After treading water for the past three years, a fresh wave of optimism is beginning to lap over Cardiff Bay.
The Welsh capital’s waterfront property landscape has been a virtual no-go area for commercial speculators since 2000. Instead, its skyline has been dominated by the activities of housebuilders, which have completed, or committed to, more than 3,000 apartments in that time.
But save for this residential onslaught and the gradual filling up of the area’s Mermaid Quay scheme (see box), owners of commercial buildings have found little demand for their Cardiff Bay space.
But Cardiff’s property stakeholders and agents are claiming there is renewed interest.
“It’s been a horrible time for the bay, with very flat enquiry levels,” says Roger Thomas, chairman of Cooke & Arkwright, and a long-standing promoter of the Bay. “But in the past few months, it is as if the doubters have woken up to what the bay has to offer.”
Renewed confidence in the market
One developer that has committed to schemes in anticipation of an upturn is the Dovey Group, which has recently started work on its 110,000 sq ft speculative Neptune Park on a 5.7-acre site at Ocean Park.
Meanwhile the AWG/Landmark joint venture that has recently sold its forward-let 54,000 sq ft Fusion Point building for £12m, leased by Zurich Insurance, is certain to build another 60,000 sq ft of speculative space.
Cardiff law firm Leo Abse & Cohen could soon be in the market for 15,000 sq ft in the area, while engineering giant Halcrow also has bay space on its shopping list to meet a 12,000 sq ft requirement. There is even talk of South Wales Police approaching a developer to build a 80,000 sq ft regional HQ.
Thomas believes that much of this confidence has been created by house building.
“High-quality and high-cost apartment schemes have proved extremely successful and this has given the commercial sector confidence,” he says.
This faith is not only confined to the office sector. The long-awaited Cardiff International Sports Village has started on site at a £700m, 81-acre mixed-use redevelopment, and the £105m Wales Millennium Centre opera and concert hall is nearing completion.
News that a £45m Richard Rogers’ Welsh Assembly debating chamber will definitely go ahead has helped boost the bay’s fortunes, while the Welsh Development Agency’s plans for a 1.6-mile waterfront residential and commercial scheme on a 37-acre former docks site are likely to be given the green light in the next few weeks.
Steve Pritchard, regional property manager for Associated British Ports, which is the major landowner in the bay, says: “We would be the first to admit the market has been quiet in recent times and it’s a matter of record that our Caspian Point office scheme continues to have vacant space.”
Sub-dividing floors sparks interest
In the past few weeks, ABP has abandoned plans to find larger occupiers for Caspian and has agreed to sub-divide floors in the building. While ABP is a long way off fulfilling its ambitions of extending Caspian by another two phases to its planned total of 197,000 sq ft, this decision has rekindled interest.
The Confederation of British Industry is close to taking space in the building for its Wales HQ, spurred on by its proximity to the Welsh Assembly building. Other lobbying and professional trades bodies are also showing interest.
When the Wales Millennium Centre opens next year it will have been nine years since plans for the project were thrown into disarray because an early architectural design was rejected.
Since then, new architect Jonathan Adams’ Armadillo-shaped “vision of slate and steel” has gained a legion of fans, among them ABP’s Pritchard.
He hopes that both the WMC and the Rogers-designed debating chamber will spark further interest among office occupiers. “People like to be alongside landmark buildings and we’ll have two of the best.”
Pritchard says the area does need the leisure facilities that the sports village promises.
These include an Olympic-size swimming pool due for completion by the end of 2005 an arena and, if an operator can be found, a snow dome. On a nearby site, Taylor Woodrow is building 450 apartments through its Bryant Homes brand.
Cardiff council leader Russell Goodway describes the Cardiff Bay project as its top regeneration priority. The scheme has been granted planning permission and agreements are in place with key partners on land disposal, environment and infrastructure procedures including the Welsh Assembly, the WDA, the Environment Agency and ABP.
The WDA is also positioning itself to benefit from any resurgence in the bay and has secured a ringside seat in the shape of a £10m former dockside storage site, bought from ABP.
Paul Williams, head of regional development for the WDA in south-east Wales, says the site will ultimately provide space for almost 600,000 sq ft of offices and more than 1,000 homes. “The site is a natural extension to the central redevelopment of Cardiff Bay,” he says.
Land remediation work will be funded by the gradual sale of sites to house builders, while the WDA hopes to be in position to seek development partners for the commercial element of the scheme from late 2004.
“We will look at much more than cost. Sustainability, quality of design and innovation will all be essential elements,” says Williams of the development.
Estimates suggest the site could have an end value of £75m. Meaning that with the millennium centre, sports village, debating chamber and residential developments planned, the bay area is on the verge of a public and private sector spending spree that will add up to more than £1bn in the next decade.
|
Bars flourish in place of Covent Garden-style retailers |
|
One constant criticism of Cardiff Bay has been its failure to attract quality retailers. While the sports village looks set to sign Waitrose, Next and Marks & Spencer, the site will still not be within walking distance of the office quarter. For almost a decade, the £25m, 150,000 sq ft Mermaid Quay jv between Sovereign Land and Schroder Exempt Property Unit Trust has been the only opportunity for occupiers looking for leisure or retail space. But despite its monopoly, Mermaid Quay has not attracted the Covent Garden-style retail operators it set out to lure. However, leisure and bar operators have taken space in the waterfront site that has fast become the city’s dining capital. Sovereign MD Graeme Newman believes retailers were reluctant to take space outside the city centre because, until the past 12 months, the bay has not had enough people living and working in it. “I’m not too disappointed because of the opportunities it’s given bar and restaurant operators,” he says. Only six units remain and discussions are at an advanced stage with occupiers again leisure operators. Most recently FT5K opened its second Cardiff café, and Welsh firm SA Brain & Co opened Salt and Terra Nova on the waterfront. |
