Firm calls for WAG to market Cardiff to the world

Mar 6 2008 by Sion Barry, Western Mail

THE Welsh Assembly Government needs to work harder to promote Cardiff as an inward investment location, according to leading property figure Matthew Phillips.

The managing partner of the Cardiff office of international chartered surveyors Knight Frank, said despite a slowdown in inward investment projects in the UK, it was highly disappointed the last major non industrial project won for the city was financial services venture AIG in 2003.

Mr Phillips, whose firm last night unveiled its South Wales office market activity report for 2008, said he believed that the strong focus on Cardiff as an investment location had been lost since the merger of the Welsh Development Agency into the Welsh Assembly Government.

“When the Welsh Development Agency was in existence, apart from the last year following the merger announcement, it was very effective in putting the Cardiff office market offer on the table to investors,” he said.

“However, many of its property team either moved before the merger, or have since left the Assembly. Cardiff needs to be pushed harder. I am not saying there is a magic pot of inward investment projects out there. All regions in the UK are finding it harder.

“However, for Cardiff we are not seeing any inquiries, let alone deals. The last major office inward investment for the city was AIG with 40,000 square foot at Callaghan Square back in 2003.

“Yes, winning projects like Amazon in Swansea was really positive, but there has not been much of a push for Cardiff.

“There is also a vacuum which has not been filled since the winding up of Cardiff Bay Development Corporation.”

Mr Phillips said he was looking to the company established last year to market the capital to the world, Cardiff & Co, to help raise the profile of the city to potential investors globally – but that it had to work closely with the Assembly Government’s inward investment arm International BusinessWales to be truly effective.

Knight Frank’s report shows the take-up of office space in the capital last year was 540,000 sq f t, some 10,000 sq ft up on 2006 and in line with the long-term average.

However, the majority of the lettings (90%) were for deals under 10,000 sq ft or less and involved the relocation of existing businesses in South Wales.

Mr Phillips described the latest phase of developments at Callaghan Square as the “big success story” for the Cardiff office market over the past year. Its third speculative office development, covering some 43,000 sq ft in the centre of Cardiff, is fully let with tenants including Cru Investment Management and Lambert Smith Hampton.

The deals all achieved a record headline rent for grade A office space in Wales at £20 per sq ft.

Work on phase four and five, totalling 110,000 sq ft is due for completion next. “There is strong interest in all of it, which is encouraging,” said Mr Phillips, whose firm is joint agents for the scheme alongside DTZ for developers Rightacres and MEPC.

Longer term there are plans to develop potentially a further 700,000 sq ft of mixed used schemes at Callaghan Square.

In Cardiff Bay, Morley Fund Management’s Cardiff Waterside property portfolio is now 98% let, with only 5,000 sq ft remaining at Caspian Point.

Morley has started work on the speculative No 3 Assembly Square scheme. The 60,000 sq ft project is scheduled for completion in March 2009.

Mr Phillips said the project was being targeted at a significant inward investor. The ambitious scheme is being marketed at £22.50 a sq ft, which if achieved would make it the most expensive office location in Wales above Callaghan Square.