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No grade A office deals in Cardiff say's DTZ Research Property Times Cardiff Q3 2012

wantspacegotspace.co.uk - No grade A office deals in Cardiff say's DTZ Research Property Times Cardiff Q3 2012•    Q3 office take-up for Cardiff Bay and city centre combined reached a typical level of 90,200 sq ft. There is still ongoing occupier uncertainty which is restricting the number of deals taking place. No grade A lettings were completed this quarter.
•    There is strong underlying demand from good covenants for grade A space going forward, brought about by upcoming lease events. However, none of these requirements are likely to transact imminently. Investor sentiment in the regional office markets continued to be subdued in Q3.
•    Annual take-up is forecast to be subdued, reaching a similar level to that of 2010. Last year’s take-up was exceptional due to the 209,000 sq ft pre-let to Admiral, however the underlying take-up discounting this deal was 309,000 sq ft which is similar to 2010 and the forecast for this year.
•    Total city centre availability fell marginally in Q3 due to grade B and C lettings activity and with no refurbishment completions or new developments. Although grade A availability in the city centre remains very restricted, the development pipeline remains sparse due to market conditions.
•    Prime headline rents remained unchanged at £22 per sq ft in Q3 and are forecast to remain at this level before increasing in 2014 due to employment growth and the imbalance between demand and supply.

Alex Easton, Associate Director at DTZ in Cardiff comments:

“Q3 take-up for Cardiff city centre  and out of town clawed its way to just over 100,000 sq ft, largely due to the sale of Ocean Park House, a  45,000 sq ft grade C building on the fringes of the Bay. In line with current trends, the majority of activity was again centred around the city centre (less than 10,000 sq ft was completed out of town) and at the lower end of the market with 80% of transactions totalling less that 5,000 sq ft.

“Despite good underlying demand for Grade A space, there were no completions of this nature in Q3. However, with a number of ‘live’ enquiries in the market place, current city centre supply at circa. 120,000 sq ft (including the Bay) is likely to reduce significantly over the next 3 to 6 months and although Cardiff’s prime headline rent of £22 per sq ft is unlikely to be surpassed, we are expecting the amount of incentives conceded by landlords to fall back considerably.”

Posted by The Editor (wantspacegotspace) on 23rd October 2012

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