The Big Nine

In focus: Cardiff
Office demand remains
strong in Cardiff city centre.
The first half of 2016 has
maintained the high level
of take-up achieved in
2015, at a third above the
five year average.
The key deal in Q2 was to an
undisclosed public sector occupier who
took circa 55,000 sq ft over four floors at
the refurbished Brunel House. This deal,
which Bilfinger GVA acquired, leaves
Cardiff city centre with a shortage of
good quality grade B accommodation.
Cardiff University took another significant
deal of 29,000 sq ft at Friary House.
There were also a number of notable
out of town deals completed between
8,000 and 9,000 sq ft, in a market
where transactions tend to be up to
4,000 sq ft.
Immediately available grade A space
in the city centre has increased recently
to around 140,000 sq ft, from the very
low level of the past two years. This is
a result of a number of completions
including One Central Square and 2
Capital Quarter, as well as the grade
A refurbishment of 2 Kingsway. JR
Smart has also started on site with the
construction of circa 75,000 sq ft at 3
Capital Quarter.
Based on the ten year average grade
A take-up rate of 135,000 sq ft per
annum, this equates to about a year’s
existing grade A supply, although
there are strong expressions of interest
across the majority of it. There is also 7
months’ supply of speculative space
under construction. Headline rents have
increased markedly over the past 18
months rising from £21.50 to north of £24
psf, with rent frees falling from 21 to 15
months on a ten year term. This equates
to a net effective rent of £21.60 psf.
The outlook remains positive with a
number of notable potential active
requirements including Network Rail,
PwC, Cardiff University and Lewis Silkin
coupled with the on-going requirements
for the new public sector Hub.
Tom Merrifield
Director, Cardiff
Rents and Yields
City centre headline rents Q2 2016 (£psf)
Location Rents (£) Rent free (mths
on ten yr term)
Net effective
rent* (£)
Manchester 34.00 24 28.05 26.40
Edinburgh 32.00 18 28.00 27.13
Birmingham 32.00 24 26.40 23.25
Glasgow 30.00 21 25.50 25.08
Bristol 28.50 18 24.94 24.94
Leeds 26.50 18 23.19 23.85
Cardiff 24.00 15 21.60 19.13
Newcastle 21.50 9 20.43 18.28
Liverpool 21.50 33 16.13 16.28
Average 27.78 20.00 23.80 22.70
*Including rent free period less three month fit-out.
Net effective
rent (£) Q2 2015
Out-of-town headline
rents Q2 2016 (£psf)
Location
Rents
(£)
Manchester (South) 20.00
Bristol 21.00
Birmingham (Solihull) 21.00
Leeds 18.00
Newcastle 16.95
Glasgow 16.50
Edinburgh 16.50
Cardiff 14.50
Liverpool 14.00
Average 17.61
Prime city centre yields
Location
Q1
2016
Q2
2016
End
2016
Birmingham 5.00 5.00 5.25
Bristol 5.25 5.25 5.50
Cardiff 5.75 5.75 6.00
Edinburgh 5.25 5.25 5.50
Glasgow 5.25 5.25 5.50
Leeds 5.25 5.25 5.50
Liverpool 6.00 6.00 6.25
Manchester 4.75 4.75 5.00
Newcastle 6.00 6.25 6.50