investor Global Mutual which is acquiring the Cardiff Waterside office estate in Cardiff Bay from Aviva for around £86m.
And Aviva itself could potentially be in the market for other property investment opportunities in the city.
Coun Goodway said: “It is proposed that the council’s investment in the special purpose vehicle will be limited to the costs we’ve incurred to date.
“This would encompass land assembly, planning and design and other predevelopment costs.
“Moving forward, we believe partners will be able to recover their investment once the residential units and office space finds customers. We are hopeful this will result in all of the public investment being recouped.
“The Metro Delivery Partnership, as it will be known, is designed to have a longer life and a greater purpose than the delivery of the bus station alone.
“Once the bus station building is delivered and sold, it is intended that the money is recycled to deliver a second phase of development, including the modernisation of Cardiff Central.”
The joint venture is effectively a joined-up approach to land ownership to deliver Metro-related transport infrastructure projects.
It will also look to deliver other Metro related schemes, including improvements to Cardiff Central Railway Station. Improvements are needed to ensure it can cope with rising passengers numbers that will be further boosted when the next phase of the Metro, with electrification of the Valley Lines, is realised.
But the redevelopment of Cardiff Railway Station will require a significant contribution from the UK Government due to its projected cost of at least £100m.
The Welsh Government and Cardiff council are continuing to press the UK Government to back a project that is not a devolved matter.
Cardiff council could provide a funding contribution for the redevelopment of Cardiff Central Railway Station – which is a key transport hub for the whole of the Cardiff Capital Region – from the £1.2bn City Deal for the region.
However, backing from the City Deal would need approval from all other nine council leaders in the cabinet for the Cardiff Capital Region.
The new bus station will be operated by the Welsh Government’s transport body, Transport for Wales.