Chris Yates of Cushman & Wakefield talks Welsh Commercial Property
Chris Yates is the senior surveyor for Cushman & Wakefield in Wales. We caught up with him to discuss small business prospects, the industrial sector, and the company’s laterst developments.
Overall, what has business been like this year for your company?
The year to date has been a good one for us locally. Take up of industrial accommodation in the first half of 2017 across South Wales has continued to remain strong, despite a quieter second quarter in comparison to the first in terms of number of enquiries. Stock replenishment probably remains the biggest challenge across the sector, as there continues to be a lack of speculative development of any notable size, largely due to the continuing disparity between build cost and rental return. This has resulted in a decline in total supply levels, especially for good quality stock, but overall there remains a strong level of market enquiries and we are witnessing some growth in rents and capital values.
What do you believe are the benefits of starting up or moving a business to Wales?
Mindful of the Brexit position at the macro scale, I think the benefits can feel a little unclear at this stage. However, there’s a great deal of assistance available to small businesses; Wales’ small business rate relief scheme has been extended through to March 2018, with a new, permanent scheme due to come into force beyond this. The Welsh Government are also offering different grant schemes, subject to sector, including 2 EU-backed property development funds aimed at bridging the viability gap between the cost of build and completed market value. These are specifically targeted at supporting and stimulating development in West Wales, the South Wales Valleys and North Wales. Furthermore, Wales continues to benefit from EU state aid, whereby qualifying companies starting up or moving into large swathes of the South Wales Valleys and West Wales can qualify for the maximum state aid assistance in ‘Tier 1’ areas. Finally, it was announced this week that a new Development Bank of Wales, aimed at providing growth finance and business support to attract and retail micro businesses and SMEs within Wales, is set to launch later this year after obtaining official Welsh Government approval.
What do you believe are the most prosperous markets and industries in Wales at the moment?
Speaking specifically for the industrial sector, I’d say it’s the third-party / ‘last mile’ logistics market which is continuing to demonstrate some of the most buoyant levels of activity, something that is then reflected nationally when you look at take up figures. Whilst take up in the manufacturing sector locally appears to have slowed a degree, the sector does remain active – only last week it was announced that Spanish train manufacturer CAF have committed to a new 500,000 sq ft facility at the former Llanwern Steelworks site in Newport with St Modwens, a deal supported by £3 million of Welsh Government grant monies and a move that will create 300 new jobs.
Is there an area of industry in the local area that you think would benefit from further investment?
Looking ahead, the opportunities for South Wales’ industrial and logistics sector include the potential removal of the Severn Bridge tolls (which constituted part of both the Conservative and Labour manifestos during the General Election), the progression of the M4 Relief Road around Newport, and the recent announcement that international carrier Qatar Airways is to open up a direct flight route between Cardiff and the Middle East. The next challenge, in time, will be to ensure adequate and appropriate infrastructure is in place for connecting the airport to Cardiff city centre and the M4 and also the provision of additional strategic land available for immediate development.
And finally, are there are any recent deals or developments that you or your company have been involved in, if you’d like to share them with our readers?
We’ll soon be looking to market a 38 acre prime development site in the heart of Cardiff Bay for Associated British Ports, which has outline planning consent and has been master planned for B2 / B8 uses totalling up to 540,000 sq ft. We’re also marketing a 150,000 sq ft freehold disposal on 9 acres. The site comprises the former Avana Bakeries Complex in Newport, where we have already sold 100,000 sq ft across 2 buildings. The sale of the main facility is now taking place by informal tender, following the closure’s announcement earlier in 2017.
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