Plans for a major public sector-led office hub scheme in Cardiff Bay can be revealed. While still at an early stage, Cardiff Council has identified a site as part of a wider Atlantic Wharf mixed-use development scheme for potentially up to 500,000 sq ft of new office space.

The hub would be located on council-owned land between the site of the proposed 15,000-seater indoor arena - for which financial closure is expected this spring - and the existing Red Dragon Centre, which will be demolished to make way for new development.

A key element of the hub would be a 100,000 sq ft new Cardiff Council headquarters, replacing the existing 270,000 sq ft. County Hall building at Atlantic Wharf. The existing HQ will be demolished, with the land repurposed for a residential-led commercial development. Its current car park area will partly accommodate the new indoor arena, to be operated by global venue and entertainment company Live Nation.

For the hub, it is understood that council officials are in discussions with the Office of Government Property of the UK Government, over the potential relocation of civil service functions and staff from London.

The council aims to secure relocations across government departments, following the example of the Treasury with a new hub building Darlington in the north of England that will open in 2027.

The council would look to private developers to deliver further phases for public sector organisations, although there could also be space for private sector firms.

The hub project is being positioned as a catalyst for creating career pathways, with ease of transfer of expertise between the council and government departments, including in areas of potential growth such as AI and cybersecurity.

Companies House may also consider establishing a new, smaller HQ office in Wales, at Atlantic Wharf. This would allow it to vacate its current location in Gabalfa, which Cardiff Council is looking to acquire.

The new council headquarters would be financed through borrowing powers under the UK Government’s Public Works Loan Board (PWLB).Savings from reduced running costs, particularly with a more energy-efficient building compared to County Hall, would contribute towards the financing costs. Any new building is estimated to cost around £35m.

It is also understood that the council is seeking for the site to be included as part of a new investment zone. The zone, with a £160m package of business support measures over ten years, is one of two in Wales (the other focused on advanced manufacturing in north-east Wales).

The initiative, confirmed by the former Conservative UK Government and backed by the new Labour Westminster administration, will be overseen by the Cardiff Capital Region, which covers the ten local authorities of south-east Wales. The zone, which will aim to secure match funding from private sector and other sources, will be divided into smaller, ring-fenced areas. In addition to Atlantic Wharf, it could include parts of central Newport.

The zone will be focused on tech and compound semiconductors, but the hub, with AI and cyber-security roles, could be seen as being applicable.

With £100m in funding agreed - split between the UK and Welsh governments -for a new tram network from Cardiff Central Station to Cardiff Bay Station, the council is seeking further funding for the next phase of its wider Cardiff Crossrail project. This would see the network extended through Atlantic Wharf to Pierhead Street.

The 30-acre masterplan for Atlantic Wharf, which includes the Red Dragon and County Hall sites, has been divided into two development areas, with regeneration opportunities put to market in 2023.

The Red Dragon site, offering 11.3 acres of land south of Hemmingway Road, received two detailed bids following an eight-week marketing process. Aviva Capital Consortium (ACC) was selected as the preferred developer. ACC’s proposal is for a mixed-use development including new homes, offices, hotels, food and beverage outlets, and leisure facilities.

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The £250m indoor arena project, which will be central to the transformation of Atlantic Wharf, has faced inflationary pressures in recent years, adding around £100m to its original projected cost. This includes the relocation of the existing Travelodge Hotel.

However, Live Nation, which will operate the arena under a 45-year lease with the council, has agreed to make a £100m financial contribution to the project. The council’s funding commitment of around £150m remains unchanged and will be financed through prudential borrowing via the PWLB. The council’s debt financing is expected to be offset by Live Nation’s undisclosed rental agreement for the arena.

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