South West & Wales | Reignited and Growing


Backed by a strong regional economy it appears that the South West and Wales is gearing up for an extended period of growth in all aspects of the commercial property market – the only real barrier to this is imbalance between supply and demand whereby occupiers’ appetite for product is not matched by current availability. Developers make your move.

FIRES BURNING BRIGHT


At the end of 2014 I suggested that a switch had been flicked and the market in the South West & Wales had been reignited. 2015 has been a case of slow burn on the kindling of the market; whilst the UK economy has grown and remains on a firm footing, there remains an element of global uncertainty elsewhere.

Uncertainty elsewhere can, however, be used to our advantage and in this respect the level of inward investment to the UK shows no sign of slowing down.

A good example of this is the recent Chinese investment in Hinkley Point C near Bridgwater. The power station will create 25,000 jobs and is indicative of the confidence foreign investors have in our region. No doubt they are attracted by the fact that Bristol and the South West has a strong local economy. Foreign investors may also be attracted to the South West by concerns that London is perhaps overheating and will provide less opportunity for growth.

Another factor that is helping to drive our region forward is the fact that in George  Ferguson we have one of 15 directly elected  mayors in England.  Whilst he may not have the level of power afforded to Boris Johnson in London he is becoming increasingly influential in supporting economic growth both within the city itself and the wider region. Mayor Ferguson has been a strong supporter of the South West Powerhouse and the delivery of this platform will undoubtedly help sustain an extended period of stability and inward investment.

Encouraging signs are also on the horizon for the market in the South Wales conurbation comprising the cities of Newport, Cardiff and Swansea. With a combined population exceeding 2 million, this region has the potential for real growth in the next few years.

As a capital city much of the attention is focused on Cardiff and indeed there are many initiatives being driven by the Welsh. Assembly to promote the region. Improving the link between the city centre and the new development in the bay is key to this and a prime example is the Cardiff Embankment development at Dumballs Road in the city’s enterprise zone. Wheels have been set in motion for this significant new initiative that will provide housing, shops, bars and restaurants and will create 500 long term jobs as well as 3,000 construction jobs.

As with the South West, South Wales also needs to develop a collaborative approach to the wider region. A South Wales Powerhouse comprising the main city authorities is necessary to ensure the prosperity experienced by Cardiff permeates the whole region.
 

2016 & BEYOND


A good transport infrastructure network will underpin a successful Regional economy. When it works well no one notices it – when it doesn’t everyone complains about it. For the South West and South Wales confirmation of the rail system being electrified from Cardiff to London will reduce times significantly between two capital cities and will undoubtedly improve the strength of the regional economy. It is difficult to see which sectors will grow in 2016; demand from occupiers remains strong across the board and the general lack of supply will inevitably drive rents and capital values on a region wide basis.

In conclusion 2015 will be remembered as Bristol’s year as European Green Capital. On a more personal level our South West office moved to Templeback in the commercial heart of Bristol. The strong environmental credentials of the property was a key factor in our decision to move here, with sustainable features including photovoltaic cells, energy efficient boilers, motion sensor lighting and plenty of cycling/shower facilities. 

The future’s bright, the future’s green.

Contact


Tim Davies

Head of South West & Wales
Direct: +44 117 917 2048
Mobile: +44 7714 707 676
tim.davies@colliers.com

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