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'More must be done to encourage private development investment' INCENTIVES CRUCIAL TO BOOST THE MARKET.

Byline: RHODRI EVANS Assistant Business Editor

POLICY MAKERS need to provide incentives for the private sector to invest, according to leading commercial property sector figure in Wales Chris Sutton. The lead director at the Cardiff office of international property advisory firm Jones Lang LaSalle, also said it was also disappointing that many local development plans (LDPs) - which set the development and business direction over the long-term in local authority areas - were behind schedule.

Speaking at an event to launch the firm's commercial property 2013 South Wales Report, Mr Sutton said: "If we look back five years ago, the Welsh Government had a crusade on sustainable development.

"We pursued a highly aggressive low carbon agenda in advance of England. It is easy to prescribe cost on development in a rising market, but the chickens come home to roost as soon as the market turns."

Earlier this month, chairman of leading UK housebuilder company Redrow, Steve Morgan, said that additional housebuilding regulations and legislation that will require the installation of sprinklers, would add PS11,000 to the cost of a new three-bedroom home in Wales.

He warned that more and more parts of Wales would become economically unviable for housebuilders to develop much needed new housing stock.

Mr Sutton said: "Carrying on the theme for being different for difference' sake, we are introducing a higher standard of building regulations than in England.

"Are we seriously saying that English building regs are not fit for purpose?" On progress towards signing off LDPs, he added: "We are around 50% there in terms of delivery, but bearing in mind the deadline was 2008, it is not a sign of nimble Government. This is why we need to incentivise and maybe penalise. "Cardiff is getting its act together and its LDP is gathering momentum to the relief of mainstream housebuilders who have been on something of a starvation diet in terms of sites. "However, just to put this into perspective, the current plan was written in 1996."

Mr Sutton said there were positive signs, though.

"We are exploiting pockets of growth and locking in private sector expertise," he added.

"There are fresh ideas coming forward from business, although the key will of course be whether these can put into practice.

He described planning reform in Wales - being taken forward by the Welsh Government - as the most "cost effective route to economic development".

"We are on a journey and have potentially put ourselves on the road to a distinctly more attractive environment than our English neighbours," said Mr Sutton. "The public sector is in an age of austerity... and we have all tightened our belts. However, the corporate world is generally in good health and sitting on significant balance sheets."

"Public policy is like a super tanker, changing direction slowly. We are moving from prescribing cost on development toward incentivising investment.

Long may it continue."

CARDIFF AMONG THE BEST THE economy of Cardiff is one of the best performing of any city in the UK outside of London, according to Jones Lang LaSalle's director of research.

Andrew Burrell said: "Over recent years the economic pain has been unevenly shared across the UK.

"Wales has been one of the best performers outside of London and the South East, on the back of a robust and larger than average manufacturing sector which has done relatively well with demand from emerging markets, although in the UK demand remains relatively weak."

He said Oxford Economics research showed the Welsh economy dipped last year - although marginally less than for the UK as a whole.

"This is a slightly disappointing result after such healthy growth in 2011. This year a recovery is in prospect with GDP growth of 1.4% against a UK average of around 1%."

Mr Burrell said there were still global risks that could derail growth this year - although concerns over the eurozone had subsided.

He described the economy of Cardiff as being a "strong point" of the Welsh economy, with growth of 1.8% in 2012 and a rise of 12.4% forecast in its GDP from 2013-17.

He said the capital had developed a cluster of private sector firms, but it would benefit further by creating more jobs and investment in higher valued added sectors such as ICT and professional and business services. "We have seen a particularly strong performance [economic] in Cardiff than in other cities in the UK," said Mr Burrell.

HIGHLIGHTS FROM THE REPORT What the Jones Lang LaSalle report says about the commercial office market in Wales' key cities: CARDIFF THE Cardiff office market needs new grade A space. The only grade A stock under construction is at JR Smart's Capital Quarter scheme. In 2012 the Cardiff office market "held up well" fuelled a particularly active Q4 - with year end take up equating to 410,000 sq ft.

Headline rent is PS22 per sq ft. The largest letting was the 30,000 sq ft taken by Conduit at Fusion Point. NEWPORT The city had a good year with total take up of office space reaching 150,000 sq ft.

The biggest deal was for a 77,000 sq ft pre-let to Admiral for a city centre headquarters - operational in the first half of 2014.

There still remains space in the city's three main grade A schemes, including 24,500 sq ft at Nexus House. The headline rent is PS16 per sq ft. SWANSEA Swansea experienced a difficult year, after the previous year's key lettings to Admiral and Swansea Metropolitan University.

Swansea's potential to attract investment is being hampered by a lack of any available grade A office space in the city centre.

The city's headline rent is PS14.50 per sq ft. Total take up finished at 110,000 sq ft.


Chris Sutton, lead director in Wales for Jones Lang LaSalle, said he saw positive signs
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Mar 7, 2013
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