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Cardiff Dominance
Cardiff continues to be the guiding force for new property industry investment
into south Wales, according to the 2008 regional report published by international
property consultants, King Sturge.
The city’s £700m St Davids2 shopping development, due to open
in 2009, “will reinforce the capital’s dominance in attracting
investment projects of the highest order,” says joint managing partner,
Chris Sutton in the 13th annual property research report.
Notwithstanding this dominance of Cardiff, both Swansea and Newport have
enjoyed an up-turn in activity and, in particular, experienced renewed
optimism in the retail sector.
Although the main retail deals in Cardiff were transacted in the first
half of 2007, before yields moved out in line with the national market,
“good quality, well-located buildings occupied by blue chip retailers
will, if priced correctly, remain popular with private investors and funds,”
the report says.
Office occupation remains relatively healthy, with Cardiff city centre
achieving a prime rent of £20 sq ft and motorway-related business
parks continuing to attract occupiers. With speculative Grade A office
development nearing completion at Callaghan Square in central Cardiff,
the future looks promising within this important sub-sector of the market.
The major 800,000 sq ft investment in Amazon in Swansea, and the proposed 75 acre project by Home Retail Group in Major have boosted the industrial and distribution market, while well-located second hand industrial schemes such as imperial Park, Newport, have attracted blue chip occupiers. The future looks less rosy for secondary buildings in poor locations, particularly bearing in mind the imminent implementation of vacant rates legislation.
The report singles out the Welsh Assembly Government as “seemingly intent on layering yet more legislation upon the property industry.”
WAG has signed up to BREEAM Excellent standard for all its projects, and the introduction of Energy Performance Certificates and new vacant rates liability on property owners, arguably, could not have come at a worst time.
“These will have a major impact on the property industry and values. It is unfortunate that the Government, which was so keen to differentiate itself in terms of smoking bans, prescription charges and hospital parking could not be persuaded to make a real difference on this new legislation.”