Positive performance for Welsh commercial property suggests
investors are looking beyond London for
viable projects.

April saw a doubling of property deals throughout the UK and
this is likely to have a knock on effect for the Welsh market. Many
investors are being put off by high London prices, with the city
widely seen as a safe
haven for commercial property deals.

Investment is therefore likely to be diverted towards major
provincial cities, notably the Welsh capital, Cardiff. A recent
major city-centre investment by NFU Mutual saw them purchase
a retail space block for £45.5m, with a yield of 5.66 per cent.

While Wales traditionally attracts a very small percentage of
the total capital value of UK commercial property investment
transactions, there are clear and encouraging signs of growth.

The Welsh Government recently acquired an A grade office scheme
from developer JR Smart at its Capital Quarter development. The
agreement will see an 80,000 sq ft building in Cardiff which will
be available for tenants from March. The Welsh Government also
plans to begin to a build a 100,000 sq ft property by the end of
the year.

Total new builds in Cardiff will rise to 400,000 sq ft, the
biggest activity outside of London. Grade A stock, combined with
good transport infrastructure and access to a skilled workforce, is
vital for Cardiff to attract businesses into its commercial
centre.

Commercial property outside of London has faced a very difficult
period, previously making it difficult for areas like Cardiff to
attract new investment. Government intervention will give the
sector a boost as growth sets in, encouraging private investors to
the region and stimulating further recovery.

The Welsh Government recently announced a new £10m fund to help
property developers get their projects off the ground, in response
to smaller developers struggling to access finance from traditional
sources.

Business Minister, Edwina Hart, said:

"The Welsh Government is committed to supporting business growth
and we listen to business. This fund meets a real need to help
small-scale property developers access much-needed finance to fund
development in both the commercial and residential markets.

"It was set up in response to a funding gap identified by
Finance Wales and will help kick-start development in smaller-scale
property ventures.

"Construction is one of our key sectors with the potential to
make a significant impact on the economy. The industry plays a
vital role in delivering a vibrant economy and a quality
environment."

—