RSS FeedRSS Feed

Welsh economy needs more speculative property development5th March 2014

Welsh economy needs more speculative property developmentDespite improved confidence in the Welsh economy, there are still large gaps in the supply of high quality office and industrial space and Wales needs more speculative development, according to new research by property advisors JLL.

In the office sector, there is a clear rise in the number of first class employers looking to create a new productive and collaborative workplace, demonstrated by the emerging Admiral buildings in Cardiff and Newport who will take 300,000 sq ft of city centre office space and house almost 3,500 staff between them. This, combined with the proposed relocation of BBC Wales in 2014, underlines the strength in occupier demand in the office sector.

Chris Sutton, lead director at JLL’s Cardiff office, said: “The provision of new workspace is vital if we are to attract and retain higher value industries in our region. The increase in market activity should give developers and investors the confidence they need to create the speculative development which Wales sorely needs.

“However, there are some encouraging signs of a return to speculative development in the Cardiff market by developers who have the opportunity to tap into the targeted Enterprise Zone marketing programme which is being aimed at the financial and professional services sector.”

The current undersupply of Grade A space in Cardiff has led to robust headline rentals and, together with Cardiff’s capital city status and compact centre, the city is proving to be an attractive investment proposition.

In the industrial sector, JLL predicts that new development is, in the first instance, likely to be focused upon demand-led bespoke projects that incorporate key features not found in second-hand stock. These include cross-dock distribution warehouses and space for the waste-to-energy sector, of which Viridor’s new waste-to-energy plant in Ocean Park is a prime example.

Chris Sutton said: “Increased confidence in the economy contributed to an 83 per cent rise in industrial take-up in South Wales between 2012-2013, which has meant the total availability of floorspace has reached pre-recession levels.

“Demand has been driven by the encouraging trend to bring manufacturing jobs back to the UK, overflow demand from the Midlands and South West together with the changing nature of distribution.”

Based on the emerging office and industrial demand, JLL predicts that the Welsh Government will prioritise the procurement of new floorspace and gap funding will be made available to ensure speculative projects get off the ground.

The retail market has also shown signs of sustained improvement during 2013 with more than 90 per cent of retailers reporting like for like annual growth.

In Cardiff, the traditional arcades in the city have their unique, boutique style to offer but Queen Street and the other centres outside St David’s have experienced mixed fortunes, with many retailers having a clear preference to be represented in St David’s.

“Looking ahead, the city can remain proud of new entrants and the continued interest from international retailers. It is well placed to capitalise on consumer demand for a complete retail experience.”

JLL also believes that Cardiff is well positioned to capitalise on the rise in confidence in the investment market.

Chris said: “Investors are looking for good returns and London is such a competitive market that they are now turning to the UK’s thriving regional cities, of which Cardiff is one.

“As investors look to Cardiff, confidence will continue to increase and we have seen over £100 million of investment transactions in the Cardiff office sector alone in 2013.

“None of these changes will happen overnight but we expect demographic and lifestyle shifts to have a significant effect on the future of Cardiff .”

Recent Headlines

Click here for more news stories...

Commercial Property Events

Have you any commercial property events you'd like to tell us about? It could be networking, exhibitions, seminars, industry lunches or sporting fixtures. We will list them for free. Just email with the following details: Event name, date, time, venue, cost, booking info and a brief description of the event.

Commercial Property Jobs

To list your property job vacancies on Property News. Email:

Sign up to our free e-alerts for all your property news and views.
Follow Property News on Facebook Follow Property News on Twitter Follow Property News on Google+ Follow Property News on Linkedin Property News RSS Feed