Cardiff office market returns to pre-pandemic levels on new rental offers

Office occupancy in Cardiff has returned to pre-pandemic levels.

New figures from property consultancy Savills show deals totaling 121,000 square feet in the first quarter (Q1) of this year.

It represents the highest attendance in Q1 since 2019 and 214% above Q1 2021.

Category A take-up accounted for three-quarters (74%) of total take-up in the first quarter, representing a 150% increase in the number of Category A transactions completed compared to the first quarter of last year, which highlights a significant demand for high-quality offices.

Total supply increased during the quarter to 1.65 million square feet, representing a 16% increase over Q4 2021. However, with a limited development pipeline and a strong start to the year 2022 in terms of underwriting, Savills expects market supply to shrink in the remaining quarters of the year.

The TMT sector (telecommunications, media and technology) was the most active sector in the first quarter, accounting for 60% of overall take-up. This included the 65,000 square foot lease to BT in Capital Quarter, the largest lease so far this year. BT has taken up space in the 3 Capital Quarter office project vacated by insurance from Admiral Lending Group.

Office transactions in the TMT sector totaled 72,000 square feet during the quarter, exceeding the 2021 annual total by more than 200%.

Although there has been no change to base rent in Cardiff (£25 per square foot), Savills expects it will rise for the first time in six years to nearly £30, £00 per square foot by the end of the year.

Gary Carver, Head of the Office Agencies team at Savills Cardiff office, said: “It has been a great start to the year for the Cardiff office market. While hybrid working is likely to persist, there is a clear demand for high quality offices and sustainable offices, with companies wishing to improve the quality of space and the design of their workspace in order to attract more regular staff in the workplace.

Jose C. Birney