Take-up

In the final quarter of 2023, take-up in Cardiff totalled 63,000 sq ft across 19 deals done. This was 5% below the total in Q3 2023 and 44% below the five-year average. Overall, 79% of deals were sub 5,000 sq ft, continuing to show occupiers' preference for smaller space.

Grade A take-up totalled 19,000 sq ft in Q4, comprising 30% of the total over two deals done. The largest deal for Grade A space acquired saw Rolls-Royce occupy 13,000 sq ft at St David's House.

Supply

At the end of the quarter, total availability stands at 1.5 million sq ft, 3% down on Q3 2023 and 2% down on Q4 2022 supply, with 75% of this availability being secondary space. Although take-up has decreased in 2023, the vacancy rate has continued to decline to 13.9%, a decrease of 50 basis points from Q3 2023.

Current Grade A availability in Q4 equates to 384,000 sq ft, which accounts for 25% of the overall total. This represents a 3% increase on Q4 2022 Grade A levels.

Take-up by business sector

The most active sector during Q4 2023 was the 'TMT' sector, accounting for 37% of the total. The sector leased a combined total of 22,000 sq ft over four transactions in the quarter, the largest total of take-up since Q2 2022.

The sector that leased the second largest proportion of take-up was the 'Insurance & Financial Services' sector, with a combined total of 9,000 sq ft, 15% of the overall total. The largest deal in the sector was All Clear Insurance Services Ltd, which leased 6,000 sq ft of space at Churchill House, therefore accounting for 69% of the sector's take-up.

Rents

There was no change in the Prime rent in Cardiff during Q4 2023, with the Prime rent remaining at £25 per sq ft. There has, however, been an increase in 2023 overall, with average rent rates rising for Grade A space to £23 per sq ft. This represents an increase of 4% on 2022 average Grade A rents, therefore closing the gap against Prime rents in the market. Looking at growth forecasts, it is expected that Prime rents in Cardiff will reach £28 per sq ft during 2024 and could potentially reach £30 per sq ft by the end of the year if a pre-let is achieved in the speculative John Street development.

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