Record year for Cardiff commercial lettings

Three percent year-on-year rise

30 January 2018

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Commercial office lettings in Cardiff to the end of 2017 were up 3% compared with 2016, according to new figures released by Cooke & Arkwright's office agency.

The data shows that total space leased in Cardiff to the end of 2017 was 703,926 sq ft, compared with 685,640 in the previous year. This is also an increase of 12% on 2015 and 23% on 2014.

Though a 3% rise year-on-year, without the substantial Government Property Unit deal of 260,000 sq. ft in Q3 of 2017, the year would have ended with a fall in transactions to levels last seen in 2013.

This slower growth is in part explained by an unprecedented bumper few years in Cardiff, with several major, high-profile Grade A city centre lettings to organisations including Hugh James, BBC, HMRC and Motonovo.

A subsequent lack of Grade A and B stock in the market, coupled with lower levels of smaller transactions, also explains the slower increase.

In total across 2017, 463,353 sq ft of space let was Grade A (66%), 225,529 Grade B (32%) and 15,044 Grade C (2%). In this year, city centre locations accounted for 587,932 sq ft, Cardiff Bay locations for 36,850, and Business Parks for 79,144 sq ft.

Tim Lawley, Associate Director at Cooke & Arkwright, specialising in office and industrial agency, said: “2017 was another record year for Cardiff office deals, demonstrating the continued strength of the market and the appeal and calibre of the city centre as a high-quality place to do business.

“However, the 2017 figures should be taken with an element of caution, given that they are largely driven by the major HMRC deal.

“This comparative slowing of the market could also be a knock-on impact of current restricted Grade B and Grade A supply, after a flurry of development activity over the past few years.

“Nonetheless, there is much to celebrate. The challenge now is for the market to look to landlords to retain and refurbish existing stock for commercial use, to complement further 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