    |
|||
        |
|||
General
News and Deals
The commercial office market in Wales will continue to grow significantly according to Lambert Smith Hampton (LSH). The company has just issued its 2007 M4 Office Market Report.
“South Wales is matching growth in other M4 corridor areas with significant new building development plus growth in rental values,” says LSH’s head of research, Dr Arezou Said. “Office rental growth is currently running at 7.9% nationally and our predictions show growth of 8.5% this year and 8.3% next year. We believe the pace will slow from 2009 onwards, as current construction projects result in more supply coming to the market.”
In Cardiff take-up of office space increased by more than 35% in 2006, with evidence of similar levels of activity for 2007. The city is enjoying a spurt of speculative office developments and after a number of years of rents running at around £18.50 psf, a new bench-mark rent of £20 psf was achieved at 3 Callaghan Square.
LSH’s Cardiff office agency specialist Steve Matheson comments: “The property market fundamentals are healthy for Cardiff. Speculative development of Grade A offices is taking place in both the city centre and out of town, providing good quality opportunities for new inward investment.”
Cardiff’s largest single speculative office building is Linea in St Mellons, a groundbreaking inward investment scheme that will transform a 46,000 sq ft high quality warehouse into a 75,000 sq ft two-storey Grade A landmark building.
We handled the £3m acquisition of the site by HSBC Specialist Investment Limited’s UK Active Property Fund (UK Active) and are being jointly retained with Knight Frank to market the scheme to potential occupiers. The redevelopment work, to include the largest single open plan floor plate in the city, will cost £12m. Along with other speculative investments such as the £3m new build
“In Swansea, the SA1 Waterfront development has been a major draw for occupiers,” explains Lee Mogridge, head of LSH in Wales. “SA1 has enhanced the city’s ability to offer high-quality accommodation. The result has been an upward shift in rental values, encouraging new development and the substantial refurbishment of second-hand city centre offices. Admiral Insurance’s acquisition of just under 70,000 sq ft at Cyprium 1 and 2 has helped the city achieve a new headline rent of £12.75 psf. In addition, new initiatives by the Welsh Assembly Government and Swansea City Council aim to support transport, infrastructure and environmental improvements over the next 15 years. This should mean that Swansea centre maintains development progress with the SA1 Waterfront and the Maritime Quarter.”
LSH has been jointly instructed this month with Dawsons to market six commercial units within Meridian Quay, in Swansea’s Maritime Quarter. The prestigious mixed-use scheme includes three buildings one of which is The Tower, a 29 storey, 107 metre-high, apartment block which will become the tallest residential building in Wales.
Office development investment in Newport has focused on out of town business parks recently such as Celtic Springs, Cleppa Park and Imperial Park, where high quality accommodation at £15.00 psf has been a draw for both public and private sector organisations. Steve Matheson adds: “Lettings in Newport already stand at 72,970 sq ft this year and with prime rents undercutting other competing cities we expect that degree of take-up to continue. We’re also predicting a slight shift towards the city centre as a mix of infrastructure, retail, leisure and office development currently underway should upgrade the centre’s image, opening up further investment opportunities.”