Expanding firms fuel a big rise in city’s office market
CARDIFF’S commercial office market has made a flying start to the year and the outlook is even brighter.
In the first three months of the year (Q1) commercial office lettings in the capital were up 57% on the same quarter last year, according to new figures released by leading property agent Cooke & Arkwright.
According to the data, gathered by the Cardiff Commercial Property Forum, total space leased in Q1 was 150,500 sq ft, compared with 95,000 sq ft for the same period last year.
The increase was largely driven by two major deals for Cardiff University (44,500 sq ft) and Network Rail (30,000 sq ft), as well as a key out-oftown deals for Garrison Barclay Estates (16,000 sq ft).
The take up was split equally between Grade A (best quality) and B stock, but with 80% of take-up being in the city centre.
Cooke & Arkwright advised Cardiff University’s School of Journalism, Media and Cultural Studies (JOMEC) on its new headquarters at 2 Central Square in the city centre, which will be completed in summer 2018.
Network Rail also agreed a letting of the newly refurbished space at St Patrick’s House, with only 19,880 sq ft left in the building.
Tim Lawley, associate director at Cooke & Arkwright said that commercial office deals should continue to rise for the remainder of the year.
He added: “With the impending Government Property Unit deal, 2017 should be a strong year.
“Work on new Cardiff city centre tax office which will employ 3,000 staff could start within six months
“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 sq ft.
“But while the latest figures are encouraging, they are largely a result of companies already residing in Wales moving to bigger premises,” Mr Lawley said.
“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.