Cardiff has seen less than half the office take-up during lockdown that it did in the first quarter of the year, according to the Avison Young Big Nine report. There were eight deals in Cardiff in Q2 amounting to 31,000 sq ft of take-up. In Q1 the city saw 64,000 sq ft.
The dramatic effect on take-up is evident across all the Big Nine cities in the UK. Across these markets – Cardiff, Bristol, Manchester, Leeds, Glasgow, Edinburgh, Liverpool, Newcastle and Birmingham – the take-up is the lowest since data was first recorded for the Avison Young report in 2009.
The majority of Cardiff activity has been in the city centre, including the two largest deals – Starling Bank taking 14,000 sq ft at Brunel House, and the estate agents Jeffrey Ross taking 9,900 sq ft at 11-13 Penhill Road. The largest out-of-town deal was 1,633 sq ft taken at 13 Lambourne Crescent.
Tom Merrifield, Director & Head of Commercial Agency at the Avison Young Cardiff Office, says:
These figures come as no surprise. During the quarter there have been significant practical difficulties in conducting viewings and due diligence with occupiers either delaying or putting their occupational requirements on hold, while many have been reassessing their spatial requirements.
As lockdown now eases, we expect life to return to the market gradually. In recent weeks we have seen a steady increase in the general appetite and demand being demonstrated with a number of larger requirements of 10,000 – 30,000 sq ft size range being circulated, offering optimism for a quicker recovery.
In terms of development, the Central Quay scheme is attracting much interest. The Brewhouse will be the first project of the scheme that will provide 54,000 sq ft of office space, with construction starting in Q4 2020 and completion expected at the end of 2022. In addition, demolition works were being carried out last quarter at Central Quay for the 220,000 sq ft Ledger Building.
Elsewhere, the construction by JR Smart at John Street, Capital Quarter is still underway after work commenced in the summer of last year. When complete, this will provide 109,000 sq ft of Grade A office space with floor plates of 13,000 sq ft. Also, the refurbishment of 65,000 sq ft Fusion Point One on Dumballs Road will complete later on this year.
Headline rents in Cardiff city centre are currently holding up at £27.00 psf but anecdotally rent-free periods are moving out, reflecting the delays caused by Covid and the difficulties in fitting out space.