Central Square flagship is bought in £51m deal
Wales’ flagship office building, One Central Square, has been acquired in a £51m deal.
The grade A office scheme, the first project completed at the Central Square regeneration scheme in the centre of Cardiff, has been bought by Luxembourg-based real estate fund manager Aerium from financial services giant Legal & General.
The 134,940 sq ft building, which was developed by Cardiff-based Rightacres Property, was sold to L&G in a deal understood to be region of £40m in 2015.
At the time, the unfinished building only had a pre-let tenant in law firm Blake Morgan. It is now fully let, with other tenants including Julian Hodge Bank and fast-expanding vehicle finance company MotoNovo.
One Central Square, which was designed by Cardiff-based architectural firm Rio, generates an annual rental income of just under £3m a year.
It is next to the under-construction 135,000 sq ft Two Central Square building, which is already fully prelet to law firm Hugh James and Cardiff University’s School of Journalism, Media and Cultural Studies.
The building will be ready for occupancy next summer. And alongside it will be the new £120m headquarters for BBC Cymru Wales.
From autumn 2019, some 1,000 BBC staff will begin a phased move into the building from the current BBC Wales HQ and studio site in the Llandaff suburb of Cardiff.
On completion, ownership of the buildings, which are being delivered by Rightacres, will pass to L&G.
When fully developed, Central Square will provide 1 million sq ft of office, residential and retail space.
Robin Carr, co-chief investment officer at Aerium, said: “One Central Square is a strong addition to our portfolio, providing us with access to a transformational development at an early stage of its life.
“We firmly believe that this area of Cardiff... presents a highly appealing offering to occupiers, as demonstrated by the covenant strength of our building’s tenants.
“With the BBC taking up occupation opposite us in 2019 and the huge improvements under way to the wider public realm, we have no doubt that this area of Cardiff will continue to flourish.”
Tom Roberts, head of strategic investment and regeneration at L&G Real Assets, said: “The sale of One Central Square realises our business plan to attract third-party capital into completed phases of this transformational Cardiff regeneration project, allowing us to focus on future phases of development with our partner Rightacres.
“The Central Square project continues to evolve at an extremely impressive rate and the appetite from investors such as Aerium is testament to the quality of product being created at this gateway regeneration site.”
International property advisory firm Knight Frank’s Cardiff office acted for L&G on the deal with Aerium.