Prime five-acre site in middle of Cardiff still lying empty

CARDIFF’S commercial property sector is certainly in a boom phase with major schemes such as Capital Quarter and Central Square in the city centre developing apace.

And there is far more to come, including the Central Quay project on the SA Brain & Co brewery site, which will eventually see more than two million square feet of new office, leisure and residential space being built.

However, with its constrained geography, hemmed in by the M4 to the north and the Bristol Channel to the south, there are few obvious available sites, particularly in the city centre, to bring forward the next wave of major development projects – while of course there remains significant potential for the peninsula site currently owned by Igloo Regeneration in Cardiff Bay.

There is though one parcel of land, or to put it more accurately – wasteland – that fits the bill – sandwiched just yards between the Capital Quarter and Central Square schemes and within touching distance of Cardiff Central Railway Station.

So, why is the near five-acre site at the south side of Callaghan Square sitting idle, five years since the Welsh Government acquired the land for about £7.2m – not accounting for professional fees and stamp duty – from one of the UK’s leading property developers MEPC?

The irony, not lost on many in Wales’s commercial property sector, was that the Welsh Government’s rationale for splashing out taxpayers’ money on the land was that it wanted to bring development activity forward – even though the previous owner had outline planning consent for 500,000sq ft of new offices.

In doing so it put the kibosh on plans from Cardiff council to acquire the land which could have seen the building of a new HQ for law firm Hugh James – which, incidentally, will see its new HQ at Central Square in front of Cardiff Central Railway Station opening next month.

Of course, the Welsh Government isn’t an institutional investor that needs to execute a steady churn of property deals to provide a profit or dividend for investors.

But as a prime city centre development site – although granted there are some design constraints due to a major sewerage pipe and other utilities running through it – a profitable deal has to be more than achievable; even though some in the property sector will tell you privately at least that having homelessness charity the Huggard Centre on its doorstep could deter investors.

Interventions by the Welsh Government in the Cardiff marketplace have paid rich dividends in the past, although making a profit has, and no doubt remains, anything put its primary motivation.

Back in 2013, through the shrewd oversight of its then external adviser on real estate matters, David Goldstone, it acquired the investment in the One Capital Quarter office building, which at the time was not quite completed, from developer of the wider Capital Quarter scheme JR Smart.

The deal was in the region of £14m. And fast forward four years and the fully let near building was sold in a £20m (net) deal to Global Gate Capital. The deal generated a profit for the Welsh Government of about £6m.

That was a very good piece of business for the Welsh Government – and something that leading property developer Mr