Work has started on a 700-plus new apartment scheme overlooking the River Taff in the centre of Cardiff.
The £250m development from financial services giant L&G - at the Central Quay mixed use scheme at the site of the former Brains Brewery - will deliver 715 build to rent (BTR) apartments.
L&G’s development partner for the scheme is Bangor-based Watkin Jones. Last year L&G acquired land at Central Quay for the project from Cardiff-based developer Rightacres in a deal understood to be worth around £20m.
The biggest ever BTR development in Wales will consist of two separate high-rise storey elements with their own concierge, lobby, gym, gardens and terraces. It will also feature a public square facing onto the River Taff, in addition to over 19,500 sq ft of leisure and retail space. The first section of the BTR project is scheduled for completion in May 2026 and the second in March, 2027.
Apartments will range from studios to three-bedrooms
The scheme takes L&G’s investment activity into the city to £1bn, with other projects including the funding of the nearby Central Quay office scheme developed by Rightacres and the Parkgate Hotel on Westgate Street which is majority owned by the Welsh Rugby Union.
At Central Square it is also (through L&G Homes) close to completing its first BTR scheme in the city with more than 300 apartments at the Interchange. The development will also provide a new 120,000 sq ft headquarters for L&G’s financial services operations in Cardiff - currently located at the Knox Court and Brunel House office buildings - and a new bus station operated by Transport for Wales.
Alex Pease, chief investment officer with Watkin Jones, said: “We are proud to have broken ground at Cardiff Quay, home to the former Brains Brewery.
“This regeneration of a strategic site in the heart of Cardiff will deliver high quality sustainably constructed BTR homes, which also helps meet the ever-increasing housing demand in the area. Building upon recent transactions we are looking forward to developing this on behalf of Legal & General.”
Mike Powell, head of transactions, BTR, at LGIM (L&G Investment Management) Real Assets, said: “We are delighted to see spades in the ground at Central Quay, delivering a unique offer of city centre living on the waterfront.
“Marking £1bn of real assets investment into Cardiff, we are proud to have played our part in the city becoming one of the UK’s leading locations to live, work and play. The provision of a further 715 build-to rent apartments will facilitate this trajectory of growth with much needed new homes and build on the long standing role Legal & General has played in Cardiff’s regeneration.”
The proceeds from the land deal for the BTR scheme with L&G has allowed Rightacres to invest further in public realm and towards the development of future phases of Central Quay.
This includes a new multi-storey car park with a deal understood to be close to being agreed to locate it on Network Rail's surface car park at south side of Cardiff Central Station - which will form part of the wider Central Quay project. As well as providing for a multi-storey car park for 700 vehicles, the existing surface car park is expected to make for way for a new Metro tram link connection from Cardiff Central Station down to Cardiff Bay.
The long term aspiration of the Welsh Government is to see it extended through ABP’s Port of Cardiff and reaching Rover Way. A 200-bedroom Moxy Hotel is also planned at Central Quay, with a planning application submitted. The scheme also has planning consent for a 150,000 sq ft office scheme known as One Central Quay (formerly known as the Ledger building).
However, the challenge for any new office project in the UK is spiralling construction inflation - exacerbated by the net zero operating requirements of prospective tenants - and falling property valuations. Invest appetite to fund projects has also been impacted by the uncertainty over long-term office letting activity with the pandemic accelerating the trend towards hybrid working practices.
However, Rightacres has the flexibility to react to market demand for future phases of Central Quay, which could see more of a focus on residential and leisure than office space.
With the UK and Welsh governments in discussions over creating an investment zone in Wales - which would receive £80m from the Westminster Government to fund incentives such as tax breaks, skills support and infrastructure improvements - could Central Quay be a potential location? The site benefits from integrated transport connections - with Cardiff Central Station and the soon to open new bus station at the nearby Interchange scheme.
Any bids in Wales for enterprise zone status would need a tie up with academia and the potential for leveraging significant private sector investment in areas such as technology, creative industries, life sciences, advanced manufacturing and the green sector.
The UK Government has already identified eight investment zone locations in England.
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