Cardiff is on the edge of becoming a global capital city, yet needs to embrace change in order to achieve this desired status, according to an office market report by Knight Frank.
In recent years Cardiff has developed into a vibrant commercial centre and its profile continues to grow across the leisure, retail and business sectors.
Both office leasing and investment markets are performing well despite current political uncertainty and leasing levels in the city reached 485,456 sq ft at the end of Q3 2016, a total already above the 10-year annual average for the city. Prime headline rents have also increased for the first time since 2012, now standing at £25.00 per sq ft, with current forecasts indicating prime rents will rise to £26.00 per sq ft by the end of 2017 as more new developments complete.
In the investment market, total office investment sales from Q1 2016 – October 2016 amount to £106.3m, and although this is less than the full year total for a somewhat extraordinary 2015, it still sits at 29% above the 10-year average.
The city has seen the highest concentration of overseas investment in the city since 2011 and the globalisation of the capital is said to be driving this shift in purchaser profile, as investors look outside of the traditional target markets of Central London and the South East.
Amongst the sectors having an influence on Cardiff, the importance of TMT (Technology, Media and Telecoms) cannot be overlooked. The city is moving away from its industrial past and fast becoming one of the UK’s major digital hubs, with the TMT sector in the city worth 3% of the digital GVA contribution to the UK economy.
Matt Phillips, head of Knight Frank’s Cardiff office commented: “Cardiff is on the edge of becoming a regional power within the UK and a global capital city. The delivery of new infrastructure is absolutely integral to Cardiff’s long-term growth. The city needs to harness and adapt to the changing order to become a truly global capital. Intelligent investment now, will mean South Wales and Cardiff will reap the benefit for years to come.”
Cardiff has a strong base to achieve its goals but must ensure it stays focussed on the factors that will help it progress towards its global status, which can be broken down into three key points:
- Enhance the skill base – In order to be fully competitive, Cardiff’s talent needs to be nutured, developed further and most importantly retained in the region. Cardiff’s universities are delivering the workforce of tomorrow but the city must ensure it can deliver a career path for this talent
- Deliver the Cardiff Capital Region - Sensible and targeted investment is needed to ensure infrastructure proposals are delivered. Connectivity is necessary in two areas: High-speed fibre connectivity aligned to both households and businesses. Secondly, ensuring fast transport connectivity across the capital region will be a critical factor in the locational analysis of major occupiers.
- Establish Cardiff as a UK Media & Creative Hub - Creative industries are the fastest growing sector globally. Cardiff is already home for three major broadcasters, independent TV production companies and digital media clusters. The city will need to embrace TMT firms, providing appropriate infrastructure and encouragement of the talent base through education and business support – if successful it could become a major centre for creative industry in the UK.