by Terry Cunnew
During recent decades, the traditional economy of South Wales has suffered body blow after body blow as the coal and steel industries have declined. Throughout the 1970s and into the early 1980s, South Wales seemed almost synonymous with decay and dereliction.
But, during the course of the 1980s, starting slowly but gaining momentum year by year, South Wales has been recovering. Primed by public investment via the Welsh Office and bodies such as the Welsh Development Agency, South Wales has succeeded in attracting new industry and new employment.
And where the public sector has led, the private sector has followed, so that today the region seems set to become one of the growth centres for the 1990s. The agents of South Wales seem confident of the outlook for the last decade of the 20th century.
Don Waters (Newport) of Morgan Water believes: In office terms, Newport in the mid-to late-1980s was tending to struggle a bit, with very little movement in rents.
But, during the past 18 months or so, fuelled by relocations such as TSB at Cleppa Park, there has been more enthusiasm in the market and we have seen quite a jump in rents.
Add to that the prospects of the second Severn crossing and the continuing successes in Cardiff and there does seem to be quite a lot of optimism around.
Rents for reasonable quality refurbished offices are around £8 per sq ft, and the Gold Tops area — which is the main professional area of the town — has been rents of over “13 per sq ft for typical period-type buildings refurbished to a good standard.
In terms of new development, Newport is woefully short of such space, although there are schemes in the offing.
For example, work has just started on a typical courtyard-style development at 1 Queens Mews, off Queens Hill which Cooke & Arkwright are letting. I understand that they are asking around £13 per sq ft.
Another couple of schemes are coming along, so far as major projects are concerned, we have been involved in a property at the former Post Office building opposite the railway station.
The present owners have put together proposals for a scheme of between 60,000 sq ft and 80,000 sq ft, but I think that there is some way to go on that, although I feel the planners are favourably disposed.
We have given the owners, Ridgeway Holdings, some valuation advice on the old PO building, but we are not retained agents as such.
Developers are now seriously looking at central Newport and schemes are starting to emerge. Yet three or four years ago there was virtually no interest in doing anything in the town. Now rental levels have reached a pitch where development is a feasible proposition again.
In addition, there is out-of-town development activity, and in this field the major scheme is the 55-acre Langstone International Office Park at Coldra on the M4.
The WDA has just released a 10-acre site at Cleppa Park, on the Cardiff side of Newport, and this is up for tender for B1 development.
Gwent Business Park in the Duffryn area, totals about 60 acres and will be offering serviced sites.
I think that if all the planned B1 schemes were to happen at once they would swamp the market, but it seems likely that they will in fact be staggered.
And developers are being more cautious now. For example, we have had instructions on a 2-acre site at Queensway Meadows, which is a mixed B1 and light industrial site with a very good density. We have been asked to market it selectively and test the water, and although people are interested, they are standing back a bit.
One current problem is the lack of traditional light industrial space. A short while ago, I was dealing with someone who had outgrown their existing space and wanted a unit of 8,000 sq ft.
You can find a few new starter units and there are some secondhand ones of around 25,000 sq ft, but in between there is nothing.
Often this sort of demand is coming from tenants who have commenced trading in small local authority starter units and have now reached the point where they need more space and something with an individual identity.
When it comes to rent, the Maesglas Industrial Estate, to the south of the town on the approach to the new docks distributor road, has two secondhand 25,000-sq ft units which have come back to the market at £4 per sq ft.
But as to what has actually been achieved, the level is more likely to be around £3.50 to £3.75 per sq ft. That is for larger units, but the small starter units have seen rents of £5 to £5.50 per sq ft.
In the retail sector, the Cambrian Centre opposite the station will provide two stores and about 11 units. I understand they have the two stores under offer, but I think that the developers are finding things a bit hard at present.
In general, Newport is a centre with a lot of untapped potential and what is needed is something to spur the market.
There is an underlying confidence in Newport’s position as a secondary centre to Cardiff and factors such as the opening of TSB have been encouraging.
The town’s strategic location is good, and the second Severn crossing can only boost that.
Tony Newhouse (Newport) of Scotts comments: Our major development in Newport at present is the Langstone International Business Park, which we feel is probably the best-situated business park on the M4 corridor this side of the Severn Bridge.
We are joint agents with St Quintin and Debenham Tewson at Langstone, a 500,000-sq ft development on 55 acres by Wilson Bowden Properties. Detailed planning consent has just been obtained for the first building: Saturn House will total 50,000 sq ft on a 4.8-acre site with 220 parking spaces. Work is expected to start in the autumn.
Major infrastructure and landscaping works have already been completed at Langstone, opening the site up for B1 office buildings from 15,000 sq ft upwards.
We are also involved in a 55-acre site on the Risca/Rogerstone bypass linking to junction 28 on the M4. Of that site, 11 acres is earmarked for a residential scheme, while the rest will go for B1, B2 and B8 schemes. Lovells are developing 10 acres and we are marketing the balance.
The town’s principal retail scheme is the Cambrian Centre, opposite the railway station, which consists of 11 units and three larger stores.
We are not involved as agents in this scheme, which is being developed by Estates & General Investments. Their agents are Debenham Tewson and Powell Tuck.
Two of the large units have gone to Fads and Kwik Save and I understand that two of the shops are under offer. The Cambrian Centre is an attractive scheme, but it seems to be proving slow to let — my feeling is that they have been unlucky in hitting the market at the wrong time.
There was also talk of a new town-centre scheme on the bus station site, but that seems to have fallen through.
So far as central office development is concerned, Brunswick Holdings have a 20,000-sq ft scheme in North Street where rents will be pitched at £12.50 to £13 per sq ft. One of the three units in the development has already been prelet. J Trevor are the agents.
On the retail side, there is planning permission for a new scheme on a site between Commercial Street and Stow Hill, but it is not certain whether that is going ahead.
There is, in fact, a development in progress in Commercial Street, on the site of the old Woolworth store on the corner of Charles Street.
J Trevor are also agents on Ridgeway Holdings’ scheme at the former telephone exchange in High Street. Planning consent has been obtained for 80,000 sq ft of net let-table office space on six or seven floors, but work has not yet started.
It is fair to say that Newport is suffering from the downturn in the commercial market which we are seeing nationally. However, it has not been so pronounced here as in some other areas.
Out of the town centre is the Newport Retail Park, at the Llanwern Steelworks. Providing both food and non-food retailing and two car showrooms, much of the accommodation has already been taken.
There is also a proposal for a multi-screen cinema, pub and drive-through fast food unit, but these plans are still in the pipeline.
Looking at the area generally, there has been a very buoyant market around here, and Newport has been fortunate in attracting a number of major commercial investments such as the TSB and the Patents Office.
There is still quite a lot of interest in the area, partly, I think, as a knock-on effect down the M4 corridor. I also think that one of the major factors which is going to affect Newport in the not-too-distant future is the second Severn crossing, which will come in only 5 miles from the town.
My view is that you can look to the 1990s with considerable confidence in Newport.
Paul Roberts (Swansea) of Stuart Williams & Slater comments: We tend to be identified as a practice with the enterprise zone, and that is where most of our agency instructions are located. The life of the Swansea Enterprise Zone ends in June next year, and what we are seeing at present is quite a lot of activity from developers snapping up the last few sites. In fact there is not much left now, and certainly all the best sites have either gone or have options on them.
In development terms, the trend is towards B1 schemes and there is a lot of activity going on, with units typically fetching £8 per sq ft now. And we have seen no sign of rents levelling off. Industrial are now around £3 per sq ft, depending on size and location. There is still strong competition among tenants for what is available.
We are now acting on four main schemes within the enterprise zone. At Beaufort Court, Beaufort Road, which consists of 16 light industrial/warehouse units ranging from 1,050 sq ft up to 6,460 sq ft there are only two units left and we have interests in both of them.
Then we are involved in a hi-tech scheme known as Prospect 1 and 2 in Phoenix Way — one unit of 10,000 sq ft and another of 20,000 sq ft, each completed to shell finish. We have had strong interest from a plc tenant to take the whole scheme, which is close to the Hilton Hotel. The rents quoted are £73,400 pa on the larger unit and £39,000 on the smaller one.
We are acting on a development called Christopher Court in Mona Close, off Valley Way, providing four high-specification light industrial units. These units range from 4,070 sq ft up to 5,300 sq ft, with rents in the £2.80 to £3.20 per sq ft bracket. One unit is let and we have strong interest in two of the others.
Just coming on stream is Gilsea Park, also in Mona Close, which is a development of 14 nursery units ranging from 1,000 sq ft to 3,000 sq ft. Some are being marketed on 12-year leases with three-year reviews, while others are being sold on 99-year leases at a peppercorn.
Another scheme which I ought to mention is Lakeside Technology Park, where there is now just one unit left. Totalling 7,080 sq ft, it is being marketed at £4.50 per sq ft.
In many ways I feel that Swansea caught the tide of revival earlier than Cardiff. We have had the marina for some years, which has helped to publicise the city, and we have also benefited from the enterprise zone. And now we have the Towy Barrage, which is going to open up much land for development in Swansea Docks. My feeling is that the prospects for Swansea are very encouraging, and you can say that we have seen a transformation over the past 10 years.
Before the advent of the enterprise zone, there was just derelict industrial wasteland and where the marina is now there was an old redundant dock area.
So far as the city-centre office market is concerned there has been a considerable amount of rental growth over the past two years because the surplus is being rapidly taken up. Some three years ago West Glamorgan County Council moved out of the city centre to a new purpose-built headquarters, and that left a lot of space vacant, depressing rental levels for a time.
Rents are now in the £6 to £8 per sq ft range for good secondhand space. There are a number of new developments in the pipeline, but there have not actually been any new buildings up until now to show what sort of rents can be achieved.
Rowland Jones of Jno Oliver Watkins & Sons (GP Property Services) says: On the whole, the Swansea market is still reasonably active, even though the retail sector is rather quiet.
Demand for office and industrial space is holding up quite well and and we are seeing inquiries for design-and-build packages within the enterprise zone.
Short-term users are also looking for industrial units of around 20,000 sq ft.
It is undoubtedly true that the enterprise zone did distort the industrial sector in the mid-1980s, and indeed it is only recently that people have again started to look for space outside the zone.
One result of this is that older space outside the EZ is still cheap. For example, we have recently let a 20,000-sq ft unit on a short letting at £1.75 per sq ft.
In comparison, the rate for new space outside the zone is some £3 per sq ft, which is the sort of rent being achieved by the WDA for units to the west at Gorseinon.
Against this, 5,000-sq ft shell-and-core units inside the zone are letting at around £3.50 per sq ft.
We are acting for Court Group on site P5 in Samlett Road in the enterprise zone, where 20,000 sq ft was prelet to builders’ merchants Selco — newcomers to Swansea.
Another 8,000 sq ft has been taken by Shell Superdrive, while a 3,500-sq ft showroom is currently under offer.
Another two showroom/workshop units are being marketed, of 5,000 sq ft and 3,500 sq ft, with asking rents of £4.50 on the showroom space and £3.50 for the workshops.
So far as B1-style development is concerned, there are about three such schemes under way. However, my feeling is that the market is becoming more difficult for B1 space now.
However, new development activity is occurring in city-centre offices for the first time in quite a while. The problem has been that West Glamorgan County Council built itself a new headquarters in the 1980s, and when the council moved in a lot of city-centre space was released. This has taken some time time to absorb.
Now at last we do not have a surplus overhanging the market and rents are moving up to the point where developer interest is coming back.
It is high time that something new was started, since there has been no new or even refurbished office space on the market for some years.
Existing secondhand space is generally pitched at around £6.50 to £6.75 per sq ft.
Currently we are representing Court Group on their scheme to refurbish the upper floors of Exchange Buildings, and we expect to have space available there early next year.
By and large, I feel that people are coming to appreciate that Swansea’s communications links have improved and at the same time the city is still relatively cheap.
There is still growth potential in the market here and talk now is of office rents of £10 to £12 per sq ft for new space at the bottom of The Strand.
Bernard Ryan of the Land Authority for Wales says: Essentially we bring land forward for other people to develop. Normally the authority tackles land which has problems, whether it be a question of site assembly or easements or problems of that nature. We are trouble shooters in that sense.
We also acquire large tracts of land which can be parcelled up. We put in the services and sell it off, for housing land in, say, 5- to 10-acre chunks.
This is what the builders generally want, and in effect we take the hassle out of the process.
In town centres we have assembled a number of sites for development. For example, in Cardiff’s Queen Street we have acted jointly with LET on the old Allders department store projects.
Putting that site together involved something like 90 separate interests, including not just flying freeholds and leasehold interest, but the rights to tie into adjoining buildings and the rights over access to the adjoining St Davids Centre.
As you can imagine, the complications attached to getting a clean title to such a site are not normally overcome quickly by developers.
We are also involved in Cardiff Bay, for example in putting together sites in the Tarmac scheme at Bute East Dock.
Some 80 to 90 separate interests were involved in and we had to use compulsory purchase powers to tidy up and clarify the ownerships and cleanse the title.
We use CPOs reluctantly and only when it is absolutely necessary.
The authority is also active in town-centre schemes.
For example, Carmarthen’s town-centre project is just coming to fruition. CPOs were used to sort out a large number of complicated interests, and we will be doing the development with Vanson.
The hope is that work will start later this year.
Currently we are working on assembling a site at Merthyr Tydfil town centre to provide an attractive arcade leading off the High Street. This scheme is in partnership with Burton Property Trust and British Rail, who own a substantial chunk of the site.
We have now assembled between 80% and 90% of the land for the Caerphilly town-centre development opposite the castle. By the end of this year or early next-year, depending on the market, we will be offering that as a shopping-centre site. What is envisaged is a supermarket, standard shops and probably a 500-plus parking spaces.
A similar exercise is being carried out at Port Talbot for a scheme with a supermarket, standard units and, in that case, about 800 parking spaces.
In Newport, we have an arrangement with Rockfort to assist in the development of a site in Commercial Street, right in the town centre.
I think we are going to feel proud of that scheme, and, in my view, it will add a great deal to Commercial Street, which is Newport’s main shopping pitch.
At Pontypool we have assembled £1m-worth of land and have a developer, Wrights of Hull, linked with us. We are also looking at a site in Aberdare, although we have not started land assemble yet. Architects have been commissioned to come up with some ideas in order to pinpoint precisely the area for a town-centre development.
To the rear of Cardiff’s Angel Hotel and facing the castle, is the possibility of a redevelopment project. we are working in partnership with NCP on that.
On the industrial side, we help with strategic schemes and are involved jointly with the Welsh Development Agency on a number of projects. For example, we recently sold them a 55-acre site in Newport, and we have also bought another 90 acres for the WDA there.
In Llantrisant, we have assembled over 100 acres which we are selling to the WDA.
The LAW is completely self-financing and last year we made a pre-tax profit of £7 1/2m. We tend to deal in land which is probably less than prime, providing the input to make it developable — an input which the private sector would probably be unwilling, if not unable, to do.
John James of Fletcher Morgan remarks: Tenant demand is still good and, although there is rental growth, we are still cheaper than Bristol, for instance.
That, plus our labour supply, have helped to keep up demand.
Dumfries Place is a good barometer of Cardiff’s prime office market; we have just prelet a 30,000-sq ft building to a local firm of solicitors at £14 per sq ft.
The other building in the development, by Wilson Campaign, totals 12,500 sq ft. We are joint agents with Debenham Tewson.
More than £14 per sq ft is being asked on some other schemes in the city centre, for example at Trinity Court where we are seeking £14.50 for the remaining unit.
Knox Court, behind Fitzallan Court and which will contain 70,000 sq ft, will probably be marketed at over £15 per sq ft.
I think that Cardiff city centre is still competitive compared with the likes of Bristol, although I can see office rents going to £20 per sq ft in the not-too-distant future because we still have the growth and we still have people looking for space.
The out-of-town B1 sector has been quite lively.
Cardiff Business Park, a Campaign Property development where we are joint agents with Debenham Tewson, has been very successful.
So far we have put up over 200,000 sq ft, and apart from two or three buildings of 2,000 to 3,000 sq ft plus one 30,000-sq ft unit which is ready now, all the accommodation has been taken. The 30,000-sq ft unit, which has 100 parking spaces, is one of few such units available in South Wales at the moment.
We have also been involved with a design-and-build scheme at Cardiff Business Park for S4C, the Welsh language TV station, while we are holding back on another site that is capable of providing design-and-build up to 100,000 sq ft. And because of the current demographics of South Wales, we are seeing inquiries for that size of development.
Beyond that, there are a further two phases of smaller speculative units to be built at CBP.
Another area of activity is the smaller courtyard developments around the city which are aimed at owner-occupiers.
These 2,000 sq ft and 3,000 sq ft units are still going well, although things have slowed since the boom days of 1989. Typically, prices are around £110 per sq ft, say £10 per sq ft in rental terms.
One such scheme is Cowbridge Court, where we are acting for Bailey Developments. Providing three units of 2,800 sq ft to 3,600 sq ft, the scheme has a price tag of £110 per sq ft.
Coopers Yard, in the Cardiff Bay Development Corporation area and close to Central Station, is another courtyard scheme with which we are involved.
Being developed by Bridger Properties, the 13 units total 34,640 sq ft and only five or six 2,000-sq ft to 3,000-sq ft units are still available. The asking price is pitched at £110 per sq ft.
We are also agents for Woodstock Park, a major scheme which includes a hotel site currently in the process of being sold, along with land with planning permission for 250,000 sq ft of offices.
Sited just north of Cardiff on the M4/A470 junction, the scheme is being developed by a joint venture company called Woodstock Land.
On industrial property, some good-quality hi-tech space was built at Cardiff Business Park, but that has all gone now. We got £4.50 per sq ft for buildings from 6,000 sq ft to 18,000 sq ft on lettings which were agreed last year.
Currently we are agents with Cooke & Arkwright on Spring Meadow Trading Estate, about 3 miles east of Cardiff city centre. This is a scheme by Norcross Developments and Dimsdale Developments (South Wales) which provides a total of 72,000 sq ft of industrial/distribution space.
Spring Meadow is one of the few private-sector speculative industrial developments in recent years, and about half the space is under offer. We are achieving over £4.50 per sq ft on units which range from 6,000 sq ft up to 35,000 sq ft.
Probably the highest industrial rents achieved to date have been in the £5 per sq ft to £5.50 per sq ft bracket — that sort of level was achieved for some of the small units of some 2,000 sq ft at Cardiff Business Park.
In investment terms, funds are not active at the moment and we have a number of investments on the market. Good industrial yields are around 9%, but there have been no recent office deals to give an indication of the market.
Under 6% was seen last year and I would guess at 6 1/2% to 7% now.
Chris Sutton and Howard Evans of Powell Tuck say: Currently people are wary in the market and they are having to be much more reassured before they will go ahead with a project.
But for the right accommodation in the right place at the right price there is still a good demand. It is the fringe property which has really suffered, the office and industrial accommodation in the somewhat secondary areas.
The market is a lot more thoughtful now, but for the right sort of space there still seems to be almost unlimited demand in Cardiff.
For example, we just cannot get enough small industrial units, and it has reached the stage where we up the price by 5% every time there is a new instruction!
We have just achieved £5.50 per sq ft for a fairly new industrial unit of about 1,500 sq ft, and that appears to be the best that the market has seen.
On a larger scale, we have recently let a 5,000-sq ft unit at £4 per sq ft; to put that in perspective, the building is in a very rough area of the city and dates from 1930.
There have been three or four industrial developments during the past two to three years and most of those have been of very small units. All have let remarkably quickly at rents of £4 to £5.50 per sq ft.
We now need a few more such developments as well as some larger ones with units of between, say, 3,000 sq ft and 10,000 sq ft.
And sites are still available for industrial development, unlike those parts of the country where virtually everything has been grabbed for B1 schemes. We have seen B1 schemes, but they are in selected locations and have not damaged the industrial sector.
But the situation has been complicated by Cardiff Bay Development Corporation, which was set up in 1987 to co-ordinate the regeneration of the docks; this has done very well.
However, during the first couple of years, the corporation had to get its plans together, working out how to approach each area within the bay. But while that was being decided there were 2,700 acres in a virtual stranglehold at a time when the market was crying out for sites.
Now land is being released, but it is coming at a time when developers are tending to be more cautious.
During recent years, when there has been nothing happening in south Cardiff, activity has been seen in Llanishen, where the Cardiff Business Park and Cardiff Industrial Park have done very well, mainly because they were alternatives to Cardiff Bay.
The industrial space here is fully let at rents in the £3.50 to £4.40 per sq ft range.
The office market is seeing a lot of activity — last year there was a tremendous undersupply and inevitably the developers jumped on the bandwagon and schemes are now being built.
If everything in the pipeline is actually built, then there is undoubtedly going to be an oversupply, but that is assuming that all the proposed schemes go through.
At the moment, rents are still very strong and there has been continuing growth within the city. Windsor Place, the office address in Cardiff, has recently seen a letting at a rumoured £16 per sq ft.
Even outside the prime core, lettings in the Cardiff Bay area at the Waterfront 2000 development have been making around £14 to £14.75 per sq ft.
It is true that the bay was once a no-go location, but now Waterfront 2000, Herbert Street and Tyndall Street are the focus of development. The area is ideally located for the heart of the bay and, at the same time, is in walking distance of the city centre.
As a result you have the benefit of both worlds.
We are currently marketing two schemes there, the first of which Is City Gate — two detached buildings by Bradenham Development — and the other a 40,000-sq ft development in Tyndall Street, which is again a Bradenham development, jointly with Bailey.
We are currently acting on two new projects on our own patch in Cathedral Road — Sophia House and the redevelopment of the former synagogue.
The latter has a Grade II listed facade and is being marketed on behalf of Corinthian Contruction. We are quoting £15 per sq ft on the 20,000-sq ft development.
Sophia House is a 10,000-sq ft scheme overlooking Sophia Gardens consisting of a three-storey new development approached through a refurbished Victorian building in Cathedral Road.
From the investment point of view, things have gone very soft. Where we were looking at yields of 6% to about 6 1/2% at one stage for good-quality city-centre buildings, you would probably be looking at 8% to 8 1/2% now.
However, for new developments, people are being cautious in view of what is in the pipeline, and there is also a problem with funding at the moment.
Anthony Alexander of Stephenson & Alexander remarks: One of the deals which we have recently completed is the acquisition on behalf of S A Brain & Co of Churchills Hotel in Cardiff Road for £1 1/2m.
This 35-bedroom two-star hotel is being refurbished by Brains with a completion target in nine months’ time.
Brains Brewery are also developing a leisure complex at Atlantic Wharf on a site purchased from Tarmac. This scheme will include a pub, restaurant and shops, along with boating facilities.
We also acted in the sale of 42 acres of land at Coryton, at the junction of the M4 and the A470. The land was held in two separate family ownerships and a consortium was formed between them for which we acted.
Some 14 acres are available for development with a hotel and 258,000 sq ft of offices, with another 28 acres of steep hillside land which will be landscaped for country walks.
The price paid was about £2 1/2m, but this reflects the infrastructure costs, which will include alterations to junction 32 of the M4 and also to the foul and sewer drainage system.
On the office side generally, we tend to deal more in the secondary and secondhand market in and around the city centre rather than the new developments.
In that sector we have office suites in the High Street Arcade Chambers and Duke Street Arcade Chambers where, for quite poor office space, we are achieving £6 per sq ft. This compares with £3 per sq ft 18 months ago.
Much of the demand has come from businesses starting up and wanting to have the prestige of a city-centre address, albeit in secondary space.
However, it is clear that high interest rates are having their effect, with fewer new firms appearing. Therefore, I would expect the secondary market to remain static this year.
We are still seeing companies coming into Cardiff from England, but they tend to go more for the higher-quality modern offices in prestige locations.
Several of the new companies have been in the employment agency sector. Pro Temps have taken 22 High Street at a rent of £60 a sq ft zone A, while the adjoining unit has been taken by an insurance firm at a similar rent.
At one stage, High Street was looking rather dire, since St Davids Centre and Queen Street were pulling trade away. But the emphasis has now changed and trade is coming back.
For example, the former Courts unit has been taken by a Bristol company trading as Kitchens. They paid a £250,000 premium for the lease of that unit, which has a 3,000-sq ft ground floor and a similar area on the first floor.
Cooke & Arkwright were the agents.
But the success story has been the High Street/Duke Street Arcade, which was purchased by Arcadia 18 months ago.
They have completed the external refurbishment works and are now about to start on the internal layout.
The effect has been to attract a crop of new tenants, such as jewelers Keith Lilley, at a rent of £60 zone A, the Bridal Shop, Tropical Shine, the China Shop, the Jewellery Co and, most recently, the New York Deli at 18-20 High Street Arcade.
In effect, we have been securing on average a new tenant a month for the arcades, with the latest lettings showing a zone A figure of £35 per sq ft (the Keith Lilley unit includes a High Street frontage, hence the higher zone A figure).
Units currently under offer are pitched at around £47 per sq ft.
Of course, we are helped by the fact that there is a shortage of arcade units in Cardiff at present because the Queen Street Arcade has been incorporated into LET’s redevelopment of the Allders store site, while the Capital Exchange arcade scheme will not be available until the end of the year.
At the same time, the Queens West arcade seems to be losing tenants.
Wyndham Arcade is becoming tatty, and tenants there are looking for space in the High Street and Duke Street Arcade.
Given that arcade rents two years ago were only some £17 per sq ft, it is clear that the investment in terms of refurbishment has been well rewarded. It is reasonable to predict that High Street and Duke Street Arcade rents will reach £50 per sq ft by the end of the year.
On the whole, I believe that, despite the economic climate, Cardiff will outperform the rest of the UK during the next 10 years. There is a lot of both public and private investment being pumped in.
For example, the Welsh Office has put in an improved road system, with roads running up into the Valleys and new roads for both Cardiff and Newport.
While the rest of the country is stabilising, I expect to see growth continuing here over the next 10 years — it is South Wales’ turn now.
