John Newton, Partner in Charge of the Cardiff office of Tuffin Ferraby Taylor (‘TFT’), a leading independent building and property consultancy, has forecast what the coming year will bring for the construction and property sector in South Wales:
The end of 2014 has seen the announcement of a string of major construction projects in South Wales, which could signal the start of a regional construction boom particularly around Cardiff in 2015.
The major infrastructure projects, together with significant office, retail and residential development across the city and farther afield are part of the region’s bid to compete as a realistic contender not only in the UK, but on the world stage.
Admiral has just moved into its 220,000 sq ft headquarter building in Cardiff’s city centre and construction is already underway on two further large office schemes at 2 Capital Quarter and 1 Central Square, which will provide another 220,000 sq ft of Grade A accommodation to the market place. This is likely to be followed closely by another 90,000 sq ft of similar accommodation at Callaghan Square. Taken together, we are seeing the commencement of projects that will provide near to 3,000,000 sq ft of new mixed-use development over the next ten years. The first of the buildings on each of these three important developments are likely to be completed late 2015 or early 2016.
There is already good occupier demand in the region for such buildings with named occupier requirements for over 300,000 sq ft of office space. These include Deloitte, Legal and General, Blake Morgan, Hugh James, Geldards and Parsons Brinkerhoff to name a few. The construction of this Grade A accommodation to attract such tenants will inevitably interest property investors once completed, particularly at a time when London is seen as producing limited options due to intense competition from international investors.
Large-scale development is not only predicted for the office/retail markets; there are also significant proposals in terms of leisure and residential schemes. The Sports Village in Cardiff Bay is progressing with the Ice Rink under construction and further plans afoot. There are significant residential proposals at the former Wiggins Teape paper mill in Cardiff Bay and at Dumballs Road, which will be out-scaled by a Redrow-led 7,000-home garden village to the western fringes of the city, announced last week.
The region’s infrastructure is also under the spotlight and must keep apace with technology to service the proposed developments if they are to achieve their economic aims. Work to electrify the London to Swansea and Valley railway lines is already in progress, which will reduce journey times dramatically. To shorten travel times, further improvements are necessary to the road network, particularly around Newport, and the airport is a major current concern that is being examined by the Welsh ministers. Do not be surprised if further announcements are made in 2015 in this respect as the region seeks to punch above its weight to achieve a competitiveness to attract world attention.
All in all, the prospects look good for 2015 with a level of activity not seen in the region for a number of years. Whilst there is still work to do to bring all of the potential to the table, there is a new wave of optimism for the construction and property industries, which are seen as a spearhead to drive the economy on from the recent recession.