South Wales Report launch 2008
10 March 2008
Cardiff continues to dominate the region
Cardiff Bay
The Cardiff office launched its 13th Annual Report on the South Wales property market at a breakfast reception held at the Vale of Glamorgan Hotel on Thursday 6 March. The report is published during a period of significant change in both the economy and property market – which also coincided with King Sturge ringing the changes with its first breakfast launch.
The report and presentation focused upon the Investment, Occupational and Residential markets, preceded by an overview of the global economy given by Head of Research, Dr Angus McIntosh. Jonathan Phillips, Justin Millett, Jonathan Matthews and Joint Managing Partners Chris Sutton and Huw Thomas provided the local perspective.
Cardiff continues to be the guiding force for new property investment into South Wales, according to the report. The city’s £700 million St Davids 2 shopping development, due to open in 2009, will reinforce the capital’s dominance in attracting investment projects of the highest order.
Not withstanding the dominance of Cardiff, both Swansea and Newport have enjoyed an up-turn in activity and, in particular, experienced renewed optimism in the retail sector.
In the residential sector, land acquisitions by housebuilders have stalled in recent months however historically high land values continue, particularly on the fringe of the region in Monmouthshire to the east and Swansea and Carmarthenshire in the west. The strength in land values reflects the slow pipeline of sites reaching the market due to planning and environmental constraints.
Office occupation remains relatively healthy, with Cardiff city centre achieving a prime rent of £20 ft². 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 ft² investment by Amazon in Swansea has 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. The new vacant rates liability, arguably, could not have come at a worst time."
