After the strongest year of take-up for 15 years during 2016, the Cardiff office market has continued its strong run into 2017 as one of the UK’s strongest outperformers post Brexit.
The UK economy has started 2017 fairly modestly, with 0.3% growth recorded for the first quarter. Weak Sterling has added upward pressure on inflation which is squeezing output in consumer-facing subsectors.
Cardiff's economy, however, has seen 4.7% economic growth over the past five years and is expected to see growth rise to 10.1% over the next five years, above the UK average of 9.5%.
Strong economic growth is expected to filter into the employment market. Cardiff is forecast to see 3.8% office based employment growth over the next five years, according to figures from Oxford Economics. Much of this growth is expected to be delivered by the Professional, Science and Tech sector, which is expected to see growth of 7% during this period.
Electrification of the South West Mainline is set to complete in 2018 which will reduce journey time from the Cardiff to London by 15 minutes. We expect this to draw occupiers to the Welsh capital, with more digital startups taking advantage of established incubator and accelerator space in the city centre.
Occupational take-up in Cardiff reached 146,739 sq ft during the first quarter of 2017, 19% above the five year quarterly average of 123,000 sq ft. Cardiff's office market has remained strong and stable over the past 12 months as indicated by above average levels of take-up in Graph 1.