As the city continues to grow and attract investment, Bristol is expected to outperform both the South West and the UK in terms of economic growth by 2020. At the launch of its Bristol Property Market Update 2017, property adviser GVA pointed to strong demand across the commercial property sectors and the continued opportunities to deliver growth within the city.
Regional Senior Director Jo Davis told the 200 guests at its Evolving Bristol launch, “Bristol continues to present opportunities to deliver growth, both within the city and as the regional city of the South West. The market remains robust and optimistic, as demonstrated by key developments within the city region, which demonstrate the strong demand from the market for residential, retail and employment floor space. Demand from industrial, logistics and trade occupiers highlights the diversity and resilience of the city’s economy.”
She added that in 2016, inward investors created 1800 jobs in Bristol, over double the number for the year before.
She cited developments including Bristol University’s investment at the heart of Temple Meads Enterprise Zone, which will remove the acute eyesore of the Sorting Office at the entrance to the city, creating circa £100million per year investment and act as the centre piece of the Enterprise Zone.
Other strategically important opportunities for the city include the approval of a new tower of 22 storeys at Redcliff Quarter, to help reinvigorate the previously neglected Redcliffe area of the city; and after years of discussion, a new connection across the Harbourside linking Finzels Reach with Castle Park. Bristol has also seen the development of its biggest speculative warehouse scheme for two decades move forward at the former Rolls-Royce East Works site in Filton.
Gordon Isgrove, Senior Director at GVA added, “Much of this development is enhanced by drawing on the city’s rich heritage and the continued success of our universities, which provide opportunities for research, technology and knowledge based industries to thrive.”
Highlights of GVA’s Bristol Property Market Update:
City Centre Offices
- The city centre offices market experienced strong take-up in 2016 with a total of 782,938 sq ft transacted, up almost 60% on 2015.
- Grade A availability currently stands at approximately 145,000 sq ft, with Cubex Land’s Aurora the only speculative Grade A development on site.
- Buildings such as 1 Brunswick Square and Augustine’s Courtyard have targeted the TMT sector, which has seen more growth in the Bristol and Bath areas than anywhere else outside of London.
- In the industrial market, full year take-up for 2016 was 4.6m sq ft, up from 2.6m in 2015, according to the Industrial Agents Society.
- The declining supply of high quality space in 2016 has led to virtually no prime standing industrial stock available, however, in late 2016 we saw the return of significant industrial development activity in the region.
- The largest commitment is at Horizon 38 where 580,000 sq ft scheme is being delivered.
- The lack of standing stock has led to a surge in major land/occupier deals for the South West’s largest scheme, Central park. The Range has taken 55 acres for a 1.2m sq ft RDC.
- Within the retail market, consumer spending has been one of the main drivers of Britain’s economy since June’s referendum decision to leave the EU.
- Cabot Circus has seen new high street additions in 2016, including Kiki. Victoria’s Secret, Foot Asylum and Monki. Footfall in Cabot Circus was reported at 19million in 2016.
- Bristol Alliance have plans for a 1.1m sq ft redevelopment of the Callowhill court area of Broadmead to include retail, commercial, leisure, hospitality and residential.
- The 330,000 sq ft Galleries shopping centre has undergone a £5m refurbishment with a host of new lettings with football apprx 10 million people in 2016.
- At the Mall, Cribbs Causeway, 2016 footfall was around 12m with anchor stores John Lewis and Marks and Spencer performing well. Headline Zone A rents are in excels of £300psf with recent lettings to Tiger, Sketchers, White Stuff, Tessia, Nespresso, Cath Kidston and Smiggle.
- The South West investment market saw £1.8bn of transactions in 2016, a fall of 17% over the previous year.
- Investment volumes for Bristol offices in 2016 totalled £335m, compared to £594m in 2015.
- Initial concerns over a severe adverse reaction to the Brexit vote have proved unfounded although there has inevitably been a fall in investment transaction volumes as many investors opted for a wait and see approach.
- There is still a considerable weight of money looking to invest in prime Bristol offices. With a robust occupier market and continued rental growth predicted, we expect current levels of demand for Bristol offices to continue to grow in 2017.