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Secondary space supports the office market says Ben O'Connor of GVA

wantspacegotspace.co.uk - Secondary space supports the office market says Ben O'Connor of GVACardiff is one of a number of cities across the UK that has seen an increase in smaller secondary office take-up transactions while the larger Grade A deals are taking longer to mobilise, according to the latest market analysis from GVA, the UK's largest independent commercial property advisor.

The Big Nine reports that Cardiff has achieved above average take-up this quarter at 90,203 sq ft, compared to a quarterly average of 84,108 sq ft.  Positively, Cardiff is not alone – Leeds, Birmingham, Bristol and Newcastle also have reported above average take up.

However, no deals on Grade A space were recorded in this third quarter in the city, and generally the market remains subdued, with just 209,445 sq ft of lettings recorded so far this year, compared to 538,340 sq ft last year and 279,463 sq ft recorded in 2010.

The 45,000 sq ft letting to ACT Training at Ocean Park House has driven Cardiff’s take-up, and is in fact the largest city centre deal to have concluded this quarter amongst the nine cities featured in the Big Nine report.Other significant deals this quarter include CDM Media at Windsor Court, and Save Britain Money at Trafalgar House.

Regional head of office agency for GVA in Cardiff, Ben O’Connor, observes, “Occupiers are continuing to gravitate towards the well specified, well refurbished value for money space on offer. The majority of transactions remain driven by lease events, co-locations and consolidations, while the larger Grade A deals are taking longer to mobilise.”

UK wide, regional city centre take-up levels were 10% below the quarterly average while Grade A availability continues to diminish across the cities. In 2009 Grade A space made up 28% of availability and has gradually declined, currently standing at 14%.

It’s estimated that Cardiff currently has just around nine months’ supply of Grade A office space available, based on average take-up. However, this will be partly remedied by 90,000 sq ft of speculative space being developed at JR Smart’s Capital Quarter. There is approximately 1 million sq ft of available stock of which only 77,000 sq ft is Grade A in the city centre and Cardiff Bay.  

Ben O’Connor continues,  “The continued decrease in Grade A accommodation presents a dilemma moving forward. The economics of new development remains enormously challenging and will only come about with innovative financing arrangements. The heralded opportunity for high quality refurbishments to become a significant player in a 2-3 year cycle has now come and will pay dividends for those with the necessary skills to deliver.”

Posted by The Editor (wantspacegotspace) on 30th October 2012

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