In the first half of the year, Cardiff witnessed a substantial rise in office space demand. Knight Frank’s research revealed this surge, reflected in an uptake of 188,112 square feet.
This increase, surpassing previous years, indicates a strengthening market, bolstered by notable deals like the Welsh Government’s property acquisition.
Extensive research by Knight Frank has highlighted a marked increase in the demand for office space in Cardiff during the year’s first half. The period from January to June saw a total uptake of 188,112 square feet, which signifies a 27% rise compared to the corresponding months in 2023 and exceeds the 10-year average by 4%. This upswing reflects a growing confidence among businesses to either expand or establish themselves in the city.
Apart from the strong public sector presence, Cardiff benefits from a diverse range of occupant sectors, seeing uptake from 13 different occupier sectors. This diversity enhances the city’s attractiveness to new occupants, providing a buffer against potential economic fluctuations.
The total market vacancy experienced a slight rise from 12.3% to 12.5%. Although there has been a year-on-year increase in supply, development projects are scarce, with John Street being the only underway project set to add 113,360 square feet of speculative space by 2025.
Mr. Phillips commented on the commercial property market’s trajectory, drawing attention to two contrasting scenarios bifurcating the market landscape. Older buildings are losing tenants due to a lack of significant capital improvements, forcing landlords to decide on either investing in upgrades or repurposing the properties. Conversely, newly constructed or recently refurbished buildings in prime locations are experiencing robust leasing activity.
Business caution continues to underpin decision-making in the commercial property arena. Despite this, the dynamic nature of the industry dictates that indecision is not viable. Companies are actively seeking spaces that support both operational efficiencies and broader ESG objectives, contributing to competitive market dynamics.
The city’s ability to attract a diverse array of occupiers serves as a solid foundation for sustained growth. As Cardiff solidifies its position as a business hub, strategic decisions by both government and private sectors will be pivotal in shaping the market’s future trajectory.
Cardiff’s office space sector stands at a crossroads of growth and opportunity. The interplay of demand, investment, and sustainable development will shape its future.
As the city continues to expand, its strategic positioning and diverse occupier base offer a promising outlook for long-term prosperity.