While the UK residential market is going from strength to strength it appears there is also demand for regeneration projects across the UK. Legal and General, together with Rightacres, has announced a joint venture to speed up completion of the 1,000,000 ft.² Central Square project in Cardiff. The £400 million investment could create up to 10,000 jobs across the city and regenerate an area around the train station which has been underused to say the least.
When you bear in mind this is the largest deal of its kind ever seen across Wales it is yet another reflection of the extraordinarily strong backbone of the UK real estate market.
What does Legal and General bring to the party?
If you look back at the recent history of Legal and General you will see an array of similar transactions completed across the UK. While not always involved at the start of such projects it seems that Legal and General has developed an appetite for this particular area of the market. The company has access to enormous funding, investment experience from years in the industry and connections which very few companies can match. Against this background, and a willingness to speed up the development of regeneration programmes, it seems that Cardiff could be transformed in the longer term.
This would seem to continue a recent trend introduced by the company which has now signed similar deals and committed to £1.5 billion of investment outside of the London market.
What elements are included in the regeneration development?
The development is situated around Cardiff Central railway station and will create up to 1,000,000 ft.² of new office space as well as an array of new homes and shops. Interestingly BBC Wales is at the centre of the development with its new head office not to mention a new transport hub which will include connecting bus stations, a 150 bedroom hotel and up to 200 private residential apartments. We can only speculate as to how this will impact the local region because increased visitor numbers will likely encourage other similar regeneration and redevelopment programmes.
Planning for the future
Over the last few years the Welsh economy has struggled although there have been a number of bright spots dotted across the country. It may seem a little strange to be investing significant amounts of money in a Cardiff regeneration programme, with the UK economy seemingly running out of steam, but this is an investment for the long-term. We do not have a timescale for the project at the moment, as these dates can be fairly fluid, but it will take some time to complete and the economic environment we are in today is likely to change significantly by the end of the development.
Companies such as Legal and General seem to have the ability and experience to spot long-term opportunities. While these very often deliver significant financial rewards for the investment partners involved they can also radically change the local area, economy and employment prospects.