Jessica steps in

Headnote

A series of investment initiatives by the Welsh Assembly government has sought to energise development in South Wales, but developers have balked at the methods used so far. David Thame reports on the Latest episode

Jessica, the WISP and the WIP. No1 that isn't the title of the kind of DVD your mother wouldn't like, but the names of three attempts to put some extra fizz into the South Wales property scene. As Jessica - the new girl on the block - settles into her new Cardiff home (see panel), questions are being asked about the success of this series of initiatives by the Welsh Assembly government.

The problem, according to some of the region's property people, is that neither the Welsh Investment Strategic Partnership (WISP) nor, before it, the Welsh Industrial Partnership (WIP) has judged the market correctly.

The investment sale of two WISP properties earlier this summer has provided the context. In August, Legal & General Property bought the 47,000 sq ft Nexus House in Newport and the 4-7,700 sq ft Ellipse building in Swansea from WISP for £23.4m - a 5.1 5% yield.

Both buildings were let to the Welsh Assembly on 25-year leases, making them among the most conspicuously gold-plated investment opportunities the principality has yet seen.

The WISP programme has never been popular because it appeared to place the Welsh Assembly government in direct competition with private sector developers. That the partners in the WISP project seemed to be sitting on a no-risk deal added to developers' ire.

To some observers, it seemed that the super-safe prospects offered by WISP were a reaction to the troubled outcomes created by WIP.

Despite some successes with WIP - the Llanelli Gate development in Carmarthenshire is often cited - the...