A Welsh Government’s grade A office scheme in the centre of Cardiff has already secured a string of new tenants before it is formally signed off for occupancy.

The 79,500 sq ft building, located at the Capital Quarter development, was acquired last year by the Welsh Government from developer JR Smart in a £14m deal.

As part of the transaction on No 1 Capital Quarter, JR Smart is committed to building No 2 Capital Quarter at its development scheme. Work on the 90,000 sq ft building will start in May with a construction period of around 18 months.

The Cardiff office of property advisers Knight Frank are acting as agents for No 1 Capital Quarter – located in the capital’s enterprise zone for financial and professional services – for the Welsh Government.



The building, which could accommodate up to 1,000 staff, has generated strong interest in the marketplace, with 70% of the space already under offer.

It is understood that the building has signed up Finance Wales as a tenant. The investment bank subsidiary of the Welsh Government is expected to relocate to its new headquarters at the end of the year to coincide with the expiring of its current lease at Oakleigh House in Cardiff. It has taken the building’s top three floors.

A spokesman for Finance Wales said: “Finance Wales’ Cardiff headquarters will relocate to a new office in Cardiff when the lease on its current office in Park Place expires in December. Full details will be announced shortly.”

The other two tenants are in the private sector, with one understood to be a ICT inward investment project. The leases range from five to 10 years.

Video: View from No 1 Capital Quarter




When fully let the building will generate an annual rental income of £1.5m. The building is being marketed at £19 per square foot.

Associate partner with Knight Frank, Mark Sutton, who declined to comment on the identity of the tenants, said the building’s high standard of design, coupled with its close proximity to the city centre and being located in an enterprise zone, has made it an attractive proposition to both indigenous firms looking to relocate and potential inward investors.

He said: “To have 70% of the building pretty much spoken for when the building is just being finished is incredible really and says a lot about its quality. Now that the economy is picking up, businesses are thinking about expanding with a new sense of confidence to push the button on investment projects.

"JR Smart had the confidence to build during the downturn.

“Their entrepreneurial spirit is now reaping dividends as the building, now owned by the Welsh Government, is currently the only ‘show in town’ in terms of completed new grade A office space in the centre of Cardiff.”

A new £2.3m bridge from Capital Quarter to the centre of the city – taking pedestrians over the Great Western Mainline – is expected to be installed either over the last weekend in May or the first in June.

The impressively designed bridge is being financed by the Cardiff council, the Welsh Government and JR Smart. A walkway through the Capital Quarter scheme to the bridge will also be created. JR Smart is shortly expected to announce a major deal with a leading student accommodation provider for several hundred units at the Capital Quarter scheme.

It also close to striking a deal with a hotel operator.

The Welsh Government is also expected to shortly confirm a contractor to build a new 90,000 sq ft building near Capital Quarter at a parcel of yet to be developed land at Callaghan Square.

One option could be for the Welsh Government to enter into a joint venture agreement with a property development company to develop the scheme.

The near five acre site has full consent for up to 500,000 sq ft of office development. At this stage the Welsh Government has not taken a view as to when it might sell its investment in No 1 Capital Quarter.

http://www.walesonline.co.uk/business/strong-interest-welsh-governments-speculative-6873146

That all sounds very encouraging! and fair play to JR Smart, with No2 building iminent, and not far off with the student accomodation deal plus an hotel maybe no too far away, then capital quarter will be filling up very nicely!

yeah but finance wales taking three floors is hardl inward investment, their funded from my hard earnt taxes, and they get a new office space

So, the Welsh government acquired the building for £14m, and they're reaping that back by letting it at the high-end rate of £19 per sq ft to, ....wait for it....Finance Wales, which is a subsidiary of The Welsh Government.

I wonder how much per sq ft. Oakleigh House was costing them in comparison(!)

I agree with you. It doesn't seem right, but then it might help kick start the rest of the scheme...and besides, they are already taking up space somewhere which is costing us taxpayers money whichever way we look at it. You'd hope their lease would be quite low seeing as their landlord is essentially themselves (seeing as the Assembly own this building), plus you'd hope the building is more efficient energy wise !

You're right of course, leasing it to themselves makes more sense than having it remain vacant and paying someone else. Just that we're pretty sure that their previous landlords would not be charging such a premium rate, so to crow about it now being 70% occupied, when one of the major tenants is yourself (at presumably a massive increase in cost!) is quite a bit of spin.

of course that is why they are doing it and it makes commercial sense to do so. it also means that the Welsh government have an indirect guaranteed return (via rents) from the investments Finance Wales make other than any franked investment income.


more importantly, we may see the start of callaghan square as well as the hotel/student accommodation as well as JR Smarts next phase on Capital Quarter. Its all good news. Hopefully the Welsh Government will allow this to be run at arms length and if so they will deserve some praise for getting things moving.

In fact, you'd hope that they are paying the going rate on rent - ultimately it doesn't cost the public sector as a whole anymore (it just transfers it from Finance Wales to WG general coffers - but it does ensure that the incentives are right. If the Welsh Govt were a 'subsidised rent' to public sector bodies, that would make more of them want to locate here, crowing out the private sector and inward investors this building should really be aimed at.

I can think of two reasons why Finance Wales might have moved
- one is to pay lower business rates (they are actually 'non domestic rates' so would apply to government too)
- and the other could be that a location within the enterprise zone will help them sell it to other potential investors (who they can then provide finance to).
- It may also be the case that running costs are lower in the new building and/or the working environment is substantially better - both of which matter in the public sector as well as the private sector (productivity really does suffer in poor quality offices with bad layouts, poor infrastructure, poor heating/aircon etc).

However, it does mean the "good news" isn't quite as good as it sounds. 3 floors is about 40% of the total space, so of the remaining 60% only half (30%) is under offer. News on hotel and student accomodation is promising, provided that the student accom is done sensibly and sensitively and doesn't detract from the office environment. Perhaps some educational facility could also be worthwhile - co-location of educational institutions and tech firms is increasingly common (e.g. Olympic Park, Google/St Martins at Kings Cross, Cambridge etc).

But by making them pay rent to WG it means they don’t pay rent to the private sector. If that’s such a good idea then let'S get rid of the private sector and all get rich

If the building is aimed at private sector entrants ( which it supposedly is) then why not let JR Smart just rent it out direct, or sell it another company who will do so. What does WG bring to the party .....other than a large taxpayers chequebook (which Smart saw a mile off) and a load of self- serving politicians

And the idea that wherever Finance Wales moves will help them sell to “other” potential investors would seem to suggest that their previous building must have become an epicentre of commercial activity . And that development is difficult or impossible unless it happens to be on a site physically located within a few hundred yards of an office offering a source of finance .

This is about as wealth creating as me paying me to go to work.

I was wondering that also.

In addition, I thought that there were growing calls for Finance Wales to be wound down?

Any non random comments from Random Comment?

all sounds a little bit stupid, you must question whats going on, am sure some of the private sector property owners will be watching this deal with interest.

I have heard that the remaining floor space is going o be taken up by a public sector company. It's going to be Natural Resources Wales

That's good news and bad at the same time

Agreed.

Yes it will be full, which is good news for the government who are owners and it might mean a quick offload to a property investment company, it means the scheme starts to fill up, it's nice to see some movement in the property sector etc. but the tenants we are hearing that are moving into Number 1 doesn't fit with the enterprise zone purpose.

I guess there's still lots of planned space at Callaghan Square, Capital Square as well as Number 2 about to go up. That's 3 new buildings going up in the next 18 months - probably what we have currently at Callaghan Square in total already ? That's without all the future planned plots north and south of Central station and Callaghan Square.

More occupiers in the city means a better city centre economy I guess, regardless of what sector they are. That's the positive side.

Still, I can't help but find myself frustrated. I guess I still have eternal hope that we'll see lots of new jobs appearing.

I'm curious about the rumored IT company taking space as well, that's more positive.

Yes an I t COMPANY funded by the Welsh Government probably!

Hopefully one devoted to grammar and RANDOM us e of LETTers. It might be of help.

Alert Logic to create EU HQ in Cardiff - http://www.walesonline.co.uk/business/business-news/fast-expanding-cloud-computing-security-solutions-7038497

Beat me to it !

I've posted on the thread for the whole Capital Quarter scheme