An increase in occupier enquiries has brought new life to the Bristol office market over the last few months.
With a strong Q3 complete, take-up in Bristol has already overtaken the annual average for the previous five years, and there are a number of significant deals likely to act as a catalyst for further occupier activity in the final quarter of the year, meaning the Bristol market ends the year on a high.
Bristol is featured as the focus city in GVA’s latest Big Nine survey, which shows that Glasgow and Manchester have also overtaken their five-yearly average take-up. With continued high levels of take-up during the most recent quarter in the UK’s nine major city centre office markets, the report indicates take-up across all cities so far this year is higher than it has been over the same period for the previous five years, putting the market in a strong position to eclipse the strong level of annual take-up in 2013.
The recent bout of activity in Bristol has been led by the largest letting since 2008, which has exchanged contracts at 1 Rivergate, a 69,716 sq ft deal to OVO Energy, which will formally complete next quarter. Other recent significant lettings include two deals at Kings Orchard: 17,000 sq ft to Parsons Brinkerhoff and 15,000 sq ft to Tribal Group. Mapfre are also reported to be close to signing for M&G’s 1 Victoria street refurbishment, to satisfy their 48,000 sq ft requirement.
Two speculative developments that started last year have received occupier interest: PWC are under offer on almost a third (30,000 sq ft) of 2 Glass Wharf at Temple Quay Central, at a record rent of £28 psf. Also, Skanska’s 66 Queen Square development, which is due for completion next year, is likely to be taken by a long-running 45,000 sq ft requirement from KPMG.
Remaining schemes with significant amounts of grade A space in the city include 78,000 sq ft at Temple Back although the top floor is rumoured to be under offer and 78,000 sq ft at Bridgwater House, Finzels Reach.
Richard Kidd, Director Office Agency in Bristol says, “The level of occupier activity is underpinning decisions by a number of funds to move into the regional city development markets such as Bristol, and this is clearly now paying dividends with much of the new Grade A space being let at or before completion.
“Bristol is one of the few cities where we have seen pure speculative development although this still remains difficult to achieve, except where the occupational demand story is absolutely solid.”