Infrastructure changes will give Wales an edge over competition
Michael Lawley, chairman at Cooke & Arkwright, argues that the current Welsh infrastructure revolution is good news for the commercial property sector
IN 2017 and for the rest of the decade, a range of major infrastructure projects across Wales will come on stream, impacting positively on property markets, as well as the wider economy.
While soft infrastructure investment in skills and better organisation such as the city region initiatives are important, it is hard infrastructure investment that will give Wales a competitive edge.
The Brexit vote heralded a period of unprecedented constitutional, economic and social change – the full fallout of which is not yet clear.
Yet against this backdrop, Wales has much to celebrate and prospects for its property markets are more promising than ever as a result of opportunities offered by several major infrastructure investments in the pipeline.
Current infrastructure investments look set to be on a level not seen since the 1980s when the advanced factory programme, EUfunded roads in the Valleys and West Wales, and major projects such as the designation of Cardiff Bay were all commitments made against the backdrop of major industrial decline.
The demise of the coal industry and contraction of the steel industry were successfully coped with, but Wales must now take the opportunity in the 21st century to push on from the industrial and commercial base which has been effectively rebuilt.
Infrastructure is a vital element in delivering this progress, especially in a post-Brexit environment where a competitive edge, a good workforce and a strong cultural identity are more important than ever. It is an old adage – that property markets relate closely to location and infrastructure – which is an important element in this. The dramatic rate of office development in Cardiff ’s Central Square and Capital Quarter, which both have great access to major public transport hubs, is not surprising, and the link between major industrial development and the road arteries is a well-established necessity.
Investment in infrastructure is coming from the EU, UK Government, Welsh Government and local authorities via a range of delivery vehicles. However, the private sector is also actively involved in some aspects.
Tracking this investment and its ramifications for growth potential is an important part of a property professional’s advice to clients, especially when communicating to property owners and investors who may not always be based in Wales, but more often in London or even internationally based.
This infrastructure investment covers a number of sectors including road, rail and air transport, and energy.
In road transport, the long running Heads of the Valley road improvement programme continues, giving greater mobility in that area and helping link into the improved public transport systems.
The M4 relief road inquiry commences in the spring and construction must now follow to give certainty of future industrial investment, crucial in the post-Brexit environment.
The halving of the tolls on the Severn Bridge next year is a very important positive message which needs to be conveyed well beyond Wales.
The long-awaited East Bay PDR link in Cardiff is under construction and will significantly enhance the potential of south Cardiff and Cardiff Bay as a desirable commercial and industrial location, completing the vision shown some 30 years ago with the designation of Cardiff Bay. In North Wales, the recent announcement of consultation to improve the A55/A494 in Flintshire is also welcome.
Perhaps even more dramatic is the investment in rail. The main line electrification programme is now well underway and will be operational to Cardiff by 2019 and, it is anticipated, into Swansea a few years later.
The positive impact of muchimproved journey times and the quality of the journey from Wales to London again cannot be underestimated from the perspective of people who are based in London or beyond. This will be a great help in attracting commercial property investment into Wales.
Proposals for the phased delivery of the Metro system for south-east Wales, comprising an integrated system of electrified rail and bus routes will gain momentum following the award of the Wales rail franchise in late 2018, and the substantial commitment of funds and organisational resource available under the City Deal.
The implications of this system for mobility of people travelling to work across the Cardiff Capital Region are enormous, and the focus of the development around hubs such as Central Station and Queen Street Station in Cardiff and others such as Pontypridd and Newport will impact positively on local commercial property markets as well as house prices in the best connected areas.
Further west, Swansea Bay is promoting its own city deal bid and, with its existing good quality public transport system enhanced, continues to give a second strong city region focus in South Wales.
The recent announcement of proposed terminal improvements at Cardiff Airport is also positive, with clear links to improved passenger numbers now being generated.
Road and rail routes to the airport also need to be part of the wider transport planning, but this can be positively delivered now that Transport for Wales is established as an overarching delivery organisation.
The energy production sector is very strong in Wales. Sustainable energy generation in a country well blessed with wind and sunlight make it a focus for wind farm and solar schemes. These renewable energy industries would be enhanced by the Swansea Bay tidal lagoon proposals, on which there has been positive news in recent weeks. The final ingredient of UK Government support could transfer the proposal into reality, creating a major economic stimulus.
The LNG facilities at Milford Haven make Wales a focus for gas transmission, and the development of the Wylfa Newydd Nuclear facility at the other end of the energy spectrum leaves Wales as a progressive, energy-leading country.
Against wider uncertainty in the UK and abroad, we must celebrate the progress taking place in Wales and the opportunities this will afford the commercial, industrial and residential property markets. The importance of these infrastructure projects to the future of Wales must not be taken for granted.
They have the potential to impact positively on all areas of the economy and the coming years promise to be very positive ones for us all.