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News Release

Cardiff

Property investment in Wales falls to £0.1 billion in first quarter of 2016

Volumes drop but market for smaller deals still strong


CARDIFF, 8 June 2016 – Investment in real estate in Wales fell in the first three months of 2016 but a number of sectors are still seeing a lot of activity, according to the latest research from JLL.

Figures released by the international property consultancy show that £0.1 billion was transacted in Wales in the first quarter of 2016, which is down by 50 per cent on this time last year.

This however is set against a back drop of last year’s investment figures which were the highest ever achieved in Wales.

Justin MillettJustin Millett, director of capital markets at JLL in Cardiff, said: “While there has been less activity so far this year, investment levels are still good in Wales, particularly at the smaller end of the market.

“Last year was a stellar year for investment in Wales and is unlikely to be replicated in 2016 so this drop in activity was to be expected. Speculation ahead of the EU Referendum is also causing investors to put investment decisions on hold and accounts to some degree for the market cooling off, particularly at the top end which is mainly driven by the big retail funds.

“Despite the fall, a number of sectors are still seeing a lot of activity with some deals being done at good prices. There continues to be activity for smaller assets from a wide buying group.

“More transactions are also happening on a discreet, targeted basis rather than through wide formal marketing campaigns.

“There is also evidence to show that investment in the alternatives market is also performing well. There is continued appetite to invest in sectors beyond the traditional offices and industrial markets, such as student housing, healthcare, hotels and renewables. We predict that these alternative sectors will make up around 20% of all commercial deals in the UK and we expect Wales to follow this trend”

In Wales, the two largest deals in the first quarter of 2016 were the sale of 3 & 4 Callaghan Square and One Kingsway, which are Grade A office schemes in Cardiff city centre with an aggregate value of over £50 million. JLL advised on both of these transactions.

Justin continued: “The EU Referendum vote will have a significant impact on the outlook for investment in Wales and the UK going forward. Saying that, we know that investors are still seeing real estate as attractive relative to other assets and a recent JLL survey showed that 55% of respondents planned to increase their exposure to commercial real estate in 2016.”