Take-up

Total take-up in H1 was 148,463 sq ft which was broadly in line with the five-year H1 average for the market. Q2 take-up of 70,000 sq ft was 29% above the five-year Q2 average, albeit 17% below the ten-year average as the market continues to operate under challenging conditions.

From a deal count perspective, there were 53 completed transactions in H1 2023. This was 26% above the long-term H1 average and the second-largest number of completed H1 deals in the last ten years.

Supply

Total availability at the end of H1 stood at 1.53m sq ft. This means that availability decreased marginally by 2% in the first half of 2023. Grade A supply stood at 425,000 sq ft at the end of the quarter which represented a 14% increase on the Q4 2022 total. That being said, Grade A availability still only accounts for 28% of the total market supply, and Savills expects this to fall further in the remaining quarters of 2023.

Total vacancy rate for the market stood at 14% at the end of Q2. The Grade A vacancy rate remains low, reaching 3.9% at quarter end.

Take-up by business sector

The TMT sector was the most active in H1 2023, accounting for 22% of total take-up. This was spread across five transactions which included the 19,000 sq ft Grade A letting to Veezu at Hodge House, which was the largest deal in the first half of the year.

Elsewhere, it was a strong start to the year for the Professional sector. Take-up for the sector reached 18,500 sq ft, accounting for 12% of the take-up total. This puts the sector on track to improve its total annual market share in 2023 after recording a 10% share of demand in 2022.

Rents

There was no change in the prime rent in Cardiff during H1 2023. Although the prime rent remains at £25 per sq ft, Savills latest rental forecasts are expecting the prime rent to significantly increase in Cardiff to £30 per sq ft in the second half of 2023. This would represent an impressive growth rate of 20% for a market that has not experienced prime rental growth since 2016.

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