The Rise of Welsh Property Investment

In 2014, investment in Welsh property soared to record levels thanks to a series of major transactions including the opening of Pinewood Studios Wales and the sale of Tŷ Hywel.

According to real estate firm, Jones Lang LaSalle (JLL), direct real estate investment in the country had increased by 97% in comparison to the previous year, hitting a whopping total of £700m.

Why has it Happened?

According to Justin Millett, the director of capital markets at JLL’s Cardiff office, the investment market in Wales is considered good value, with a yield return on investments higher than in other regions outside London.

Millett claims that there are many reasons why the UK and Wales have performed so well over the last 12 months. The UK as a whole is seen as the global centre for cross-border investment and has been fuelled by increased investor confidence in the accelerating economy as well as fierce competition for assets and strong pricing in London.

Getting Down to Business

The sale to M&G of £156m Parc Trostre, a retail park in Llanelli, was the largest investment of the year.

In contrast, the biggest office transaction, worth £40.5m, was the sale of Tŷ Hywel to a Kuwait family trust. The opening of Pinewood Studios Wales at Wentloog was the headline transaction in the industrial market.

The growth of alternative sectors such as student housing and leisure has been a significant trend. An example of this would be the £12m sale of a hotel and three leisure units at Imperial Gate in Cardiff to L&G.

The Future for Welsh Property Investment

Chris Sutton, lead director in JLL’s Cardiff office, has said that South Wales has a positive future and there is continued investor confidence in the region due to the record activity in the capital markets in 2014.

On the other hand, there is a lack of available grade A floor space in both office and industrial markets. This is emerging as a key issue for Wales and it’s an opportunity to be considered not only by developers, but the Welsh Government as well.

Sutton also went on to say that the planned expansion by Deloitte and the BBC in 2015 demonstrated increased confidence in the Welsh market and should lead to new development.

Across the UK, investment totalled £65bn in 2014, 16% more than 2013, making it a safe investment location. Sutton said Cwmbran, Treforest, Llantrisant, and Bridgend are areas that appeal to investors as they are top tier grant locations. Overall, the whole property market has had a very strong year in terms of investment.

Are you investing in a property in Wales? Why not talk to our team of development finance experts for a little more guidance? Call 02920 766 565 to speak to a member of our team of qualified finance brokers.