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UK Commercial – Spring 2021
S P OT L I G H T
Savills Research
Cardiff Offices
Occupational fintech Investment
Cardiff Offices - Spring 2021 Cardiff Offices - Spring 2021
39,881 sq ft
Cardiff Q1 take-up
13%
Proportion of take-up
Top sectors
Public Services, Education & Health (57%), Business &
£ £25.00
Prime rent per sq ft
Investment overview
Throughout the first quarter of
2021, Cardiff saw total commercial
investment of £30 million, the
majority of this was for offices
that was Grade A Consumer Services (17%), Extraction & Utilities (8%)
(96%), which totalled £29 million.
While the UK occupational and
Cardiff wider market take-up investment markets remain
Has the pandemic widened the The Covid-19 pandemic caused Cardiff's office take-up to be limited throughout the first quarter
affected by the significant
talent pool for office occupiers disruption caused by the Covid-19
in Cardiff? Q1 Q2 Q3 Q4 pandemic, Cardiff’s Q1 office
800,000 investment fell just 13% below the
The war for talent has typically same period last year and the
700,000
seen occupiers flock to major cities 10-year quarterly average.
with high population densities and 600,000
access to skilled and talented
The strength of Cardiff's fintech cluster
The majority of office
Take-up (sq ft)
workforces. While the Welsh capital 500,000
investment during the first
has always been an attractive spot quarter came from overseas
for occupiers, the office market is
much smaller than many of the
400,000
300,000
investors which accounted for
87% of investment, in value. There
continues to be recognised
other key UK regional cities.
was also activity from UK
However, the Covid-19 pandemic
200,000
property companies which Cardiff’s growing network of successful fintech companies
has caused many people to 100,000 accounted for the remaining 13%. makes the city a prime location for fintech occupiers globally.
re-evaluate both their home and
working arrangements and as a 0 Key office deals included the
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
result there has been significant sale of 3 Harbour Drive to Middle Cardiff is home to a number of moving out of serviced space into in-depth engagement with top
Source Savills Research
activity in the Welsh housing Eastern investors KAMCO exciting and promising start-ups their own private offices that can financial services and venture
market. House prices in Wales
grew by 7% in the year to March Take-up in Cardiff remains restricted by Investment Company for £25
million and the purchase of
and SMEs that are fuelling
innovation and growth within the
facilitate a higher headcount of
staff. This growth of fintechs in
capital executives.
2021, according to Nationwide; the
highest level of growth since June
2014. High house price growth in
the Covid-19 pandemic Suffolk House by Fiera Real Estate
for £3.6 million.
city. Between 2018 and 2019, the
number of business start-ups in
Wales is set to get greater as in
April the ‘FinTech Wales Foundry’
All this activity in Cardiff has
made it extremely attractive
Wales is likely to continue over the Following significant demand in Q4 2020 activity was limited Unlike most of the other UK
Cardiff increased by 8.3%, programme was launched. The to fintech companies globally.
next few months, due to the large significantly above the UK average Foundry, is a not-for-profit and This May, it was announced that
gap between demand and supply. throughout the first quarter of the year. regional cities, during 2020, there
of 2% for the same period. In non-equity accelerator programme Barcelona based blockchain
was no evidence of Cardiff yields
After Q4 2020 take-up was 18% 2A Oak Tree Court. There was in supply. This is because some shifting outwards as a result of Cardiff and the South East of that operates by pairing exciting technology provider Finboot
According to the RICS, surveyors’
above the 5-year quarterly average, also significant activity from the companies in the Financial Covid-19. Prime and secondary Wales, the fintech industry has fintech companies with some of plans to open an office in Cardiff,
have consistently reported a more
widespread rise in buyer enquiries Q1 2021 unsurprisingly saw a Business & Consumer Services and Professional Services yields therefore remain strong at created an incredibly successful Wales’ leading organisations. which will be its first outside
than new instructions to sell since significant reduction. Cardiff saw and Extraction & Utilities sectors have downsized, in response 5.5% and 7%, respectively. cluster contributing £2 billion Business accelerators offer start- of Barcelona. The Enterprise
last autumn and their expectations take-up of 39,881 sq ft, which accounted for 17% and 8% of to increased home-working Gross Added Value (GVA) to the ups support services and funding Software as a Service (SaaS)
for price growth over the next significantly below the same take-up, respectively. throughout the pandemic. Cardiff Capital Region economy. opportunities aimed at enabling company identified Cardiff as
three months are at the highest period last year and the Q1 growth. The growth of start- a base for its new office after
level since 1999. five-year average. The majority of The majority of demand in Following the pre-let of the In February, Cardiff, along with ups is a key contributor to office securing a £2.4 million equity
take-up has been for secondary the market is currently from entire 120,000 sq ft Interchange South Wales, was recognised as demand in Cardiff and therefore investment from investors
Savills predicts that high price
growth and transaction numbers space with just 13% being Grade A. requirements that are under 5,000 building on Central Square to one of 10 areas in the UK that are the FinTech Wales Foundry is a including the Development Bank
are likely to continue into the sq ft, with a strong presence of Legal and General during Q4 2020, producing high-growth fintechs welcome addition to the market. of Wales and energy company
summer before cooling slightly in The Public Services, Education SMEs in Media and Technology. there is only one development with huge potential. Some of the Repsol.
the second half of the year. & Health sector accounted for the This was evident throughout on-site in Cardiff with available most prominent fintech businesses Cardiff’s fintechs continue to
majority of take-up (57%) totalling Q1 as over 80% of deals were space. John Street, Callaghan that have already moved and go from strength to strength and The Cardiff Capital Region has
The Covid-19 pandemic has likely 22,771 sq ft. The largest deal in this below 5,000 sq ft. The Financial Square totals 109,000 sq ft and grown in Wales include Vizolution, in May, Sonovate, a provider of made fintech a priority sector
been one of the main drivers sector was from the Department Technology (fintech) sector is expected to complete in the Backbase, Wealthify, Starling on-demand business finance and and it shows, the developing
behind this huge influx of buyers, 96%
for Work and Pensions, which let continues to be particularly active spring/summer of 2022. Bank, and confused.com. Some of technology solutions, funded a ecosystem within the city will be a
overwhelming the supply of Proportion of commercial investment
available and affordable property. 13,168 sq ft of Grade B space at Ty in Cardiff and Savills is aware of these companies aim to provide record £55 million – cementing the Significant source of employment
for office space
Many current home owners are Bevan, Llanishen – this was also at least four office requirements Currently, the prime rent in more accessible financial services Cardiff and London-based SME as and economic growth over future
re-evaluating what is important to the largest office letting in Cardiff currently in market from fintech Cardiff remains at £25 per sq ft. and lower costs, while others one of the UK’s most established years to come. Oxford Economics
their current living arrangements, during Q1. The Department companies which are moving out While we have seen no evidence may service investors and other and scalable fintechs. Earlier this latest forecasts are predicting
such as a garden, more space, a For Work and Pensions was of serviced space into their own of prime rents in Cardiff reducing businesses. year, Cardiff based Delio was that the Professional, Scientific
thriving community or a view, and significantly active throughout the private offices. below this rate we have seen selected to participate in the 2021 and Technology sector will see
acting accordingly.
UK regions during Q1 signing for occupiers negotiating for larger The fintech industry is therefore FinTech Innovation Lab New York. impressive GVA growth of 22%
More people moving into Wales a combined 371,613 sq ft across 20 Since the end of 2020, supply in incentives due to the current a significant source of office A 12-week program founded by over the next five years with the
will not only benefit the local deals, 16 in Greater London & the Cardiff has increased by 9% and economic uncertainty in the demand in Cardiff and at present Accenture and the Partnership sector also seeing 6% employment
economy, but will widen the talent South East, as well as individual currently totals around 1.3 million market as a result of the Covid-19 Savills is aware of at least four Fund for New York City, that helps growth over this period, equating
pool for office occupiers within the deals in Birmingham, Bristol and sq ft. Grade A supply in the city pandemic. However, Savills office requirements currently in early- and growth-stage enterprise to over 1,100 new jobs within
Welsh capital, providing significant Leeds . centre accounts for approximately expects Cardiff will begin to see market from fintech companies tech companies accelerate product Cardiff.
opportunities for growth in 26% of availability at 347,000 sq ft. rental growth throughout 2022 87% which are expanding and therefore and business development through
Cardiff's office market. Proportion of office investment from
Other key deals for this sector with Grade A rents reaching £27 by
included Shaw Health Care, which This year, we have seen around the end of 2023. overseas investors
leased 5,780 sq ft at 2 Links Court 130,000 sq ft of Grade A 'grey Savills is aware of at least four office requirements currently in
and Advance Medical Simulation, space' come to the market, which the market from fintech companies which are expanding
which signed for 2,202 sq ft at has contributed to the increase
2
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Research
Pearl Gillum
Associate
Commercial Research
0207 535 2984
pearl.gillum@savills.com
Cardiff office
Gary Carver Ross Griffin Sam Middlemiss
Director Director Surveyor
Office Agency UK Investment Office Agency
029 2036 8963 029 2036 8961 029 2036 8962
gcarver@savills.com rgriffin@savills.com smiddlemiss@savills.com
Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK,
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