The Cardiff office market has gone from strength to strength in the last few years as large office requirements such as those from HMRC and BBC Wales have boosted the city’s take-up figures.

New developments at One Central Square and Capital Quarter have allowed the city to comfortably provide a home for a number of these occupiers. Take-up in the first half of 2018 was, however, down on last year so what is in store for the rest of the year?

The city, like others across the country, has lost office space through its conversion to student accommodation. This has meant there is a potential shortage of office space in the short term, particularly of good quality city centre Grade B space. Coupled with continued demand for Grade A offices this doesn’t look like it will change.

Half year take-up for Cardiff reached 142,485 sq ft, compared with 211,954 sq ft for the same period in 2017. The dip in the figures is a result of the boost of several large deals provided in H1 last year, such as Cardiff University at 2 Central Square (45,000 sq ft) and Network Rail in St Patrick’s House (31,500 sq ft).

There has been a higher number of smaller deals seen this year, with the largest so far being Which? Limited taking 11,550 sq ft at 3 Capital Quarter. The majority of the deals have fallen into the sub-5,000 sq ft bracket though, with a total of 49 recorded of this size in the first half of 2018.  

Encouragingly, there is now a number of larger requirements from companies actively seeking new space in Cardiff. This could see a high proportion of the available Grade A space taken by the end of the year. However, looking ahead to the twilight of 2018, we still don’t expect take-up to exceed 425,000 sq ft, someway below last year’s 703,000 sq ft,  but it’s worth noting 2017 was a record year for the market.

One to watch though is serviced offices. Cardiff currently has limited co-working space, however there has been an upward trend in activity by serviced office providers. BizSpace bought Trafalgar House earlier this year for its first centre in Cardiff and Chadwick Business Centres has opened another centre in Cardiff at W2 in Wellington Street. There are also other unsatisfied serviced office operator requirements in the market.

Another sector to keep an eye on is media, with the new BBC Wales HQ already attracting related companies into the city, for example Splice Media recently opened their first office in the city.

As the demand for co-working and serviced office spaces increases and the attraction for Cardiff as a media hub continues, there is opportunity for landlords to think of less traditional office fit-outs and tenants. This may well take the pressure off Grade A space and encourage the growth of start-ups and smaller firms.

Further information

Contact Savills Cardiff