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Cardiff | UK

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Despite the current Covid-related challenges, Cardiff is a future-focused city with an exciting story to tell. Offering fantastic quality of life, attracting increasing levels of inward investment, huge amounts of planned infrastructure spend and strong population growth projections. Opportunities lie in facilitating this future growth; there is currently an under supply of high quality city centre office space and the growing population will require additional housing. 



Following several years of above trend performance, Covid-19 containment measures have restricted occupier activity in Cardiff and subsequently lowered leasing volumes. The year had begun brightly, with take-up of 64,364ft² registered in the first quarter. Q1 activity was focused out of town, with six deals outside the Central Business District (CBD) accounting for 70% of take-up during the quarter. The largest letting was to Target Group at Eastern Business Park, St Mellons, where the financial services advisor committed to a 12,300ft² refurbished suite. Availability has remained relatively stable in 2020 with Q3 Grade A supply at 191,651ft² and a city wide vacancy rate of 9%. Tenant release space has had a limited effect in 2020 as occupiers have continued to evaluate their occupational requirements but this is expected to increase as businesses implement future real estate strategy. Significant developments currently on site include the Interchange at Central Square prelet to Legal & General, the 107,000ft² first phase of John Street at Callaghan Square being speculatively developed by JR Smart and the refurbishment of Fidelity’s 1 Fusion Point providing 65,000ft² over 3 floors.




As government restrictions took hold in the second quarter, activity reduced markedly as occupiers began to comprehend an enforced work from home policy. Starling Bank’s expansion at Brunel House was the largest deal recorded in a move that will see the firm double their footprint in Cardiff. The first signs of businesses looking beyond the Covid-19 crisis were evident in Q3. Enquiry levels improved and tenants began to formulate their strategy for reoccupation, transition from 100% work from home and plan for future property needs. Legal & General, as Landlord, have had success following their comprehensive refurbishment of Hodge House where Intelligent Ultrasound (7,188ft²) committed to two suites including the pre-fitted Capsule space along with Currency Cloud another new entrant to Cardiff that took to a new 10-year new lease of 6,587ft². There were 15 office deals in Cardiff in Q3 double the count from Q2. Take-up showed a moderate improvement with 42,718ft² leased as the wider economic challenges caused by Covid-19 continued to affect the office sector. To contextualise, total take-up for 2020 (Q1-Q3) has reached 138,213ft², a sharp reduction when compared to 287,009ft² at the same point in 2019.


Whilst the pandemic is continuing to have an effect on the overall performance of the office markets across the UK, the commitment of occupiers such as Starling Bank, Intelligent Ultrasound and Currency Cloud offer encouragement in Cardiff. These demonstrate both the opinion of the market on the future role of the office, as well as highlight how Cardiff continues to build a diverse and resilient occupier base. Despite very challenging conditions in 2020, forecasts indicate that take-up activity will rebound in 2021. The fundamentals of the Cardiff market remain balanced with a well-defined core, limited supply of Grade A space, controlled development pipeline and a competitive rental profile when compared to competing UK regional cities. Post-Covid, the high quality of living on offer in Cardiff, the vibrant mixed-used city centre environment and excellent connectivity will be of heightened importance in attracting businesses and staff back into the city centre.



Despite the uncertainty of the past 12 months, demand for UK Industrial and Logistics space has continued to grow and has fared better than many other commercial property sectors. The forced shift to online deriving from Covid-19 containment has amplified e-commerce and led to rapid growth in demand for last mile / urban logistics. This has placed significant pressure on traditional logistics space in and around town centres. Whilst South Wales is not a main retail distribution market, this changing shift in shopping habits has gathered momentum locally and created new requirements for mid-size units. The lack of good quality stock has not only encouraged logistics operators to consider new build, but also more traditional industrial owners. It is interesting to note that national operators are not baulking at the higher headline rents required, as acquiring the right building in an optimum location is essential to their business.




Development to date has been limited to distribution/last-mile logistic facilities with 50,000ft² developed at St Modwen Park, Newport, which was let to Amazon. St Modwen are currently on site speculatively developing a further 30,000 and 100,000ft² that will be available in 2021. Similarly, Trebor Developments are progressing the speculative development of 46,000ft² at Junction 35, Pencoed and last year Border Group completed the construction of 50,000ft² in Crumlin, Caerphilly that has since been let. In addition, development of smaller workshop and business units of up to 1,500ft² has been continuous. This type of development is typically built in phases and on sites of between 1 and 2 acres. The design and layout of the product, centres on occupiers who do not require large amount of circulation and deep loading yards. Local companies that want to own their own property is the main source of demand for this product and sustained demand is driving up capital values. Many developers though have chosen to retain an interest and units of this type have let well when offered to market. For example, in a development close to Junction 32, six units of between 1,000ft² and 1,500ft². were constructed. Five of the units let before practical completion.



The Residential market, like the majority of industries in the UK came to a sudden and grinding halt at the start of the first Covid-19 lock down. However once the Residential Market was unlocked in June, it has surged to new highs with intense activity across all price bands. The drive has been brought about by prospective buyers reassessing their needs, wants and aspirations which has led to this boom. The pandemic has helped focus people who may have been holding back on their plans for a variety of reasons, the likes of Brexit to name just one. Remote working, now a part of working life due to Covid, is enabling people to seek a better work life balance which can accommodate office and garden space within their Residential dream. As a result, Cardiff remained a property hotspot within South Wales, with an average house price of €309,297 (£264,474). This is well above the Welsh average of €219,114 (£187,361). Cardiff’s popularity as a place to live, combined with an increasing population in the 25-30-year old age group, has resulted in increased demand for housing of all types. The Cardiff Local Development Plan (LDP) was adopted in 2016 that identified several new housing allocations that will deliver approximately 41,000 new homes during the plan period up to 2026. Several of these sites are beginning to deliver new housing units, however most are providing traditional family housing due to the suburban environment, accessibility to good schools and other facilities.




There is a current lack of new build accommodation under construction in the city centre. In recent years, sites that have become available have been largely taken up by developers of student accommodation due to the cost value equation. At present, there are only a handful of active schemes being undertaken by niche operators for open market flatted housing, these include Brickworks, Trade Street (Portabella), Bayscape, Cardiff Bay (The Marine Group), Schooner Wharf, Atlantic Wharf (Morganstone / Cardiff Community Housing Association). With regard to the Build to Rent (BTR) sector otherwise known as the Private Rented Sector (PRS) the proportion of people living in private rented accommodation in the city centre has almost tripled since 2001. The traditional residential property ‘for sale’ market in Cardiff has seen a steady rise in values over the past few years as evidence by the transactions achieving average sales value within the range of €392 (£335) per ft² to the target of in excess of €468 (£400) per ft².



The Covid-19 pandemic forced the temporary closure of non-essential retail stores across the UK in March 2020 and encouraged many shoppers to look at options for home delivery for both essential and non-essential items. The Welsh government imposed a further two-week lockdown in October / November and nonessential retail stores were ordered to close once again. The Office for National Statistics data for September, showed that, across the UK, non-store retailing sales volumes were 36.6% higher in September compared with February, as consumers continued to carry out much of their shopping online. More than a quarter (27.5%) of retail sales in the UK are now online, compared to 19.2% in 2019. The shift to online shopping has been more pronounced in Wales, compared with other regions of the UK. According to a recent YouGov survey, 39% of Welsh consumers are shopping more online than during lockdown. This compares to 27% in Northern Ireland, 32% in England or 36% in Scotland. In Wales, 79% of consumers had 1-3 packages delivered per week during lockdown compared to 69% of English consumers. The most purchased items across Wales during lockdown included home and garden items, followed by alcohol, as well as health, beauty and fragrances.


Although Welsh consumers are shopping more online, a recent survey for Visa (conducted in September 2020), found that 78% of shoppers in Cardiff are shopping with local small businesses as much or more since lockdown was lifted – both in person and online. There remains an interest in supporting local businesses and the local community even if customers are reluctant to shop in store. The shift in retail activity from in-store to online is impacting the amount of warehouse space required by retailers. We are already seeing rising demand for space from online retailers across the UK, seeking to expand their networks and capture a share in this growing market. In Cardiff and across the South Wales region, we are seeing rising demand from distribution companies for last mile and urban logistics and this is trend is set to continue.




Analysis by Knight Frank Research shows that every £ billion of online sales requires approximately 1.36million ft² of warehouse space. Compared with other regions of the UK, the shift to online shopping has been even more evident in Wales and this could mean a significant uptick in demand for warehousing space in South Wales, particularly around Cardiff and along the M4 corridor. The South Wales warehousing market offers attractive pricing, relative to other regions of the UK. Despite being a relatively peripheral market, 66% of the UK population reachable within 4 hours HGV drive time (from junction 32 of the M4). Along with Cardiff, this encompasses major population centres including London, Bristol, Birmingham, Manchester and Liverpool. The removal of the Severn Bridge tolls has also helped boost demand in the region. Take up has been limited by a lack of new development and lower quality of stock. However, there has been a rise in development recently, including phase 2 of St. Modwen Park Newport. The development of high-quality industrial and warehouse space will be key to seizing the opportunity in online retail and logistics in order to encourage businesses to locate in South Wales and attracting investment and jobs to the region.



Since 2005, Cardiff’s carbon emissions have reduced in the domestic sector by 38% and in the industrial and commercial sector by 55%. The Welsh Government are committed to the UK target for net carbon zero development by 2050 while Cardiff Council are aiming for 2030. As part of Cardiff Council’s “One Planet” strategy, tree canopy coverage will be increased by 25%, and historic canals in the city centre redeveloped as part of a sustainable water management scheme to avoid flooding. A new solar panel farm opens this month at the former Lamby Way landfill site, this will generate enough energy to power 2,900 homes for 35 years. The council is also planning a low-carbon heat network and would replace gas boilers in major buildings. Cardiff real estate is well positioned to take advantage of this trend. Cardiff developments have been awarded 130 BREEAM certificates, issued since 2008. More than half of these (68) were rated outstanding or excellent. Across all sectors, there are currently 25 schemes in progress across Cardiff that have been designated to achieve BREEAM ratings, 15 of which are designed to achieve Outstanding or Excellent ratings. The largest of these is an extension to Cardiff university post graduate research campus, due to complete in 2021. With Cardiff Council aiming for net carbon zero by 2030, then any purchaser of a new scheme will want it future-proofed to protect their exit values. This policy is promoting sustainable development in Cardiff and providing buildings that align with investor strategies.



Although additional Covid restrictions were put in place, the final quarter of 2020 exampled cautious activity. Office take-up was 166,810ft², the highest quarterly total of the year, whilst investment volumes reached €87.2m (£74.6m), double the 10-year quarterly average. While the temporary closure of non-essential retail stores hit hard on retail commercial estate. it prompted greater demand and hence a promising investment opportunity in logistics sector. Current lack of new build accommodation in the city centre in light of a population growth also suggests further acceleration in development activity in residential sector. 

For more information, please see:

The Cardiff Report 2020 by Knight Frank

UK Cities Cardiff Q4 2020 report by Knight Frank


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Bloom secures planning for London ultra-urban warehouse developments (GB)

Voice Of EU



Bloom has secured planning consent for two developments in central London. The developments are located in Hackney and Brixton and are the first to be carried out by Bloom for its €290.4m (£250m) ultra-urban warehouse joint venture with Angelo Gordon to acquire and develop sites in central London. In Hackney, on a site by the A12 next to 331 Wick Road, Bloom will develop two units, totaling 14,045ft², designed by Michael Sparks Associates. Construction will start next month, with completion expected in April 2023. In Brixton, at 146-156 Brixton Hill and Units 5 & 6 Waterworks Road, Bloom will develop five units, totaling 35,360ft², designed by Chetwoods. Construction will start in September, with completion expected in August 2023.


Both developments will be targeting a BREEAM sustainability rating of ‘Excellent’ and an EPC rating of ‘A+’ in accord with Bloom’s core sustainability objective to reduce greenhouse gas emissions through construction and operational efficiency. The schemes will include extensive urban greening through the implementation of green walls, green roofs, increased landscaping, bird boxes, and insect hotels to significantly improve the biodiversity; renewable energy in the form of solar photovoltaic panels on the roofs; and lorry, car, and cycle EV charging points to encourage sustainable and active modes of transport as well as enhanced power capacity to accommodate future EV transport technologies.


Tom Davies, co-founder of Bloom, said: “Our first two planning consents represent an important milestone for the Bloom team, which is working hard to deliver high-quality and design-led industrial and logistics schemes in supply-constrained inner London sub-markets”.


Sam McGirr, co-founder of Bloom, said: “These planning consents for well-located sites give us the opportunity to meet the high demand for convenience and speed from businesses, such as F&B delivery, post and parcel, e-mobility, self-storage and urban logistics and consumers in the local communities”.

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Could equity release be used to help more younger homebuyers?

Voice Of EU



Younger first-time buyers could be given more financial help from the Bank of Grandma and Grandad, through the use of improved equity release products, a new report suggests.

The document written by Tom McPhail, of consultancy The Lang Cat, claimed that younger buyers are missing out because older members of their family are unable to satisfactorily tap into their property wealth.

Mr McPhail said: ‘Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations.

‘An equity release by grandparents of say £20,000 now, could be transformational for a 20 something struggling to raise a deposit and get on the housing ladder but would make only a very modest dent to the value of the grandparent’s house.’

Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations, says new report

Releasing some of the equity in a property means older homeowners can choose when and how they share their wealth with younger generations, says new report

The report acknowledged that equity release has endured a poor reputation in the past after customers suffered ‘severe’ financial knocks.

The sector has been criticised for encouraging people to take on debt, particularly later on in life.

There has also been other concerns about equity release, such as customers falling into negative equity where the value of a property is less than the loan taken out against it when house prices fall.

The report suggested that while the equity release sector has since begun to put ‘its house in order’, it is ‘still not perfect’ and some regulatory safeguards need to be strengthened.

It called for several issues to be looked at, including early redemption charges on equity release products.

It said that most providers apply a simple sliding scale of charges, for example 10 per cent in year on to 1 per cent in year 10.

However, it claimed that some providers apply an early redemption charge based on prevailing gilt rates at that time, putting customers at an ‘unfair disadvantage’.

This is because the fees are not transparent as there is no way a customer can know in advance whether they’d be liable for a charge and if so, how much. 

In the past, customers have also fallen foul of the small print on their equity release loans when it comes to early-redemption penalties – such as couples who must pay an exit fee unless both of them need to go into care.

The report also raised questions about interest rates on equity release products. It said providers should be consistent with their lending criteria and not move the goalposts after customers have taken out a loan, as this can make it harder for them to access a top-up loan in the future, potentially forcing them to remortgage. 

Equity release products could help people access their property wealth to help younger members of their family onto the property ladder

Equity release products could help people access their property wealth to help younger members of their family onto the property ladder

The report argued that equity release products could help people access their property wealth to help younger members of their family onto the property ladder.

Mr McPhail added: ‘Raising a deposit has become an increasingly significant barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations.

‘Releasing some of the equity in a property allows older homeowners to choose when and how they share their wealth with the younger generation.

‘This more targeted approach gives them greater control to use their assets to the maximum benefit at the point of need.’

Raising a deposit is a barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations, says the report's author Tom McPhail

Raising a deposit is a barrier to getting on the housing ladder, with increasing numbers of first-time buyers having to rely on financial help from older generations, says the report’s author Tom McPhail

Equity release: How it works and advice

To help readers considering equity release, This is Money has partnered with Age Partnership+, independent advisers who specialise in retirement mortgages and equity release. 

Age Partnership+ compares deals across the whole of the market and their advisers can help you work out whether equity release is right for you – or whether there are better options, such as downsizing. 

Age Partnership+ advisers can also see if those with existing equity release deals can save money by switching. 

You can compare equity release rates and work out how much you could potentially borrow with This is Money’s new calculator powered by broker Age Partnership+.* 

 * Partner link

Jonathan Harris, of mortgage broker Forensic Property Finance, said: ‘Equity release has historically been viewed as a ‘murky’, high-risk sector, fuelled by minimal regulation, poorly-qualified advisers, only a handful of lenders and extortionately high interest rates.

‘Fast forward to today and we see a dramatically transformed sector, benefiting from strict regulation, highly-qualified advisers, multiple lenders and access to very competitive interest rates. 

‘Not surprisingly, equity release is now a viable and growing market for older borrowers looking to utilise the gains seen on property prices to bolster lifestyles, as well as pass on wealth to children when they need it.

‘Those considering equity release should make sure they understand the implications and involve family in any decision-making. It is always important to seek advice from suitably-qualified advisers.’

It comes as a separate report by Legal & General suggested that one in every £90 spent by retired Britons is funded by equity release.

It said that equity release funded an estimated £3billion in retirement spending last year, although it didn’t mentioned the money going to younger generations towards buying a property.

Instead, the report’s survey of 2,000 homeowners found that those with equity release have most frequently used the product to finance home improvements, at 26 per cent.

It said equity release is also being used to support costs such as medical expenses at 17 per cent, maintaining living standards in retirement at 16 per cent, and paying off personal debt at 16 per cent, for example paying off interest-only mortgages. 

It suggested that equity release is likely to play an increasingly important role in financing care-related expenses, with 19 per cent of prospective homeowners citing it as a consideration.

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Allianz Real Estate buys prime office building in Rome (IT)

Voice Of EU



Allianz Real Estate, advised by Dils, has acquired an office property in the centre of Rome. The transaction, worth circa €175m, is one of the most important to have been carried out on the real estate market in Rome in recent years.


The building, consisting of eleven storeys, comprising nine above-ground and two underground, has a gross lettable area of circa 22,000m² and has undergone a major refurbishment, offering the highest environmental sustainability and energy efficiency standards (LEED Gold Certification). The strategic location, between the CBD and Termini Station, is enjoying great success, especially among corporate occupiers. 

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