Bumper Q3 quarter for Cardiff commercial lettings

19% year-on-year rise

24 October 2017

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Commercial office lettings in Cardiff are up 19% on the same quarter last year, according to new figures released by Cooke & Arkwright's office agency. The data, gathered by the Cardiff Commercial Property Forum, shows that total space leased in the third quarter of 2017 was 363,752 sq. ft., compared with 187,775 sq. ft. for the same period last year. It brings the total space leased for 2017 to date to 575,706 sq. ft.

Notably, the quarter’s increase was driven by the biggest ever office letting in Wales to date – 266,000 sq. ft. at 6 Central Square to the Government Property Unit, which accounted for almost 75% of the take-up for Cardiff. City centre locations accounted for 333,679 sq ft, compared with out of town locations which accounted for 17, 921 sq ft. Overall, 20% take-up was Grade B office stock, and 80% Grade A. 

Aside from HMRC, significant lettings for the quarter included Friary House to Cardiff University, Brunel House to Legal and General, and Callaghan Square to Aon Benfield. Smaller Cardiff Bay lettings included Drake Walk to Rockadove, and Mount Stuart Square to Cinemattic.

Tim Lawley, Associate Director at Cooke & Arkwright, specialising in office and industrial agency, said: “It’s been an unprecedented bumper two-year period for Cardiff, largely due to the major city centre office developments, and landmark lettings to the likes of the BBC, Motonovo, and Hugh James.

“Similarly, the substantial GPU pre-let to accommodate the HMRC relocation from Llanishen in 2020 has had a major impact on the figures for this quarter, and for the year as a whole. If it wasn’t for this deal, the year’s outcome would look very different.

“This underlying dip behind the large deals in the Cardiff office market could stem from a lower level of availability, with city centre office supply in Cardiff now down to 707,505 sq. ft., some 18% down on figures reported in Q1 2016.

“With a large proportion of the existing Grade B supply already given over for alternative uses such as student residential accommodation, the market is looking to landlords to retain and refurbish the existing stock for commercial use, to complement the Grade A developments currently in the pipeline.”

Cooke & Arkwright have been providing rating valuation advice to The Welsh Rugby Union Limited (“WRU”) and Millennium Stadium plc for many years. They were recently successful in achieving substantial reductions in the assessments of the Millennium Stadium, covering both the 2005 and 2010 rating list. These negotiated reductions yielded savings of c.£3.5m which, crucially, allows the WRU to re-invest in rugby throughout Wales. They advise the WRU across the group portfolio including the National Centre of Excellence in the Vale of Glamorgan. The valuation issues across the WRU portfolio are complex requiring a high level of understanding of the funding and finances of professional sport in Wales. Cooke & Arkwright’s experience and understanding of these issues and application to the rating valuation have yielded these substantial negotiated reductions. The WRU and the Millennium Stadium entrust our work to organisations with the required levels in experience and expertise in dealing with these complex issues. I am glad to say we have this expertise in Wales. I would have no hesitation in recommending ratepayers making use of this Welsh based expertise.

Steve Phillips, Group Finance Director, Welsh Rugby Union Group