PLOT 12
CARDIFF GATE INTERNATIONAL BUSINESS PARK CARDIFF
September/2015
CONTENTS
1.0 INTRODUCTION ...... 1
2.0 BACKGROUND ...... 2
3.0 MARKETING INITIATIVES ...... 3
4.0 RESPONSE TO THE MARKETING INITIATIVES ...... 7
5.0 COMPETING SITES AND CURRENT OFFICE MARKET OVERVIEW ...... 8
6.0 CONCLUSION ...... 10
APPENDIX 1
CARDIFF GATE INTERNATIONAL BUSINESS PARK E BROCHURE CARDIFF GATE INTERNATIONAL BUSINESS PARK GENERAL BROCHURES DESIGN & BUILD OPPORTUNITIES BROCHURE CARDIFF GATE SUPERFAST BROADBAND
APPENDIX 2
PR AND PRESS COVERAGE
September/2015
1.0 Introduction
This report has been compiled by Fletcher Morgan to support the planning application made by Cardiff Gate International Business Park (CGIBP) in respect of that part of the business park identified as Plot 12. For ease of reference a simple plan of CGIBP is attached in Appendix 1 to this report.
The site has been available for occupation for employment use since the business park was incorporated in 1994. The site has attracted no successful occupier interest in more than 23 years and remains vacant.
In particular this report covers the following matters:
The marketing initiatives which have been undertaken to promote the site
The response to these marketing exercises
An overview of the current office market
A listing of competing alternative sites
A conclusion
1 September 2015
2.0 Background
CGIBP was incorporated in 1992 and the subject site, Plot 12 on the plan, has been available for occupation since 1994 following the completion of the necessary internal road infrastructure.
The site has had planning permission for employment use since 1992.
Plot 12 comprises a partly serviced site of approximately 8 acres located to the south of the business park on a steeply sloping site with little visibility to the main internal road and no visibility from the M4 motorway.
The site has been actively marketed for development for a continuous period of over 20 years. It remains vacant.
2 September 2015
3.0 Marketing Initiatives
Fletcher Morgan have been CGIBP’s retained agent for sales and letting opportunities since the Park’s inception in 1992. CGIBP have also appointed a series of PR consultants over that period to assist with maintaining and improving the profile of the park.
We set out below a brief summary of the various initiatives which have been undertaken to promote the development of the park.
3.1 Design Agency and Marketing
Over the period of its ownership CGIBP have availed themselves of the expertise of a number of marketing agencies including:
Golley Slater Peterson Partnership Freshwater Merlin Media
Working in conjunction with these agencies and Fletcher Morgan, CGIBP have produced numerous sets of brochure and marketing literature. This high quality promotional material has been regularly updated via the various agencies throughout the marketing period.
For the purpose of illustration we attach in Appendix 2 a selection of current and historic marketing brochures and literature which include:-
1. A copy of the original marketing brochure.
2. A copy of the second generation brochures.
3. An overview of Cardiff Gate International Business Park and the opportunities available (current).
4. A site brochure providing detailed information of the specific sites available in particular plot 12 (current).
5. Cardiff Gate Online magazine which is produced between 2-4 times per annum to promote the availability of space at Cardiff Gate.
3 September 2015
These brochures have been targeted at office and other high employment occupiers and designed to highlight the flexibility offered to potential occupiers both in terms of building capacity and tenure.
3.2 Direct Mailing/Emailing
Direct mailing, including mailing of marketing brochures to interested parties and enquiries generated from the various marketing initiatives has been undertaken throughout the 20 plus year marketing campaign on a regular basis. This has been targeted at all the known occupier and influencer data bases such as:
Cardiff and Regional Office Agents
Cardiff Investment Agents and other influential regional surveyors
Regional and London Agents dealing regularly in the South Wales area
Major existing South Wales regional occupiers based
Major existing target Cardiff occupiers – lists are held by Fletcher Morgan
3.3 Bespoke Website and Twitter
CGIBP has a dedicated interactive website for some 10 years. The website cvan be found at :
http://www.cardiffgate.com/.
Besides serving as host to electronic reproductions of the CGIBP marketing material detailed above, this site also serves as a portal for the distribution of valuable information (eg. bus timetables, cycling routes) for use of the tenants and potential occupiers.
CGIBP also has a Twitter account for more immediate dispersal of information such as M4 motorway accidents and events of local interest.
3.4 Property Websites and Databases
Details of the site have been made available on the EG Property Link platform for the last 10 years and on both the Welsh Government and Cardiff Council Property Registers since the park was first opened.
4 September 2015
3.5 Signage
On site signage has been present throughout the marketing period. These include details of the sizes of each available plots, including Plot 12 together with an indication of the potential building capacity. CG has also invested heavily in structural signage at the entrance to the business park
3.6 PR and Press Coverage
CGIBP have always retained the services of a PR agency to ensure continuous press coverage in relation to current and planned developments on the park.
Regular press releases have been issued throughout the marketing of the development which has created a strong local awareness of the availability of the site in the local and regional office and employment markets.
A small selection of current and prior releases are set out in Appendix 2.
3.7 Advertising
Advertising has been undertaken on a regular basis during the marketing campaign and includes the following:
Estates Gazette (South Wales and Cardiff feature) Property Week (South Wales and Cardiff feature) Insider Magazine Western Mail
3.8 Presentations, Open Days and Occupier opening events
We have held numerous presentations and opening days targeting end occupiers and property agents. Senior members of the Welsh Government have attended some of the opening of high profile occupiers.
3.9 Marketing Meetings
CGIBP hold monthly meetings at which they, Fletcher Morgan and the PR advisers are present.
Fletcher Morgan regularly consult with the Welsh Government and Cardiff Council Economic Department on behalf of CGIBP and representatives from both institutions have periodically attended marketing meetings.
At each meeting Fletcher Morgan have produced progress reports detailing all enquiries active in the market and targeted since the previous meeting. The latest of such reports is set out in Appendix 3
5 September 2015
The marketing meetings have been used to review the overall marketing strategy, its implementation and the progress of discussions with interested parties, including terms to be offered to specific enquiries.
In addition, regular market updates detailing the performance of the wider Cardiff office market have been provided.
The meetings provide an important opportunity to share intelligence and fully utilise the resources of the marketing efforts being undertaken to secure enquiries.
The marketing meetings also provide the opportunity to ensure that all potential marketing initiatives and ideas are pursued, as well as providing an opportunity to review quoting terms to ensure that these remain relevant based on market activity.
6 September 2015
4.0 Response to the Marketing Initiatives
The following are examples of large office enquiries that were offered Plot 12, Cardiff Gate International Business Park but rejected:
1. First Plus – 100,000 sq. ft.
Rejected plot 12 but initially agreed terms on a more prominent site at Cardiff Gate however subsequently shelved the requirement because of the recession.
2. L & G - 60,000 sq. ft. located to Knox Court, Cardiff.
3. L & G- 70,000 sq. ft. located to Brunel House.
4. Admiral Insurance – 230,000 sq. ft. located to Admiral House.
5. BBC HQ – 200,000 sq. ft. located to Central Square.
6. BBC Studios – 300,000 sq. ft. located to Porth Teigr.
7. Deloittes – Total 60,000 sq. ft. located to Fusion Pont and 6 Park Street.
8. Finance Wales, Balfour Beatty etc. – 70,000 sq. ft. located to No. 1 Capital Quarter.
9. First Source, Cardiff Bay 30,000 sq. ft.
The following parties were offered Plot 12, Cardiff Gate International Business Park and turned down plot 12 in favour of more prominent sites on the business park.
10. International Baccalaureate Organisation – 60,000 sq. ft.
11. Julian Hodge/118 – 60,000 sq. ft.
12. Scottish Southern Electric – 60,000 sq. ft.
13. Scottish Life/Lloyds Bank – 60,000 sq. ft.
7 September 2015
5.0 Competing Sites and Current Office Market Overview
5.1 Since 2009 office take up stats in Cardiff has tended to be below 400,000 sq. ft. per annum. Although there are signs of an improvement in the office market and office take up in 2015 may well exceed 400,000 sq. ft. It is significant that the majority of enquiries will only consider offices in the city centre within the Enterprise Zone.
We list below current office enquiries considering Cardiff, it is again significant that these requirements will not consider plot 12, Cardiff Gate International Business Park.
Client of JLL – city centre requirements of 45,000 sq. ft.
Client of JLL – city centre requirement of 50,000 sq. ft.
MotoNovo Finance – Client of Cooke & Arkwright 45,000-50,000 sq. ft. city centre.
GVA 50,000 sq. ft. requirement for 2017.
DTZ for Hodge Bank have circa 20,000 sq. ft. requirement considering Central Square.
DTZ are looking for circa 20,000 sq. ft. for Slater & Gordon formerly Leo Abse considering Central Square.
GVA have a large 150,000 sq. ft. requirement which will have to be a Design and Build – city centre.
L & G currently reconsidering their Cardiff office requirement circa 50,000 sq. ft. city centre.
Hugh James – 90,000 sq. ft. for 2017 city centre only.
5.2 There is currently a substantial land-bank in Cardiff of available sites and buildings. The competing sites are prominent sites offering superior amenities including public transport to plot 12 and many of them benefit from additional incentives available in the Central B, D, E, Z.
8 September 2015
We set out below a selection of competing sites:-
Vacant stock of circa 1m sq ft in Cardiff of office floor space.
1m sq ft in Porth Teigr (south of Roath Dock alone which we are marketing)
JR Smart at Capital Quarter, with circa 200,000 sq. ft. and permission in total for 700,000 sq ft (65,032 m2). Rightacres at Central Square, with circa 800,000 sq ft of floorspace (74,322 m2). Callaghan Square South – potential for 500,000 sq. ft.
Callaghan Square East – potential for circa 200,000 sq. ft.
Rapports Car Park, Bridge Street – potential for 200,000 sq. ft. plus.
Dumballs Road, Curran Embankment (Havannah Quay) (potential for 484,200 sq. ft.).
Fusion Point III potential for 85,000 sq. ft.
St. Mellons Business Park expansion potential for 1 million sq. ft. adjacent to a new “Parkway” railway station.
9 September 2015
6.0 Conclusion
The argument of Cardiff City Council is that Plot 12, extending to some 9 acres, should be retained indefinitely to cater for a yet unidentified major inward investment opportunity.
We have shown that the plot has been fully exposed to the market for over 20 years. We have shown it has failed to attract an occupier during this extended marketing period despite the comprehensive and extensive campaign detailed in this report. Indeed the whole of CG has failed to attract an occupier willing to commit to more than 50,000 sq ft of offices – even on far superior sites with higher visibility and less costly development constraints.
We conclude that this lack of occupier interest in Plot 12 can be put down to the following:
Plot 12’s Position
Perceived occupier concerns regarding potential for local congestion in the road network around the site particularly the M4 junction link. Because of traffic contra-flowing at peak times, a residential consent would alleviate these concerns for future occupiers of the park.
The lack of main road visibility in comparison with a number of the key competing sites. The site is largely hidden behind existing buildings and is at a significantly lower level than other sites in the park. Consequently it’s profile would be very unattractive to any major inward occupier -- as has been shown by the reaction of all enquiries to date
The site levels also mean that the site cannot be developed without extensive cutting of material, which we cannot accommodate on the plot or the wider business park, so it would have to be moved off site at very considerable cost. This makes the site financially unattractive to any potential occupier.
Perceived occupier concerns regarding distance to staff amenities in comparison with the city centre sites.
CGIBP have two other sites which could accommodate major inward investment of between 70- 100,000 sq ft (plot 10 and Plot 8,8a and 8b on the plan – see appendix 4). These sites benefit from a much higher profile within the site and also have the benefit of being fully serviced and available for immediate development..
10 September 2015
Market Trend, Supply and Demand
Although Cardiff Gate International Business Park is located in a Tier 2 assisted area and assistance is available to occupiers on a discretionary basis, this is not as attractive as the assistance available within the Enterprise Zone. The Enterprise Zone offers financial assistance with business rates for SME and there are no empty rates payable on new buildings for the first 18 months following completion, if completed on or after 1st October 2013 and before 1st October 2016.
In recent years the demand for out of town offices in Cardiff and the UK in general has substantially declined. The majority of current office occupiers now require City Centre locations with good public transport hubs, as is offered by the Central Business District ie Callaghan Square and Capital Quarter etc.This trend has seen a large expansion by new office occupiers in the City Centre and Cardiff Bay areas. Plot 12 is therefore competing against a market trend of occupier requirements.
There is a large supply of land and office premises in central Cardiff in the Bay, City Centre Enterprise Zone, the wider City Centre and elsewhere. This means that Plot 12 has to compete with more advantageously placed sites with better local and surrounding infrastructure and easier site contours to facilitate less costly development
Plot 12 has been offered to all occupiers considering Cardiff as a location over the last 20 years and has been turned down by all including those parties who have located to more prominent sites at CG including International Baccaleureate, the Julian Hodge Bank, Scottish & Southern Electricity. The last major enquiry to seriously consider Cardiff Gate International Business Park as a location was First Plus (Barclays Bank) in 2008. They were offered plot 12 but rejected it outright. With some persuasion they considered an alternative scheme on Plot 8 before it was abandoned”.
11 September 2015
Implications of refusal of application
Plot 12 will not be developed speculatively as the market has profoundly changed since 2008 and speculative development other than in city centre locations is simply not a fundable proposition.
Without a change of use we do not see any prospect that the plot will deliver offices in the next 10-15 years for the reasons detailed above
With a change of use for residential development, the site could be successfully promoted to house economically active residents and workers which would benefit both the existing and future occupants of the business park by supplying a further source of local labour.
12 September 2015
APPENDIX 1
Cardiff Gate International Business Park e Brochure Cardiff Gate International Business Park General Brochures Design & Build Opportunities Brochure Cardiff Gate Superfast Broadband
September 2015
APPENDIX 2
PR AND PRESS COVERAGE
September 2015