Plans for a major mixed-use development in Cardiff Bay have taken a step forward with developers being invited to lodge expressions of interest.
Cardiff council, which is being advised by property advisory firms CBRE and Knight Frank, is assessing investor and developer appetite to transform a 30-acre site at Atlantic Wharf with 1.65 million sq ft of new development which could see 1,000 homes built alongside new hotel, office, retail, bar, restaurant and leisure projects.
The scheme, which will also benefit from plans for a light rail route from Cardiff Central Station running through it, has outline planning consent. The full development of the area could take around a decade to build out. The deadline for expressions of interest is May 26.
The proposed development would sit alongside a 17,000-capacity new indoor arena, for which the cost has risen by around £100m from the original £180m as a result of soaring construction inflation.
Back in 2020, following a competitive tendering exercise, US entertainment venue giant Live Nation – whose development partner for the project is Oak View Group – was named by Cardiff council as its preferred developer to deliver the project.
The council is confident that it can achieve financial closure with Live Nation, which would fund the short fall.
Live Nation is looking to reduce the capital cost – without compromising the arena’s spectator capacity – with an ongoing review of its design, remediation, infrastructure and energy requirements.
The building could be reduced in size by around 10% while still maintaining its original capacity for spectators. Cost savings identified could reduce the overall construction bill to around £250m.
The council remains committed to raising nearly £180m from the UK Treasury’s Public Works Loan Board to part fund the project – with around £10m of it ring fenced to finance the relocation of the existing Travelodge Hotel to make way for the new arena.
The council’s cost of financing the borrowing would be offset by a 45-year rental agreement with Live Nation for the arena.
Subject to financial closure, Live Nation will start on the project later this year with a scheduled completion a year later than originally planned in 2026.
A review of the local authority’s core property assets is currently being conducted with a report to cabinet expected to be lodged next month.
The scale of the wider Atlantic Wharf development is contingent on what the council decides to do with its existing County Hall headquarters building located there.
There are a number of options including maintaining the current building, a smaller new HQ either at the existing site or elsewhere in the city, as well as potentially an upgrading of its office space at City Hall.
However, the council has no intention of revisiting former plans for a new HQ at a current wasteland site owned by the Welsh Government at the southside of the Callaghan Square office scheme in the city centre.
It identified the site for a possible new 250,000 sq ft new HQ building and were in discussions over a land acquisition with the Welsh Government, before ending talks in 2020.
The Welsh Government acquired the land for around £7m from property development firm MEPC in 2013. Its rationale at the time was that they wanted to see development projects for the land coming to fruition.
However, a decade later and the site is not being formally marketed by the Welsh Government, which also owns a number of adjoining industrial units which could make way to be included in any future development plans.
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