Cardiff is set to have an interesting couple of years with rail electrification cutting journey times to London and the new City Deal bringing £1.2 billion of investment to the city. Both projects will stimulate significant occupational and investor demand across the region.

The Cardiff office market has performed strongly throughout this year, with take-up levels to September reaching 34 per cent above the long-term average. Occupiers are keen to take space in the city centre, with those on the fringe of the city looking to move back in, attracted by new developments such as Central Square and Capital Quarter. Take-up could exceed 600,000 sq ft this year, which is encouraging news, with HMRC also expected to make a decision on the location of its new 270,000 sq ft office in the city within the next few months.

In particular, there has been a steady increase in activity from creative and tech firms over the last year. The decision to move the BBC Wales headquarters to a new development in Cardiff (due to be completed in 2018) will act as a further catalyst for clusters of media and tech companies nearby.

Many of these firms require space that is flexible with breakout areas and hubs for networking and co-working. In many instances they are also attracted by less conventional office space, with stripped back interiors without the traditional hallmarks of the modern office such as suspended ceilings and raised floors. A good example of this trend can be seen at 101 St Mary Street where the landlords carried out a high-quality ‘defurbishment’ to expose services and brickwork with the aim of providing an inspiring workspace like that found in East London and other creative hubs.

At the moment Cardiff’s reputation as a creative hub is in its infancy. However, we expect the shift to these new working spaces is something that will continue over the next couple of years.

A number of these high-quality refurbishments are also likely to benefit from the lack of new Grade A stock available in 2016/17 with no new builds available until mid 2017. There is also a shortage of large floorplate stock in the city centre which is contributing to the heightened interest in refurbished space and pre-lets.

Overall, the future is looking rosy for Cardiff’s city centre market.

Further information

Contact Savills Office & Business Space