Above-average levels of new city-centre office lettings and a sharp bounce back in occupier demand for office space in Bristol have continued apace across the second quarter of 2014. The astonishing space race has also seen strong rebounds in both the Grade B and out-of-town lettings markets, according to the latest regional office market report from GVA.
GVA’s Big Nine research underlines the growing strength of occupier demand that underpins this renewed confidence: Bristol city centre had encouraging levels of take-up in the second quarter at 179,628 sq ft, 57% above the five- year average. Total take-up in the same time period across the nine cities surveyed in GVA’s report was 15% above the five-year quarterly average, at 2.85 million sq ft. Out-of-town take-up in Bristol was 50% above the quarterly average, at 111,711 sq ft.
Richard Kidd, Director of Office Agency at GVA in Bristol, observes: “These figures reflect the positive sentiment in the Bristol market. There has been a good level of medium-size (5,000-20,000 sq ft), grade B activity that has put take-up well over the quarterly average, but the lack of headline grade A deals continues.
“However, there are some decent live requirements and before the autumn we could see the largest letting in the Bristol market since 2008 with the energy company Ovo looking set to sign for new headquarters. With grade A supply continuing to be a concern in the city centre market, this also highlights the lack of available, quality, larger buildings in the out-of-town market as well, following the letting of Temple Point, Almondsbury to TSB.”
He also stresses the differences between the occupier recovery taking place now and the story during the capital boom that led up to the 2008 crash: “Sector-specific growth in the UK’s economy has begun to feed into the need for companies to grow their office space. This is very different to the experience of the mid-2000s, when the vast majority of new-build, capital growth and investment decisions were being made based on the continued belief that values would increase – irrespective of occupier demand.”