A surge in demand for office space in Bristol, combined with reducing supply, resulted in prime rents rising to £28.50 per sq ft in 2014 with levels of take-up not seen since 2007.
According to latest research from Colliers International, rents will continue to rise in 2015. Take-up in Bristol City Centre totalled 837,000 sq ft in 2014 – a significant increase of 97 per cent on the five year average.
On the findings, James Preece, Director at Colliers Internationals Bristol office said: “Having lacked transactions over 20,000 sq ft during the recession, Bristol had 12 deals above this level during the year. Those developers who chose to speculatively develop have been rewarded with c. 80,000 sq ft being committed to before construction is complete. The number of deals also increased by an impressive 43 per cent.”
James said the final quarter of the year made all the difference in take-up numbers with over 400,000 sq ft let. The largest transaction of the year took place in the final quarter with Ovo Energy taking on 70,000 sq ft at 1 Rivergate, Temple Quay.
The Grade A sector saw KPMG taking 52,000 sq ft at Skanska’s yet to be completed 66 Queen Square. Mapfre Abraxas signed for all of Cubex and M&G’s 46,500 sq ft 1 Victoria Street, PWC took a pre-let of 28,000 sq ft at Salmon Harvester’s 2 Glass Wharf, Temple Quay and DNV GL completed on 26,000 sq ft at 1 Linear Park – again on Temple Quay.
The Out-of-Town sector also leapt ahead with take-up totalling 430,000 sq ft – up an outstanding 51 per cent on the five year average.
James added: “The improved level of take-up in 2014 was achieved largely as a result of the return of larger transactions, with six deals in excess of 20,000 sq ft – the largest in Q4 was Alcatel-Lucent, which took 38,500 sq ft at 740 Aztec West.
“Aztec West, in particular, has had an impressive year with around 145,000 sq ft of take-up.
“As we predicted, 2014 was a real turnaround year with levels of take-up not seen since 2007, and an overall total of c.1.27million sq ft. The City Centre saved the best for last; with six deals of 20,000 sq ft plus crossing the line in the final quarter.
“Strong demand is likely to see rents continue to improve this year with incentives contracting further.”
