One of Cardiff’s biggest office developments has been sold to the international financial management company Fidelity Worldwide Investment for just over £11m.
The 60,000sq ft Fusion Point 2 building on Dumballs Road was built as a joint venture between Robert Hitchins and Landmark Cardiff. Fidelity was one of four bidders and the final sale price of £11.2m was in line with the asking price.
The seven-year-old office complex reportedly generates an annual rental income of more than £1m, with an average rent of just under £17 a square foot. It has been sold fully let with four blue chip tenants.
The deal was brokered by Knight Frank. “This successful sale reflects the growing interest by institutional investors for good quality multi-let office investments in the major regional markets,” said the agent’s Cardiff partner and head of investment. “In particular it shows the growing confidence that investors have in the capital city, where they are buying into the vision of Cardiff’s potential for further growth.”
Fusion 2 stands alongside the larger Fusion Point building, which Robert Hitchins previously sold to Prudential. Its sole tenant is directory enquiries operator, 118 118.
Commenting on the number of significant commercial investment deals in Cardiff recently, Dan Evans a director of niche commercial investment and development firm Powell Lloyd said: “Fidelity has shown confidence in the region by investing early in the market upturn and I am sure this asset will perform.
“This transaction demonstrates to the wider UK market that Cardiff and Wales can offer Grade A investments at an attractive yield discount to London and the south-east of England. The Fusion 2 building has an excellent specification and is situated in very much an improving part of the city, which will benefit from both existing and proposed developments nearby.”
Last month the Grade II-listed Hodge House, in Cardiff city centre, was acquired by Legal & General Property for just under £19m. The 70,000sq ft office block — whose tenants include the law firm Hugh James and outsourced call centre operator Serco and generate £1.7m annually in rents — was sold by Aberdeen Asset Management.
And last week it was confirmed that developer JR Smart has received planning permission to speculatively build a further 84,000sq ft of new office space at its flagship Capital Quarter project. The latest addition to the 7.3-acre scheme is for a seven-storey office block which will be a key feature of JR Smart’s £150m Capital Quarter currently the largest mixed use development under way in the Welsh capital.